Goldman Sachs 2004 Annual Report Download - page 32

CAPITAL฀
Opportunities฀in฀the฀฀
capital฀markets.
Investment Banking
HE L PI N G฀ C L I EN T S฀ U SE ฀ C A PI TA L ฀ T O฀ G RO W ฀T H E I R฀ I DE A S
Investment Banking acts as a provider of strategic corporate
services, matching the resources of the firm to specific client
needs. This frequently means combining advisory, finance
and co-investment capabilities.
We help clients tap the equity and debt capital markets,
restructure balance sheets, manage assets and liabilities,
and assess strategic options for mergers and acquisitions,
divestitures, corporate defense activities and spin-offs.
Trading and Principal Investments
FI N DI N G฀ WAYS ฀ T O ฀ C ON N EC T ฀ I D E A S฀ A ND ฀ C A P I TA L
Our outstanding client franchise has helped us establish a
leading position in the global capital markets. Our ability to
assume and manage risk is a core competency. Our clients
often request that we commit the firm’s capital. This can take
the form of guaranteeing the execution price of a trade for a
client or hedging a client’s risk exposure.
We trade in a variety of securities across a number of
different markets. These markets include debt, equity,
currencies, commodities and derivatives on such products.
We buy and sell securities on behalf of corporations, financial
institutions, governments and individuals, as well as on the
firm’s behalf. In equity markets, we also act as a market maker
in selected securities, provide market access capabilities, and
clear and settle customer transactions.
in฀ recent฀years, a series of broad structural trends have marked the evolution of
the global capital markets. Advances in technology and the dissemination of informa-
tion have helped spur the opening of markets around the world. This, in turn, has
increased transparency and competition, benefiting individuals and institutions alike.
An array of financial products and niche markets has developed, offering new and
different ways to raise capital and manage risk. As the number of transactions across
countries, regions and continents multiplies, the needs and objectives of those seek-
ing or providing capital become increasingly sophisticated and diverse.
Our clients increasingly favor linking capital and advice. Consequently, banks
are driven to and rewarded for their willingness to commit capital on behalf of their
clients. It has been said that capital has become a commodity. That may be true.
But we believe ideas are not.
Principal Investments primarily represents those invest-
ments made by the firm in our merchant banking funds that
invest in companies and real estate, as well as our investment
in the convertible preferred stock of Sumitomo Mitsui
Financial Group, Inc.
Asset Management and Securities Services
HE L PI N G฀ I N V ES T OR S ฀G R O W ฀T H EI R ฀C A P I TA L฀ ฀
AN D ฀A C CE S S ฀ MA R KE T S
Investors are viewing markets and asset classes in far more
fluid and global terms than in years past. Where previously
they focused on individual industries, regions or asset classes,
they now seek broader options to diversify risk and produce
competitive returns. At the same time, their service needs are
increasing and becoming more complicated. Our focus on
client service, combined with strong capabilities and ideas
that make clients’ capital grow, will continue to differentiate
Goldman Sachs.
We help public and private pension funds, corporations,
non-profit organizations and individuals plan and manage
their investing assets. Through tailored investment strategies,
we work with our clients to identify and access new
opportunities, while preserving the value of their existing
investments.
We also provide these same entities as well as mutual
funds and hedge funds with prime brokerage, securities
lending and financing services.
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