The Goldman Sachs Group, Inc. (GS): Business Model Canvas [11-2024 Updated]

In the competitive world of finance, understanding a company's business model is crucial for investors and analysts alike. The Goldman Sachs Group, Inc. (GS) stands out with its robust Business Model Canvas, which encompasses a range of strategic elements that drive its success. From key partnerships and activities to diverse revenue streams, Goldman Sachs leverages its expertise to cater to a wide array of clientele, including institutional investors and corporations. Dive deeper to explore how this financial giant navigates the complexities of the market and delivers value across its operations.

The Goldman Sachs Group, Inc. (GS) - Business Model: Key Partnerships

Collaborations with institutional clients

In the third quarter of 2024, Goldman Sachs reported net inflows of $42 billion from institutional clients, compared to a net outflow of $6 billion in the same period of 2023. The firm's total Assets Under Supervision (AUS) reached $3.015 trillion, with significant contributions from institutional clients.

Relationships with investment banks

Goldman Sachs has maintained robust relationships with other investment banks, contributing to its investment banking fees of $1.87 billion for the third quarter of 2024, which is a 20% increase from the same quarter in 2023. The firm's advisory fees for completed mergers and acquisitions amounted to $178 billion for the same period.

Strategic alliances for technology and data sharing

Goldman Sachs has invested significantly in technology partnerships, including financial technology firms to enhance its trading and risk management capabilities. As of September 2024, the firm reported total investment in technology and data solutions exceeding $1 billion. Additionally, collaborations with fintech startups have allowed Goldman Sachs to streamline its operations and improve customer service.

Partnerships with asset management firms

Goldman Sachs has established partnerships with various asset management firms, raising $52 billion in third-party commitments in its alternatives business during the first nine months of 2024. The firm targets achieving gross inflows of $225 billion for alternative investments from 2020 through 2024, a goal it surpassed in 2023.

Partnership Type	Net Inflows (2024)	Investment Banking Fees (2024)	Technology Investment	Third-Party Commitments (2024)
Institutional Clients	$42 billion	-	-	-
Investment Banks	-	$1.87 billion	-	-
Technology & Data Sharing	-	-	$1 billion+	-
Asset Management Firms	-	-	-	$52 billion

The Goldman Sachs Group, Inc. (GS) - Business Model: Key Activities

Investment banking services

Goldman Sachs generated investment banking revenues of $1.86 billion for the third quarter of 2024, a 20% increase from $1.55 billion in the same quarter of 2023. This growth was primarily driven by higher revenues in debt underwriting, particularly in leveraged finance and investment-grade activity, as well as increased revenues from equity underwriting, which were boosted by secondary offerings.

For the first nine months of 2024, total investment banking revenues reached $5.68 billion, up from $4.57 billion for the same period in 2023.

Asset and wealth management

In the third quarter of 2024, Goldman Sachs reported asset and wealth management revenues of $2.65 billion, reflecting a 10% increase from $2.41 billion in the third quarter of 2023. This increase was attributed to higher management and other fees, driven by higher average assets under supervision (AUS).

For the first nine months of 2024, asset and wealth management revenues totaled $7.67 billion, compared to $7.05 billion in the same period of 2023.

Revenue Source	Q3 2024 ($ millions)	Q3 2023 ($ millions)	9M 2024 ($ millions)	9M 2023 ($ millions)
Management and other fees	2,619	2,405	7,607	7,041
Incentive fees	85	24	219	102
Private banking and lending	756	687	2,145	1,915

Market making and trading activities

Goldman Sachs' market-making revenues were reported at $4.01 billion for the third quarter of 2024, a decrease of 19% from $4.96 billion in the third quarter of 2023. This decline was attributed to significantly lower revenues in intermediation and financing activities.

For the first nine months of 2024, market-making revenues stood at $14.22 billion, slightly lower than the $14.74 billion reported for the same period in 2023.

Risk management and advisory services

Goldman Sachs' advisory services generated revenues of $875 million in the third quarter of 2024, compared to $831 million in the same quarter of 2023. For the first nine months of 2024, advisory revenues totaled $2.57 billion, up from $2.29 billion in the same period of the previous year.

The firm’s total net revenues for the third quarter of 2024 were $12.70 billion, a 7% increase from $11.82 billion in the third quarter of 2023. The efficiency ratio, defined as total operating expenses divided by total net revenues, improved to 65.5% for the third quarter of 2024, down from 76.6% in the same quarter of 2023.

The Goldman Sachs Group, Inc. (GS) - Business Model: Key Resources

Highly skilled workforce and talent pool

The Goldman Sachs Group, Inc. employs approximately 46,400 individuals as of September 2024, reflecting a slight increase from 45,900 in September 2023. The company places a strong emphasis on attracting and retaining top talent, which is critical for its operations in investment banking, asset management, and global markets.

Proprietary trading technology and platforms

Goldman Sachs has invested significantly in technology to enhance its trading capabilities. As of September 2024, the company's net revenues from market making were approximately $14.22 billion for the first nine months of 2024, compared to $14.74 billion for the same period in 2023. This reflects the firm's commitment to utilizing advanced trading platforms and analytics to optimize trading strategies and risk management.

Extensive client network and relationships

The firm maintains a diverse client base, generating approximately 50% of total non-interest revenues from contracts with clients for the three months ended September 2024. Investment banking revenues were reported at $5.68 billion for the first nine months of 2024, a 24% increase from the previous year, highlighting the strength of its client relationships.

Strong brand reputation and market presence

Goldman Sachs is recognized as one of the leading investment banks globally, with a strong brand reputation. The company reported net earnings of $10.17 billion for the first nine months of 2024, significantly up from $6.51 billion in the same period in 2023. The firm’s solid market presence is evidenced by its ability to command significant market share across various sectors, including equities and fixed income.

Resource Type	Details	Financial Metrics
Workforce	Number of Employees	46,400 (Sept 2024)
Technology	Market Making Revenues	$14.22 billion (9M 2024)
Client Network	Non-Interest Revenues from Client Contracts	~50% of total non-interest revenues (Q3 2024)
Brand Reputation	Net Earnings	$10.17 billion (9M 2024)

The Goldman Sachs Group, Inc. (GS) - Business Model: Value Propositions

Comprehensive financial services for diverse clientele

The Goldman Sachs Group, Inc. provides a wide range of financial services, catering to various client segments including corporations, financial institutions, governments, and individuals. As of September 2024, the firm reported net revenues of $39.64 billion for the first nine months of 2024, an increase of 13% compared to the same period in 2023.

Expertise in investment banking and asset management

Goldman Sachs is recognized for its strong performance in investment banking, which generated $5.68 billion in fees for the first nine months of 2024, marking a 24% increase from the previous year. This growth was largely driven by leveraged finance activities and increased revenues from equity underwriting. In asset management, the firm reported management and other fees of $7.61 billion, a 9% increase year-over-year, reflecting higher average assets under supervision (AUS).

Innovative solutions tailored to client needs

Goldman Sachs focuses on providing innovative financial solutions tailored to the specific needs of its clients. The firm's total assets under supervision (AUS) reached $3.015 trillion as of September 2024, with significant inflows across various asset classes, particularly in liquidity products and fixed income. The firm also aims to achieve annual firmwide management and other fees of over $10 billion in 2024.

Strong performance track record in capital markets

Goldman Sachs has demonstrated a robust performance in capital markets, with net revenues in Global Banking & Markets totaling $26.46 billion for the first nine months of 2024, a 12% increase compared to the same period in 2023. The firm reported significant revenues from its FICC (Fixed Income, Currency, and Commodities) operations amounting to $10.47 billion, reflecting higher client activity and improved market-making conditions.

Metric	Q3 2024	Q3 2023	Change (%)
Net Revenues	$12.70 billion	$11.82 billion	7%
Investment Banking Fees	$1.86 billion	$1.55 billion	20%
AUS	$3.015 trillion	$2.717 trillion	11%
Management and Other Fees	$2.619 billion	$2.405 billion	9%

The Goldman Sachs Group, Inc. (GS) - Business Model: Customer Relationships

Dedicated client service teams

The Goldman Sachs Group, Inc. (GS) employs dedicated client service teams that focus on providing tailored solutions to meet the specific needs of their clients. This approach is evidenced by the firm’s significant investment in human capital, with a headcount of approximately 46,400 as of September 2024, an increase from 45,900 in the previous year.

These teams are structured to enhance communication and operational efficiency, ensuring that clients receive a high level of service that is both responsive and personalized.

Personalized financial advisory services

Goldman Sachs offers personalized financial advisory services that cater to a diverse clientele, including high-net-worth individuals and institutional investors. In the third quarter of 2024, the firm generated $2.65 billion in investment management revenues, a 10% increase compared to the same period in 2023.

These services include customized investment strategies and wealth management solutions designed to help clients preserve and grow their financial assets. The firm manages client assets across various strategies and asset classes, which has contributed to a significant increase in management and other fees, amounting to $2.619 billion for the third quarter of 2024.

Regular communication and updates on market trends

Goldman Sachs maintains regular communication with clients by providing updates on market trends and economic indicators. This is evident from their earnings report, which reflects a proactive approach in sharing insights that influence client decisions. For instance, net revenues in Global Banking & Markets reached $8.55 billion for the third quarter of 2024, a 7% increase year-over-year, indicating the firm's ability to adapt to changing market conditions.

Furthermore, the firm’s commitment to transparency is highlighted by the fact that approximately 50% of total non-interest revenues for the third quarter of 2024 came from contracts with clients. This illustrates the importance of keeping clients informed and engaged in the investment process.

Loyalty programs for institutional clients

Goldman Sachs has developed loyalty programs aimed at institutional clients, which are designed to foster long-term relationships and encourage repeat business. These programs are reflected in the firm’s increasing investment banking fees, which totaled $1.86 billion in the third quarter of 2024, a 20% increase from the prior year.

Additionally, the firm's Asset & Wealth Management segment has set a target to achieve annual management and other fees exceeding $10 billion in 2024, which includes significant contributions from alternative investments.

Metric	Q3 2024	Q3 2023	Change (%)
Investment Management Revenues	$2.65 billion	$2.41 billion	+10%
Investment Banking Fees	$1.86 billion	$1.55 billion	+20%
Management and Other Fees	$2.619 billion	$2.405 billion	+8.9%
Headcount	46,400	45,900	+1.1%

The Goldman Sachs Group, Inc. (GS) - Business Model: Channels

Direct sales through account managers

The Goldman Sachs Group, Inc. employs a network of account managers to facilitate direct sales. As of September 2024, the firm reported a total headcount of 46,400 employees, with a significant portion dedicated to client-facing roles in various divisions, including Global Banking & Markets and Asset & Wealth Management.

Digital platforms for trading and investment management

Goldman Sachs leverages advanced digital platforms, such as Marcus by Goldman Sachs and their trading applications, to enhance client engagement. In the third quarter of 2024, the firm generated net revenues of $12.70 billion, a 7% increase year-over-year, partly driven by gains in digital trading services. The average monthly firmwide assets under supervision (AUS) reached $3,015 billion, with significant inflows attributed to digital investment management.

Metrics	Q3 2024	Q3 2023
Total Net Revenues	$12.70 billion	$11.84 billion
Average Monthly AUS	$3,015 billion	$2,717 billion
Year-over-Year Revenue Growth	7%	5%

Third-party distributors for asset management products

Goldman Sachs utilizes third-party distributors to expand the reach of its asset management products. In the first nine months of 2024, the company reported net inflows of $37 billion from third-party distributed products, compared to $67 billion during the same period in 2023. The management and other fees from Asset & Wealth Management totaled $7.607 billion for the first nine months of 2024.

Client Channel	Q3 2024 Inflows	Q3 2023 Inflows
Institutional	$13 billion	($1 billion)
Wealth Management	$17 billion	$11 billion
Third-Party Distributed	$36 billion	$8 billion

Institutional partnerships for capital raising

Goldman Sachs maintains strategic partnerships with institutional clients for capital raising activities. In Q3 2024, the firm reported investment banking fees of $1.87 billion, a 20% increase compared to the previous year, reflecting heightened activity in debt underwriting and advisory services. The backlog of investment banking fees also showed positive momentum, indicating robust future engagement with institutional partners.

Investment Banking Metrics	Q3 2024	Q3 2023
Investment Banking Fees	$1.87 billion	$1.56 billion
Completed M&A Transactions	$178 billion	$317 billion
Equity Underwriting	$385 million	$308 million

The Goldman Sachs Group, Inc. (GS) - Business Model: Customer Segments

Institutional investors (pension funds, endowments)

Goldman Sachs serves a wide array of institutional investors including pension funds and endowments. As of September 2024, the firm's Asset & Wealth Management division reported managing approximately $2.5 trillion in assets under supervision, a significant portion of which is attributed to institutional clients.

Corporations seeking capital and advisory services

Goldman Sachs is a key player in providing capital and advisory services to corporations. In the first nine months of 2024, the firm generated $5.68 billion in investment banking fees, which reflects a 24% increase compared to the same period in 2023. This growth is driven by higher revenues in debt underwriting and advisory services.

High-net-worth individuals and families

The firm offers tailored wealth management services to high-net-worth individuals and families. For the first nine months of 2024, Goldman Sachs reported $2.14 billion in private banking and lending revenues, highlighting the strength of its services to affluent clients. The average assets managed per high-net-worth client have been increasing, indicating a growing focus on personalized financial planning and investment strategies.

Government entities and non-profits

Goldman Sachs also caters to government entities and non-profit organizations. The firm provides advisory services on public financing and investment management. As of September 2024, Goldman Sachs reported total loans to government and non-profit clients amounting to approximately $45 billion.

Customer Segment	Assets/Revenue ($ Billion)	Growth Rate (%)	Services Offered
Institutional Investors	2,500	N/A	Asset Management
Corporations	5.68 (Investment Banking Fees)	24%	Capital Raising, Advisory
High-net-worth Individuals	2.14 (Private Banking Revenues)	N/A	Wealth Management, Financial Planning
Government Entities	45 (Loans)	N/A	Advisory Services, Financing

The Goldman Sachs Group, Inc. (GS) - Business Model: Cost Structure

Compensation and benefits for employees

For the third quarter of 2024, Goldman Sachs reported compensation and benefits expenses totaling $4.12 billion, slightly down from $4.19 billion in the third quarter of 2023. For the first nine months of 2024, total compensation and benefits reached $12.95 billion, compared to $11.90 billion for the same period in 2023.

Technology and infrastructure investments

Goldman Sachs has been actively investing in technology and infrastructure to enhance operational efficiency. In the third quarter of 2024, expenses related to communications and technology amounted to $498 million, an increase from $468 million in the same quarter of the previous year. For the nine months ending September 2024, these expenses totaled $1.47 billion, up from $1.42 billion in the prior year.

Regulatory compliance and legal expenses

Regulatory compliance and legal expenses are crucial for financial institutions like Goldman Sachs. Operating expenses for the third quarter of 2024 included $400 million for professional fees, which encompass legal and compliance costs, compared to $377 million in the third quarter of 2023. Over the first nine months of 2024, professional fees totaled $1.18 billion, slightly higher than the $1.15 billion reported for the same period in 2023.

Marketing and client acquisition costs

Marketing and client acquisition costs are essential for maintaining and growing Goldman Sachs' client base. In the third quarter of 2024, the company spent $159 million on market development, which is an increase from $136 million in the same quarter of 2023. For the nine months ended September 2024, marketing expenses totaled $465 million, compared to $454 million during the same period in the previous year.

Cost Category	Q3 2024 ($ billion)	Q3 2023 ($ billion)	9M 2024 ($ billion)	9M 2023 ($ billion)
Compensation and Benefits	4.12	4.19	12.95	11.90
Technology and Infrastructure	0.50	0.47	1.47	1.42
Regulatory Compliance and Legal	0.40	0.38	1.18	1.15
Marketing and Client Acquisition	0.16	0.14	0.47	0.45

The Goldman Sachs Group, Inc. (GS) - Business Model: Revenue Streams

Advisory and underwriting fees from investment banking

For the first nine months of 2024, investment banking revenues reached $5.68 billion, which is a 24% increase compared to the same period in 2023. This growth was driven by significantly higher revenues in debt underwriting, primarily from leveraged finance activity, and increased advisory fees due to a rise in completed mergers and acquisitions transactions.

Management fees from asset and wealth management

Net revenues from Asset & Wealth Management totaled $11.42 billion for the first nine months of 2024, reflecting a 20% increase year-over-year. This growth was attributed to net gains in equity investments and higher management fees, which were influenced by an increase in average assets under supervision (AUS).

Revenue Source	Q3 2024 ($ in millions)	Q3 2023 ($ in millions)
Management and other fees	2,619	2,405
Incentive fees	85	24
Private banking and lending	756	687
Equity investments	116	(212)
Debt investments	178	326
Total	3,754	3,230

Trading revenues from market making activities

In the third quarter of 2024, market making revenues totaled $4.01 billion, which was a 19% decrease from the previous year. The decline was primarily due to lower revenues from intermediation activities, especially in interest rate products and commodities. For the first nine months of 2024, total market making revenues were reported at $14.22 billion, reflecting a 4% decrease from the same period in 2023.

Market Making Revenue by Product Type	Q3 2024 ($ in millions)	Q3 2023 ($ in millions)
Interest rates	4,527	(861)
Equities	1,639	2,029
Commodities	103	429
Currencies	(2,380)	2,850
Total	4,005	4,958

Interest income from loans and credit products

The net interest income for the third quarter of 2024 was reported at $2.62 billion, which marked a 70% increase from $1.54 billion in the third quarter of 2023. This increase in interest income was primarily driven by higher average balances and interest rates across trading assets and collateralized agreements. For the first nine months of 2024, net interest income totaled $6.47 billion, a 29% increase compared to the same period in 2023.

Interest Income Sources	First Nine Months 2024 ($ in millions)	First Nine Months 2023 ($ in millions)
Trading assets	3,000	2,200
Collateralized agreements	2,500	1,800
Loans	1,500	1,000
Total Net Interest Income	6,470	5,000

Updated on 16 Nov 2024

Resources:

1. The Goldman Sachs Group, Inc. (GS) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of The Goldman Sachs Group, Inc. (GS)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View The Goldman Sachs Group, Inc. (GS)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.