The boys over at Deal Journal (and not sure what that is, check out Bess's interview with editor Dana Cimilluca) have been pouring through the Goldman Sachs quarterly report. Or, you know, kind of flipping through it for stuff relevant to their beat, mergers and acquisitions. And they've come up with something very, very surprising--Goldman Sachs makes a lot of money.
Revenue from Financial Advisory — mainly advising on mergers such as the leveraged buyout of Aramark Corp. — surged 17% to $861 million in the period ended Feb. 23. What’s remarkable is that the bulging fees come despite ranking just fourth when it comes to the value of completed deals advised on, according to Thomson Financial. By contrast, Citigroup, which is in the No. 1 spot, is highly unlikely to come anywhere near that amount. In the fourth quarter, for instance, Citigroup, which hasn’t reported any 2007 results yet, had advisory revenue of $383 million, less than half of what Goldman just reported.
Of course, we are curious about what accounts for the Goldman premium, but that’s a question for another post.
A question for another post? How about this post right here. We called our source at a Goldman client who gave his opinion: "We overpay. That simple. Goldman's got a name that our c-suite loves. And they pay for that love."
But we want to know what you think. Why does Goldman hit such amazing revenue numbers from advisory fees despite being lower down in the league tables? Leave a comment or send an email to email@example.com. Remember: You report. We decide.
The Goldman M&A Machine: Making a Buck Like No One Else [DealJournal]