Goldman Sachs Expands its Footprint in Emerging Markets

ThemeS: Globalization | Culture

The firm opens offices in several emerging markets in the 1990s, mirroring the expansion and integration of global financial markets.

From the time when Marcus Goldman first walked Lower Manhattan’s maze of streets brokering commercial paper, Goldman Sachs has expanded its footprint to more than 70 cities in 30+ countries around the world. The firm’s global expansion has mirrored the integration of global financial markets, allowing it to serve clients wherever they are located.

Goldman Sachs started courting emerging markets in the 1980s and early 1990s, coinciding with the widespread adoption of economic reforms such as trade liberalization, deregulation and the privatization of state-owned enterprises, including banks and telecommunication companies. In Mexico, a program of economic modernization began to attract foreign direct and portfolio investment. In 1990, Goldman Sachs served as advisor and global coordinator in the privatization of the country’s telco, Teléfonos de Mexico (Telmex)

Mexico advanced its economic integration with the United States and Canada after the North American Free Trade Agreement (NAFTA) went into effect in 1994, the same year that Goldman Sachs opened an office in Mexico City. In the years that followed, the firm advised Latin American governments on privatizations and assisted corporations in raising equity and debt capital in public and private markets internationally.

India enacted liberalizing economic reforms and opened up its financial services sector to foreign investors in 1991. Building on relationships established in the early 1980s, the firm helped the State Bank of India obtain a credit rating and issue US$200 million in the US commercial paper market in 1988 – the first bank from a developing country to do so. This issuance was increased to US$500 million the following year. In 1994, Goldman Sachs assisted in the first Indian privatization in international markets when it served as lead manager for the US$85 million global depositary receipt (GDR) offering of Indian Petrochemicals Corp. Ltd. Recognizing the long-term economic potential of India, Goldman Sachs established a joint venture with Kotak Mahindra in 1995, one that would last until 2006. India’s tremendous growth led the firm to become a wholly-owned onshore investment banking, securities and asset management firm. The Bengaluru office, opened in 2004, would become the third-largest Goldman Sachs office. The opening of the Mumbai office would follow in 2006.

With the end of apartheid in 1994, Goldman Sachs saw increased economic potential and business opportunities in South Africa and the coming of a vibrant multi-racial democracy. That same year, the firm advised the newly elected government led by Nelson Mandela on obtaining an investment-grade credit rating; subsequently, Goldman Sachs joint-lead managed the country’s first global bond offering, which raised US$750 million. The firm established an office in Johannesburg in 1998, its first office in Africa.

In 1995, Goldman Sachs opened a representative office in São Paulo, Brazil’s business capital, at a time when Latin America and emerging markets were hotly competitive. Goldman Sachs advised the Brazilian government on a foreign debt swap in 1999, part of the stabilizing measures to improve the country’s economic outlook after financial tremors in 1998. In 2001, Brazil was included in a Goldman Sachs Global Economic Research report that coined the term BRICs (Brazil, Russia, India and China) referring to national markets with the potential to drive future global economic growth.

More than 150 years after its founding, Goldman Sachs would maintain a presence in global financial centers around the world including London, Tokyo, Hong Kong, Frankfurt, Beijing, Sydney,  São Paulo, Dubai, Mexico City, Bengaluru and Johannesburg.


This article was originally published as part of a series commemorating the 150th anniversary of Goldman Sachs' founding in 1869.