In This Review

The Partnership: The Making of Goldman Sachs
The Partnership: The Making of Goldman Sachs
By Charles D. Ellis
Penguin Press, 2008, 752 pp

Goldman Sachs rose from a specialized trader in commercial paper a century ago to arguably the leading investment bank in the world by 2007 -- before converting itself into a bank holding company in 2008, after this book went to press. Ellis provides a fascinating and detailed account of the rise of Goldman Sachs over the decades, with strong emphasis on its leading partners, its internal culture of competence and loyalty, and its concentration on the recruitment of high-quality people. Like most institutions, Goldman Sachs has had its tribulations over the years, including the failure of the Penn Central Railroad, a Goldman Sachs client; the financial shenanigans of the media mogul Robert Maxwell, another client; the insolvency of Long-Term Capital Management, with whom Goldman's managing partner was closely involved; and the aftermath of the recent subprime mortgage crisis. It has also occasionally seen strong disagreements among its 200-odd partners, such as the one over taking the partnership public in 1999. The firm survived them all, and often emerged stronger. It is a testimony to the quality of recruitment and promotion that many senior partners went into positions of public service, but this book focuses on the firm, not the subsequent accomplishments of its members.