The American Goldman Sachs did business thanks to the Chinese sovereign wealth fund CIC
Goldman Sachs has tapped a fund set up in partnership with Chinese sovereign wealth fund China Investment Corporation (CIC) to buy a string of US and UK-based companies at a time of rising tension between Beijing and the West. Here's what the Financial Times revealed.
As tensions mounted between Washington and Beijing, Goldman Sachs used Chinese government money to acquire US and British companies.
It is the scoop of the Financial Times, according to which the American investment bank has used a fund created in collaboration with the Chinese sovereign wealth fund China Investment Corporation (CIC) to buy a series of US and British companies, including one with a cyber security business providing services to the UK government.
Specifically, according to the British newspaper, Goldman Sachs concluded seven deals using the liquidity of a $2.5 billion private equity "partnership fund" created in 2017 with the CIC fund.
Among the companies at the heart of these deals are a start-up that follows global supply chains, a consultancy that advises on cloud computing, a drug testing company and a manufacturer of systems used for artificial intelligence, drones and batteries for electric vehicles.
Although the bank announced that it had invested in the companies, it did not say that the operations would be financed at least in part by the Chinese fund, the FT points out. Not only that, the newspaper adds, despite the increasingly tense relations between Beijing and the West in recent years, Goldman has stepped up the activity of the partnership fund.
All the details.
GOLDMAN SACHS' INVESTMENT ACTIVITY WITH THE CHINESE FUND
From the FT report, it emerges that Goldman Sachs has completed seven operations using liquidity from a "partnership fund" with the Chinese sovereign wealth fund CIC.
Despite the escalation of tensions between Beijing and the West, the US investment bank has accelerated the activities of the fund, making four investments in 2021 and one last year.
“The deals highlight how private equity funds have helped sovereign wealth funds build indirect stakes in companies in critical sectors as Western governments have increased scrutiny over foreign direct investment, particularly from China,” comments the Financial Times .
THE INVESTMENTS OF THE GOLDMAN-CIC FUND IN US AND UK COMPANIES
The operations carried out by the Goldman-Cic fund also include investments in US companies such as Cprime, which provides consultancy on cloud computing; Parxel which produces drug tests; Project44, a start-up that tracks global supply chains; Aptos, a retail technology group; Visual Comfort & Co, a lighting company, and Boyd Corporation, a California manufacturer whose products include cooling systems used in machine learning and in drones, list the Ft .
The bank disclosed its investments in these companies but did not disclose that the operations were partly financed by the Chinese fund CIC, the London newspaper noted.
WHAT IS CIC (CHINA INVESTMENT CORPORATION)
As the Financial Times recalls, the foundation of the China Investment Corporation (Cic) dates back to 2007 to invest Chinese state money: at the end of 2021 it had assets of 1.35 trillion dollars. Nearly half of its global portfolio was invested in alternative assets such as private equity, according to its website.
THE PARTNERSHIP FUND BETWEEN THE US BUSINESS BANK AND CIC
The fund in partnership with Goldman Sachs was one of several so-called "bilateral funds" that CIC set up with international investment groups to strike deals in their home countries, helping to increase its exposure to Western companies, the newspaper said.
In addition, Cic also sits on the fund's "limited partners advisory committee," a term used in the private equity industry for a group of key investors in a fund who can be consulted for advice, although they don't.
Then-bank CEO Lloyd Blankfein launched the China-US Industrial Cooperation Partnership Fund during Donald Trump's state visit to Beijing in 2017, saying it would help address Washington's concerns about a trade imbalance between United States and China by investing Chinese capital in American companies.
The bank also said the CIC would be a "key investor" in the fund and play an active role in helping the acquired companies expand into China.
At the same time, Goldman maintained a relationship with Cic. CEO David Solomon met with CIC Executive Vice President Qi Bin and President Peng Chun in March, according to a CIC statement, the FT reports.
THE PURCHASE OF THE BRITISH LRQA
In 2021, Goldman used its partnership fund with CIC to help finance the purchase of LRQA, the inspections and cyber unit of UK maritime classification group Lloyd's Register. Lrqa provides inspection and certification services. It operates, among others, in the aerospace, defence, energy and healthcare sectors. The business includes cybersecurity group Nettitude, which claims on its website that it is a UK government-approved service provider and helps "strengthen government and defense organizations around the world".
His work includes "ethical hacking," in which his personnel attempt to hack into customers' systems to assess their vulnerabilities.
In the Lrqa deal and others, the Goldman-Cic fund invested alongside separate private funds that the bank manages. This means, observes Ft , that the financial involvement of the Chinese state is relatively small.
THE POSITION OF GOLDMAN SACHS ON THE CHINESE FUND
Finally, Goldman said in a statement: “The cooperation fund is a US fund managed by a US manager and is managed in compliance with all laws and regulations… It continues to invest in US and global companies, helping them grow their sales. in the Chinese market".
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/americana-goldman-sachs-ha-fatto-affari-grazie-a-fondo-statale-cinese/ on Wed, 30 Aug 2023 12:34:33 +0000.