Goldman Sachs Group Inc., an American investment banking company, and China Investment Corp., China’s giant sovereign-wealth fund, are teaming up on a multibillion-dollar fund to support the CIC in investing in the U.S. manufacturing and other sectors, based on statements from people with knowledge of the matter.
According to the people, the fund is a co-investment partnership between Goldman Sachs and CIC, which are aiming at a whopping US$5 billion. Both are set to unveil their partnership jointly this week during the visit of US President Donald Trump to Beijing. The amount of capital contribution of each party remained undisclosed and still being worked out, the people added.
If finalized, the deal is one of the several agreements U.S. and Chinese businesses are anticipated to share in a ceremony led over by Trump and Chinese President Xi Jinping on Thursday in Beijing’s Great Hall of the People.
The partnership with Goldman would support CIC in growing its U.S. investments to consist more than publicly traded securities, real estate, and private equity assets.
CIC, which holds more than US$200 billion in foreign assets, is showing a great interest in U.S. high-tech manufacturing, highways, rail lines, and other projects, aiming to produce stable, long-term returns for the fund and obtain the technological expertise to help improve and advance the industrial base of China. In return, the fund can be a stable source of long-term capital for U.S. plans, the CIC officials said in a statement.
By working with a top Wall Street company, CIC is looking to reduce the possibilities its investments will be blocked, one of the people said.
For Goldman, the deal deliberates respect and implies the company’s position in an initiative that is observed to be of strategic significance for both nations.
Goldman Names New Strategy Head
The investment banking company named Stephanie Cohen to replace Stephen Scherr as chief strategy head as the company begins a three-year growth plan.
Cohen joined the company in 1999 as an analyst and received the partner title in 2014. She has run mergers-and-acquisitions banking for financial sponsors since 2015.
“We look forward to working closely with Stephanie to identify and execute on additional growth opportunities, including how we can serve more of our corporate clients’ needs across the full range of our businesses,” Chief Executive Officer Blankfein and co-Presidents Harvey Schwartz and David Solomon wrote in the memo.
After the fixed-income trading business recession and annual revenue downfall in 2016 to the lowest in five years, the company’s strategy has come into focus. The company highlighted a plan in September to produce $5 billion in additional revenue over the next three years, with more than 40 percent of that coming from lending. The consumer-banking unit is believed to take a vital part in the company.
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