Goldman Sachs launches maiden RMB fund

The US giant is targeting RMB5bn for growth capital investments and the restructurings of Chinese state-owned enterprises.

Goldman Sachs has launched an RMB-denominated fund with a target of RMB5 billion (€543 million; $769 million), a source told PE Asia.

The US investment bank declined to comment.

A signing ceremony was held Thursday in Beijing, according to the source, and the Beijing government is expected to seed the fund. The size of the commitment is unknown.

The fund will focus on growth capital investment and state-owned-enterprise restructuring, the source added.

In addition to being Goldman Sachs’ first RMB fund, it is also the firm's first country-focused pool of investment capital.

It is unclear whether Goldman will be raising the fund entirely from domestic LPs or from a combination of foreign and domestic LPs, as Beijing is expected to soon announce its version of the so-called QFLP programme, which allows foreign investors to commit to onshore RMB-denominated private equity funds.

Goldman Sachs has been a cradle for many heavyweight Chinese private equity players. Among the most prominent is Fang Fenglei, who co-founded Hopu Investment alongside Goldman colleague Richard Ong. Ong later started RRJ Capital, which is expecting a $2 billion final close on its Asia-focused fund.

Also grabbing headlines is Fred Hu, who left Goldman Sachs last year to set up Primavera Capital Group which has reportedly raised more than $2 billion for its maiden fund.

Another former Goldman banker, Frank Tang, left the bank in 2005 to join Temasek Holdings as a senior managing director of China investments. He then left the Singaporean sovereign wealth fund and went on to set up China-focused FountainVest in September 2007. The firm closed its maiden fund on almost $1 billion in November 2008.

Goldman Sachs is currently building a team to raise funds for third-party private equity firms, a move that put the firm in direct competition with placement agencies like those run by Credit Suisse, UBS, Greenhill and Probitas Partners.