Goldman Sachs allegedly used a fund set up with Chinese state money to buy a total of seven US and UK companies, including one company from cyber security which provides services to the British government. The reports Financial Times, pointing out that the fact would have occurred despite the growing tensions between Beijing and the West.
The fund in question is a “partnership fund” of private equity of the worth $2.5 billion created in 2017 in partnership with China’s sovereign wealth fund China Investment Corporation (Cic). The transactions include a start-up specializing in tracing global supply chains, a consultancy for the cloud computinga drug testing company and manufacturer of systems used in theartificial intelligencein drones and batteries of electric vehicles.
Spotlight on Lrqa, a cybersecurity company at the service of the UK government
Also reportedly in 2021 Goldman would use the partnership fund with Cic to help finance the purchase of LRQA, the inspection and cyber unit of the British maritime classification group Lloyd’s Register. Lrga provides inspection and certification services and operates in the aerospace, defense, energy and healthcare sectors, among others. The business includes the Cyber Security 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 the“ethical hacking”, in which its personnel attempt to hack into customers’ systems to assess their vulnerabilities. In the operation Lrga and in others, the bottom Goldman-Cic it has invested alongside separate private funds that the bank manages, which means, notes the Financial Times, that the financial involvement of the Chinese state has been relatively small.
20 September 2023 – 09:30
Improved Security Posture and maximum visibility on hacker attacks? Use AI
The role of private equity in the “critical” investments of sovereign wealth funds
Despite Goldman Sachs announced investments in the acquired companies, the bank did not disclose that the operations were financed, at least in part, by the Chinese fund. These 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, especially those from China.
Lloyd Blankfein, ex-CEO of Goldman Sachs, launched the China-US Industrial Cooperation Partnership Fund during the state visit of Donald Trump in Beijing in 2017. The goal was to address Washington’s concerns about the trade imbalance between the United States and China by investing Chinese capital in American companies. The bank said the CIC would be a “key investor” in the fund and play an active role in helping the acquired companies expand into China.
@ALL RIGHTS RESERVED