Goldman May Form China Venture With ICEA's Fang, People Say
Aug. 27 (Bloomberg) -- Goldman Sachs Group Inc. may form an investment bank in China with Fang Fenglei, who helped found the nation's biggest securities firm, to gain access to domestic share sales in Asia's second-largest economy, people involved in the plan said.
Goldman, the third-largest U.S. securities firm by capital, may reach agreement with Fang as early as next month, the people said, asking not to be identified. No contracts have been signed.
Working with a Chinese partner would enable Goldman to win domestic underwriting business on the mainland for the first time. Chinese companies sold $7.8 billion of stock at home last year, and the government wants to increase share ownership to tap the nation's $1.3 trillion of household savings.
``Goldman would like to be a lone wolf in China but right now that means foregoing the market,'' said Roy Chan, Shanghai chief representative at DLA Group, a law firm that advises companies on acquisitions. ``They need local partners to help them break into the market.''
Goldman's spokesman in Hong Kong, Edward Naylor, declined to comment. Fang, chief executive of ICEA Finance (Holdings) Ltd., the investment banking business of Industrial & Commercial Bank of China, also declined to comment.
Fang, 52, told Industrial Bank, the nation's biggest lender, that he plans to step down next month, the people said.
Goldman turned down a chance in the 1990s to work with Fang in forming China's first investment bank with an overseas partner. Morgan Stanley owns a 34 percent stake in the business, China International Capital Corp., which is controlled by China Construction Bank Ltd., the nation's No. 3 lender.
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