Goldman Sachs’ Chinese dealmaker stops tapping US investors

Featured Sponsor

Store	Link	Sample Product
UK Artful Impressions	Premiere Etsy Store

The head of Goldman Sachs’ private equity business in Asia said he has stopped trying to raise funds in the United States due to geopolitical tensions between Washington and Beijing.

Stephanie Hui, who manages Goldman Sachs Asset Management’s Asia-Pacific private equity and growth equity arm, with investments that include deals in China, made the comments to a private equity conference in Hong Kong on Tuesday.

“I have been asked to comment on what we are seeing in the market. . .[one is]geopolitics,” he said.

“I often went to the United States to raise funds. My friends know that my destination lately is the Middle East. I go to Southeast Asia a lot, I go to China a lot, and I go to Korea and Japan.

“Why? Because there is more interest in this part of the world, especially China, from the countries I just listed. I only go to the US to see my boss . . not to raise money.”

A bank spokesman said his comments were a reference to broader trends in the industry.

Hui’s experience is indicative of how US investors, such as public pension funds, are increasingly wary of deploying money to China at a time when tensions are running high and Washington is finalizing a new outward investment control mechanism aimed at China.

The Ontario Teachers’ Pension Plan, a Canadian fund, said in January it had suspended direct investment in private assets in China.

GoldmannThe wealth management arm operates, in effect, like a private equity firm within the bank. It manages global funds raised from international investors that can be distributed around the world, although it has historically generated outsized returns in Asia.

Hui’s comments are more an indication of investor sentiment than a sign that the bank will raise less money in the US, since Goldman’s structure means Hui’s US colleagues can raise money from US institutions, which is then pooled with money raised in Europe and Asia and invested around the world.

“I grew up investing in China,” Hui said at a conference organized by the Hong Kong Venture Capital and Private Equity Association. As for which industries to invest in, “data analytics and artificial intelligence are definitely what we’re looking for,” she said.

Other sectors of interest were healthcare, travel and manufacturing in China as well as value-for-money retailers, because “you talk a little more thrifty people about [their] expense”.

Goldman Sachs Asset Management’s previous investments in China include Alibaba, education firm iTutorGroup, and Shanghai-based Zhenge Biotech, according to data provider PitchBook.

Hui also noted that Chinese investors made up a smaller proportion of the money in private equity funds globally, citing data from McKinsey that showed China accounted for just 34% of fundraising in Asia in 2022, down from the previous year. 83% in 2017.