Goldman Sachs used cash from a partnership established with Chinese state-backed financing to purchase a number of US and UK companies notwithstanding rising political tensions between the West and China, according to a report by The Financial Times on Wednesday.
In 2017, the Wall Street banking behemot launched a $2.5 billion partnership fund with China Investment Corporation (CIC), the country’s sovereign wealth fund, on the occasion of Donald Trump’s official trip to Beijing.
According to the FT, at least seven contract were signed, covering a wide range of industries, including global supply chain tracking, cloud computing, drug testing, AI manufacturing systems, drones, and electric car batteries.
In 2021, the fund purchased LRQA, an inspections and cybersecurity branch of Lloyd’s Register, the UK’s marine classifications organization. Additionally, the fund made an investment in the ethical hacking company Nettitude.
Investments in the US include Parexel, a business that does pharmaceutical testing, and Cprime, a consultancy focused on cloud computing. According to the Financial Times, the fund also invested in Boyd Corporation, a California-based manufacturer that specializes in cooling systems for drones and machine learning applications; Project44, a start-up focused on tracking global supply chains; Aptos, a retail technology company, and Visual Comfort and Co, a lighting company.
At the time, Goldman Sachs CEO Lloyd Blankfein claimed the fund sought to allay Washington’s worries about the trade deficit with China by directing Chinese investments into American businesses. The fund’s partner, CIC, concurrently stated that it would operate as a “anchor investor” and be actively involved in assisting the purchased companies’ growth in the country.
In a statement responding to the Wednesday report, Goldman stated that “the co-operation fund is a US fund run by a US manager, and is managed to be in compliance with all laws and regulations. The bank continued by saying that it “continues to invest in American and international businesses, assisting them in growing their sales into the China market.”
