Goldman Sachs, the US investment bank, has reportedly partnered with the China Investment Corporation (CIC) to establish a fund aimed at acquiring American and British companies. This includes the acquisition of LRQA, the cybersecurity division of Lloyd’s Register, a UK maritime classifications group. Despite growing trade tensions between the US and China, the fund has already completed seven deals using the $2.5 billion in private equity capital provided by the CIC.
Established in 2007, the CIC manages Chinese government funds and currently has around $1.35 trillion in assets. Nearly half of the CIC’s global portfolio is invested in alternative assets such as private equity. The China-US Industrial Cooperation Partnership Fund was created during former US President Donald Trump’s visit to Beijing as a means of addressing concerns about trade imbalances between the two countries. The fund invests Chinese government funds into American enterprises.
The transactions conducted by Goldman Sachs and the CIC encompass a wide range of sectors, including global supply chain tracking, cloud computing, drug testing, manufacturing systems for artificial intelligence, drones, and electric vehicle batteries. One notable acquisition is LRQA, which specializes in inspection and certification services in sectors such as aerospace, defense, energy, and healthcare. LRQA includes Nettitude, a cybersecurity group that provides ethical hacking services and is an approved service provider for the UK government. The company’s website states that it helps strengthen government and defense organizations worldwide.
LRQA’s spokesman highlighted the significance of the Chinese market, stating that China accounts for 40% of the global certification market and that LRQA aims to address its under-representation in the country with assistance from the Goldman-CIC fund. In response to inquiries, Goldman Sachs emphasized that the fund is US-managed and in compliance with all laws and regulations. The bank added that it is committed to investing in US and global companies, helping them increase their sales in the Chinese market.
The collaboration between Goldman Sachs and the CIC exemplifies the ongoing economic relationship between the US and China, despite the trade tensions between the two nations. This partnership allows for the investment of Chinese government funds into American and British companies, fostering economic growth and expanding market opportunities.
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