Its Fang Fenglei, to be exact. The bank’s wingman in China is set to make his first big investment on behalf of the private-equity fund the two sides cooked up last year. A look at the makings of this maiden voyage.
Fang Fenglei, Goldman Sachs Group Inc.'s China partner, is investing $300 million in the owner of a Mongolian iron ore mine together with Temasek Holdings Pte, his first deal since starting a private equity fund last year.
Hopu Investment Management Co., founded by Fang in 2007, joined with Temasek to buy three-year convertible bonds in Hong Kong Lung Ming Investment Holding Ltd., which operates the mine, according to a document seen by Bloomberg News. The document's contents were confirmed by two people familiar with Fang's plans. They requested anonymity because the talks are private.
Fang gave up day-to-day duties running Goldman's China venture last year to focus on his private equity firm, while remaining chairman. He joins Rio Tinto Group and BHP Billiton Ltd. in seeking to tap Mongolia's mineral wealth as China's construction boom pushes iron ore prices higher.
"This is a very impressive first move for Fang," said Liu Yang, who manages $4 billion at Atlantis Investment Management Ltd. in Hong Kong. "The Chinese government is putting a lot of support behind the iron ore industry, and China's demand for the material will also last for a very long time as consumption grows."
Hopu Investment will join Los Angeles-based Clarity Partners LP and Credit Suisse Group as an investor in Lung Ming, according to the document.
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