Investing.com - Goldman Sachs Group Inc (NYSE:GS) head of private equity in Asia, Stephanie Hui, has revealed that she no longer focuses on raising funds in the United States due to rising geopolitical tensions between Washington and Beijing. Speaking at a recent private equity conference in Hong Kong, Hui explained that her fundraising efforts have shifted towards regions like the Middle East, Southeast Asia, China, Korea, and Japan.
Hui stated that these areas hold greater interest for investors looking into opportunities within China. A spokesperson for Goldman Sachs clarified that her remarks reflect broader industry trends rather than an isolated shift within the bank itself.
This pivot highlights growing concerns among North American investors about investing in China amidst escalating political strife and new investment-screening mechanisms targeting Chinese ventures. For instance, earlier this year Canada's Ontario Teachers' Pension Plan announced a pause on direct investments in private assets within China.
Despite operating as a separate entity within Goldman Sachs Bank, its asset management division manages global funds sourced from international investors across various regions. While historically generating significant returns in Asia-Pacific markets such as China has been lucrative for the firm’s growth equity arm led by Hui; it is not expected to impact overall fundraising levels significantly since other colleagues can still raise capital from US-based institutions.
During the same event hosted by the Hong Kong Venture Capital and Private Equity Association (HKVCA), Hui shared insights into sectors of interest for future investments. She mentioned data analytics and artificial intelligence as primary targets while healthcare providers and travel services manufacturers were also highlighted alongside value-for-money retailers catering to more frugal spending habits among consumers.
Notable past examples of successful Chinese investments made by Goldman Sachs Asset Management include Alibaba Group Holdings Ltd ADR (NYSE:BABA), iTutorGroup education platform, and Shanghai-based biotech company Zhenge Biotech. However, Hui also pointed out that Chinese investors now contribute a smaller share to global private equity funds as per McKinsey's data which shows China representing only 34% of fundraising in Asia in 2022 compared to an overwhelming 83% back in 2017.