Walter Hutchens’ Blog

Goldman Sachs has an investment banking venture in China, one carefully (and creatively) structured to be able to do the full range of activities they might want to do (but not be allowed to do under China’s ostensible rules on JV investment banks). I wrote about the venture’s creation here, here, here and here.

Despite the creative structuring (and special donation Goldman reportedly made to get the deal approved), the venture has not so far taken the PRC investment banking world by storm.

The venture has recently undergone a management reshuffle. Joe Stevens quit as CEO at the end of September. Now Bill Wicker will leave and return to Goldman in New York. Richard Ong will come to Beijing from Singapore to take Wicker’s place.

Fang Fenglei remains. He is the head of Gao Hua, the Chinese party in the joint venture and the entity that holds licenses for activities the JV is not permitted to engage in. Gao Hua, though classified as a Chinese entity, was reportedly capitalized by loans from Goldman. Presumably these loans came with some contractual provisions that allow Goldman to run the show so that it can control the JV and Gao Hua itself, at least so long as PRC regulators and Fang remain cooperative.

Reuters reports on the personnel changes based on a Goldman memo they got their hands on.

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