Temasek to back China fund set up by Goldman partner

BEIJING -- Singapore's massive state-run investment company, Temasek Holdings Pte. Ltd., will put US$1 billion (£á680 million) into a private-equity China fund set up by Goldman Sachs Group Inc.'s China partner Fang Fenglei, the Wall Street Journal Asia reported Wednesday.

Fang, chairman of Goldman's Chinese securities joint venture, will set up a US$2 billion private-equity fund to be anchored by Temasek, which is providing half the funding, the report said.

The other US$1 billion will be funded by several smaller investors, the Journal reported, citing a person knowledgeable about the plan.

The report quoted another person as saying the fund will focus on buying stakes in state-owned Chinese companies. Temasek's board approved the funding last month, the person said, according to the Journal.

Officials at Temasek did not immediately respond to requests for comment.

The investment arm of the Singaporean government has been increasingly looking at China as it diversifies its portfolio outside of Singapore.

It has bought stakes in banks and along with Singapore Airlines struck a deal for a combined 24 percent stake in China Eastern Airlines Cop., the country's third-biggest carrier.

Last month in what it said was a rebalancing of its portfolio, Temasek sold shares in two mainland China banks, and media reports said the sales netted Temasek US$800 million (£á542.5 million) in proceeds.