Ping An Insurance Becomes Goldman Sachs' First Principal Investment in China
Goldman Sachs makes its first principal investment in China in 1994 with the US$35 million investment in Ping An Insurance Company. The deal makes Ping An the first Chinese insurer to have foreign shareholders.
In 1994, Goldman Sachs made its first principal investment in China when it purchased a combined stake along with Morgan Stanley of 10% in Ping An Insurance Company. Each bank invested approximately US$35 million in Ping An, making it the first Chinese insurer to have foreign shareholders. The deal, among the first private equity investments in a Chinese company, was also the largest foreign investment in a Chinese financial institution at the time.
Ping An was founded in Shenzhen in 1988 by a consortium of the state-owned Industrial & Commercial Bank of China (ICBC), the conglomerate China Merchants Holdings and China Ocean Shipping. Goldman Sachs and Morgan Stanley provided Ping An both the capital the company needed to expand and also insights into Western corporate governance: following the investment, Ping An would establish a risk control committee and an investment committee.
Ping An was also the first Chinese insurer to have an international auditor and the first to offer investment-linked policies. By the time of its initial public offering in Hong Kong in 2004 (for which Goldman Sachs was one of four underwriters), Ping An was the second-largest life insurance company and third-largest property and casualty insurance company in China.
The trailblazing Ping An deal laid the groundwork for continued principal investments by Goldman Sachs in China and throughout Asia, including South Korea’s Kookmin Bank in 1998, Japan’s Sumitomo Mitsui Financial Group in 2003, and ICBC in 2006.