Exchange Fund Investment Limited (EFIL)

In a watershed event for the Hong Kong markets, Goldman Sachs advised the Hong Kong government on its initial disposal of shares purchased during its market operation in August 1998 to deter the attack on Hong Kong’s financial markets. The shares had appreciated significantly, and the government’s primary objective was to launch a series of orderly sales with minimum disruption to the marketplace. Goldman Sachs assisted Exchange Fund Investment Limited, set up by the government, in designing and establishing the Tracker Fund of Hong Kong (TraHK) and in developing a marketing strategy for TraHK—an innovative exchange-traded investment fund that tracks the Hang Seng Index. One of the challenges was to attract interest among Hong Kong retail investors, a group that had traditionally shunned funds in favor of individual equities. Our firm acted as joint global coordinator for the IPO of TraHK. Drawing on extensive experience with similar products elsewhere, we helped to design the product, develop a retail marketing campaign of unprecedented scale in Hong Kong and execute a global road show for institutional investors. The offering attracted significant interest among Hong Kong retail investors and international institutional investors, enabling the government to dispose of over US$4 billion in equity with minimal disruption in the marketplace. In addition, it attracted significant new capital back into the Hong Kong markets. This was the largest IPO ever in non-Japan Asia.