Now the attraction has prised Fang Fenglei, the man with arguably the most generous job arrangement in Asian investment banking, from his day job.
Fang is chairman of Goldman Sachs Gao Hua, the joint venture that enables Goldman to play a part in domestic Chinese investment banking, including underwriting IPOs on the Shenzhen and Shanghai stock exchanges. Goldman owns only one-third of the venture, with the majority stake being held by a Chinese securities firm called Gao Hua Securities Company, in which Fang and partners own 75%.
Strictly speaking, this means Goldman does not control it; this, and the $100 million the bank is understood to have lent to Fang and his partners to get the venture off the ground, constitute a remarkable display of trust by Goldman towards an individual, although it is understood that the venture is swamped in contracts to protect the bank’s interests.
Consequently, bankers in the competitive world of China investment banking were surprised when Fang quit as chairman of the venture in September. Fang plans to maintain a relationship with Gao Hua, presumably as a non-executive adviser, but he is understood to be trying to set up a private equity fund that not only invests in China but is also physically based and domiciled there.
Quite what this means for Goldman is unclear. The bank has certainly had plenty of success in getting onto local IPOs. However, nobody believes Goldman is a one-man team despite Fang’s long-term record of success dating back to his days at CICC. "We’re not celebrating over here," says someone at a rival foreign bank. "We don’t know what the impact on Goldman’s model is going to be because we never understood how that model worked in the first place."