Goldman Sachs Acquires Stake in Chinese Insurance Company (GS)

Goldman Sachs GS has acquired a 12% stake in China's Taikang Life Insurance Co Ltd worth more than $900 million. Analysts have projected that Goldman's ownership could fast-track Taikang's planned initial public offering next year. $124 billion in premium income was generated in China in 2009, which is likely a significant factor in Goldman's decision. According to a Reuters report, "Goldman is not new to the China insurance industry, having previously bought a stake in Ping An along with Morgan Stanley MS in 1994. But Goldman is using its balance sheet to buy the Taikang stake, while the previous investment was made through its private equity arm." Credit Suisse has estimated China's life insurance market will grow by more than 20% each year for the next decade. The Reuters report notes that "Taikang and New China Life Insurance Co. are among insurers which are looking to tap the public market over the course of the next year or so. Taikang has about $44 billion in assets and 54 million clients across China." Shares of Goldman Sachs closed higher by $0.51 on Thursday, to $162.40.