Goldman, UBS take backseat in Shenzhen

BEIJING - Goldman Sachs Group Inc and UBS AG are missing out on Chinese initial public offerings (IPOs) as local investment banks lead record numbers of small companies to sell shares in Shenzhen.

China accounts for a third of the $150 billion raised worldwide in IPOs this year, yet the average deal size has shrunk as companies rush to list on Shenzhen's ChiNext startup board introduced in October. Goldman Sachs, ranked first in overseas IPOs by Chinese companies, has expanded its local investment-banking unit's workforce by about 40 percent in 2010 as it moves to target smaller domestic offerings.

"We are going to put more focus on ChiNext IPO deals," Thomas Deng, head of China equity capital markets at New York-based Goldman Sachs, said in a Sept 8 interview. "Our pipeline has traditionally been mostly big deals, or at least that's the perception. This may change."