Dec. 5 (Bloomberg) -- Temasek Holdings Pte will invest $1 billion in a private-equity fund set up by Goldman Sachs Group Inc.'s Chinese partner, the Wall Street Journal reported, citing people familiar with the transaction.

The Singapore state-owned investment company will provide half of the money for the $2 billion private-equity fund, the newspaper said, and the remaining $1 billion will be raised through several smaller investors.

The fund, set up by Fang Fenglei, chairman of Goldman's Chinese securities joint venture, will focus on buying stakes in China's state-owned companies, the newspaper said. Temasek, which manages more than $100 billion of assets, got its board's approval for the funding last month, the newspaper said.

To contact the reporter on this story: Jean Chua in Singapore at jchua4@bloomberg.net.

Last Updated: December 4, 2007 19:50 EST