America's Road to Fame

Chapter 224 To Take More Responsibilities

Meta Investment Company's private equity fund results, because they need to withdraw investment profit share, they sent a notification email to each investor, and informed them that the redemption and investment windows have been opened, and the news was announced.

Of course, what followed was that many people were asking Chen William a question, whether it is necessary to redeem this fund now, and Chen William’s reply to this was a matter of personal choice. In order to extract the share of investment income from the fund, recalculate the net value of the unit by the way.

However, for those who are close to him, William Chen’s suggestion can still be redeemed at this time, because he knows that as the intense and destructive phase of the subprime mortgage crisis is about to pass, he will soon face the era of quantitative easing, and the stock market will slow down. Therefore, the future income of this fund under the management of John Paulson will not increase too much, and may even cause losses.

This is why he is willing to increase John Paulson's share in this fund to 50%. Contribution rewards.

Therefore, including the Dre family, Ivanta, and Paris, they all began to redeem fund shares.

However, these actions have little impact on the No. 3 Fund, that is, the future John Paulson Fund. Because some people redeem it, more people hope to join in the investment, especially in the previous fund's rate of return. After the announcement, countless people waved banknotes, hoping to join this highly profitable fund.

Just like after the subprime mortgage crisis, many funds, including those well-known hedge funds, suffered heavy losses.In the same way, during this period, there were also many small funds before, because they went in the right direction and won excess profits.

The size of these funds before the subprime mortgage crisis was often below $1 million. Specifically, more than two-thirds of the funds had a size of less than $5000 million.It is easy to understand that the managers of these funds, in the eyes of the big Wall Street investment banks, belonged to the kind of fringe funds before, and they were able to bearish the market. They were originally contrary to the mainstream market, so not many people dared to invest in them. Most of them are gambling elements.

Even John Paulson, in the eyes of top investment banks like Goldman Sachs, was just a third-rate fund manager.

But it is precisely these small funds that are not in the flow, because they dare to use high leverage, many of them have gained more than ten or even dozens of times in this subprime mortgage crisis, and the rate of return is higher than that of John Paulson. There are many people.

It’s just that the rare thing about John Paulson is that the size of the fund he manages was more than 5 million US dollars in the early stage, and then directly increased to more than 70 billion US dollars. With such a large scale, he can still obtain these profits , this is what is valued by those investors.

There are no fools who can really have so much money to invest, so everyone understands that the income must match the risk.Yes, at any time, there are funds that can achieve a rate of return of several times or ten times, but most of them are short-lived. The higher the rate of return pursued, the less likely it is to be stable.

In this market, it is impossible for you to look in the right direction every time and win with high leverage every time.The higher the leverage, the lower the fault tolerance rate, and the harder it is to last. You can be right every time, but if you are wrong once, it will be a disaster.

This is why Buffett can be a god. It is really too difficult to maintain a fund with an average annualized profit of more than 20% like him for more than ten or 20 consecutive years.

Even so, after the subprime mortgage crisis, those once small funds have expanded to a scale of more than 50 billion US dollars, becoming large funds.This includes their profits, as well as subsequent additional investment.

However, there are still not many funds that can reach the scale of John Paulson's No. 3 fund. Even on Wall Street, there are very few funds that exceed US$200 billion.Therefore, among the winners of the subprime mortgage crisis, although John Paulson is not the one with the highest profit rate, he has also become the most famous one.

This also caused that, even after some people close to Chen William continued to choose to redeem the fund, the investment assets of No. 3 Fund before were reduced by more than 35 billion U.S. dollars, but the total size of the fund still exceeded 250 billion in the end. Dollar.

Because after Fund No. 3, now renamed the John Paulson Fund, opened the investment window, with the assistance of the custodian Goldman Sachs, it took less than a week for the new investment quota of 100 billion US dollars to be snapped up. empty.

This also allowed the size of the John Paulson Fund to exceed 250 billion U.S. dollars, the largest of which was the 50 billion U.S. dollars invested by the Saudi sovereign fund. It can only be said that the wealthy countries in the Middle East are still rich.

And these investments from the Saudi sovereign fund are also strongly recommended by Lloyd Blankfein, CEO of Goldman Sachs Group.

William Chen couldn't help thinking of what the other party told him before:
"William, you made a name for yourself in the subprime mortgage crisis this time, but correspondingly, it's best to be able to shoulder your own responsibilities."

Indeed, after the opening of the John Paulson Fund for investment, investors responded positively. It is not too difficult to accept the amount of 100 billion US dollars. Only the rich in the United States are enough to complete it.

As for why not accept higher investment?The main reason is the expansion of the fund this time, mainly because of the subprime mortgage crisis, and John Paulson has no experience in managing such a large-scale fund before, so William Chen does not want to make the fund too large, just to be on the safe side. Otherwise, if John Paulson misses and causes too much loss, even if the fund does not need to pay any compensation, it will have a great negative impact.

The size of the previous fund has reached more than 250 billion US dollars, so it is relatively safe to ensure that it is within this size.

What William Chen hoped most before was investment from the United States or Europe, so that he could have more powerful resources for his own use. As for the wealthy countries in the Middle East, uh, it seems that they can't help much except for oil.

But what Lloyd Blankfein said next made William Chen understand that he really needed to accept some of their investment.

"In this subprime mortgage crisis, the local wealthy countries in the Middle East have suffered a lot of financial losses. In addition to the explosion of Bernard Madoff's Ponzi scheme, most of the losses have been caused by the local wealthy countries in the Middle East. So now they have a lot of money for Wall Street. The trust of investment banks and funds is declining, and they think that their assets have been cheated too much. At present, it seems that their funds have a tendency to transfer to Asia and Europe.”

"But the U.S. government is doing everything possible to save the financial market, so it doesn't want to see such a situation. Now you are the best performer in this crisis, and it is easier for the local tyrants in the Middle East to trust you, so when When they withdrew their funds from other funds, you should also take more responsibility here to keep their funds in the financial market of the United States, which is also to help the country prevent the loss of funds.”

Hey, the so-called greater ability comes with greater responsibility. It seems that I still have to bear some responsibilities, so that I can cooperate with the strategy of the entire country. The premise is that the meat cannot be taken away, whether it is their funds Whether it is with other investment banks or with William Chen, the final investment is in the financial market of the United States, and it is just transferred from the plate of the entire country.

But if these funds go to Europe or Asia, it will be different. In order to stabilize the market, wouldn’t the already busy American money printing factories have to work overtime and even add machines?
And in fact, this kind of sign has already appeared, just like the Softbank Group, Sun Zhengyi recently, the wallet has bulged again, the Softbank Group has just received more than 500 billion US dollars of investment from local tyrants in the Middle East, and a lot of this money is transferred from the American market In the past, other countries in Asia, such as Huaguo, have recently been very popular with local tyrants in the Middle East.

Naturally, the U.S. government cannot see this situation continuing to happen, and must take action.As for Chen William, it can be regarded as a banner launched by them. Did you see that we are all in debt, and there are also those who have invested heavily, and they still don’t invest all the money in him.

For example, those rich countries in the Middle East are rich in oil resources, and it is very easy to get money.But people have short-term worries without long-term considerations. They are also worried about what to do if the domestic oil production runs out?Then invest quickly and let the money continue to generate money. This is the long-term solution.

Therefore, the sovereign funds of these countries, including Saudi Arabia, Kuwait, Qatar and other countries, invested their funds all over the world, and the largest share of them entered the American market.

And in order to win the favor of the American government, they often have to make contributions. For example, Citigroup and Merrill Lynch were invested by these sovereign funds at the beginning of the subprime mortgage crisis to help them get out of the predicament. These investments are still suffering substantial losses.

When they found out that your economy was in crisis, I became a leek instead and lost the most.Then I have to make an extra plan, so there are signs of shifting to Europe and Asia, just like the consortium of a rich country in the Middle East investing in European football. It was from this time that the purpose was to enter the European market.

To prevent this from happening now, someone needs to take their money, so according to Lloyd Blankfein, the $50 billion is just the beginning, and there will be more if needed funds are recommended.

Seeing that William Chen decided that the latest fundraising scale of the John Paulson Fund would only be limited to 100 billion US dollars, Lloyd also began to persuade William Chen that he should manage a fund himself. If that is the case, they are sure that at least Give him $200 billion in funding.

It is no wonder that Lloyd is so active. You must know that William Chen is now the largest individual shareholder of Goldman Sachs, so his fund will also be placed in the trusteeship of Goldman Sachs. You can think about it. Giving them custody, only 200% of the custody fee per year, that is 0.5 million US dollars, this is free money, and they don't need to pay too complicated thoughts at all.

(End of this chapter)