Chapter 1115 Exchange of Interests
"The PE fund belongs to Hanhua, and by the way, it also includes Hongyan Fund. The S Fund that purchased its shares also belongs to Hanhua and Hongyan.
Does this mean that Hanhua will charge LP two management fees and two income sharings? ”
A fat old man with a big head and big ears asked the other guests what they were thinking.
Although Hanhua has a good return rate, they still have to weigh it in their minds if the fees are too high.
Xu Liang, who had long expected that someone would ask this question, smiled and said:
“Kunlun Technology, Facebook, and YouTube in the PE fund’s investment portfolio are all the top and highest-quality Internet companies in the world.
Can any investment company buy these high-quality targets?
Even Sequoia Capital and Kleiner Perkins Caufield & Byers don't have this face.
I can tell you clearly today that Internet companies such as Kunlun Technology and Facebook will almost never raise funds again.
Even if someone wants to invest in them in the future, they can only buy stocks.
But by that time, the valuation will not be what it is now.
Ordinary PE funds can invest in any company such as Facebook and Kunlun Technology, which is enough to be called a star fund.
The S fund we plan to launch can be called a star fund. Each target is carefully selected and difficult to reach by ordinary investment institutions.
In the future, we will also consider including high-quality companies such as Workday Company, Hynix, and Penguin into the S Fund investment portfolio. ”
Xu Liang talked eloquently and kept pressing the remote control in his hand.
The 2006 revenue and returns of Workday Company, Hynix, Penguin and other companies also appeared on the big screen.
Although those present have limited understanding of the financial industry.
But we can also see their rapid development speed and bright development prospects from the clear growth curve.
"Please think about it.
Suppose there are two funds in front of you for everyone to choose from.
One has a return rate of only 10%, and the income is divided into 28%;
The other one has a return rate of 1000% and the profit is divided into 40% and 60%.
Which one will everyone choose?
I think everyone will choose the second one just like me.
Although the share is high, I can earn more.
Good things must be expensive, and cheap things cannot be good. This is a universal truth.
Whether it's Hanhua, Mr. Buffett's Berkshire Hathaway, or even KKR, the fees of all star investment companies are higher than the industry average. ”
The eyes of everyone in the audience flickered.
Although they have the title of blue-blooded nobles, most of them can only be called rich, not wealthy.
Take Facebook, for example, its latest valuation exceeds US$24 billion.
If there is a new round of financing, the participating party will definitely be in units of US$1 billion.
Except for large institutions or the super rich, they simply cannot afford to invest.
Although Xu Liang didn't point this out, everyone present understood the hint.
If you want to get the opportunity to invest in Facebook, you can only raise funds together and invest in the form of a fund.
As for why Xu Liang created an S fund, they speculated that he wanted to charge more.
After thinking about all this, many people showed expressions of enlightenment.
Immediately someone asked again: "So Darren, what are the specific charges?"
"The PE fund has an annual management fee of 2% plus a 30% excess income share, and the S fund has the same charging model."
Immediately, some people began to calculate in their minds. It was not Hanhua’s 20% + 30% and 50% of the profits, but another calculation formula.
For example, Facebook is currently valued at $24 billion.
S Fund purchases PE fund shares based on this valuation. In the future, Facebook will grow to a market value of US$100 billion, and the sale will make a profit of US$75 billion.
Of this part of the profit, the PE fund GP will take 20%, and the S fund as the LP will take 80%, which is 60 billion US dollars.
This is not over yet. As the GP of the S Fund, Hanhua still needs to take 30% of the US$60 billion, and the remaining US$42 billion is the profit of the LPs present.
Of the US$75 billion profit, Hanhua took away US$33 billion, about 44%.
This does not include the 2% annual management fee, and the share ratio is even higher.
The results must have been calculated, as the expressions of many people in the audience kept changing.
I want to indirectly hold equity in high-quality companies such as Facebook and Kunlun Technology, but I feel pained by the high charging ratio.
It's already 2007, and almost no one still thinks that Internet companies are a bunch of bubbles.
After Google went public, its stock price quadrupled, and its market value exceeded $100 billion.
Institutions that invested in Google before it went public made a lot of money, creating a new investment myth.
Although Bing's valuation after its listing did not rise as crazy as Google's, its market value now exceeds US$150 billion.
Facebook's development momentum is getting faster and faster, and it has attracted the attention of investment institutions.
It seems to be the world’s most highly valued super unicorn.
So no one wants to pass up the opportunity to invest in such a superstar.
It's just that they want to make more.
Someone asked unwillingly:
"Xu, the size of the S fund is as high as 20 billion US dollars. Can we directly buy all the underlying equity held by the PE fund?"
Xu Liang smiled slightly.
Sure enough, greed has no limits.
After all his good words, these descendants of opium dealers just want to pay the management fees and profit sharing of a fund.
If you do what the other party said, the PE fund and the S fund will have nothing to do with each other. This is something he will never allow.
"The current valuation of Facebook has exceeded US$24 billion, and Hanhua and Hongyan are preparing to invest 20% of their equity in the S Fund.
This alone is $4.8 billion.
Kunlun Technology is currently the largest consumer electronics company in Asia, with a product line including laptops, PCs, USB flash drives and more than a dozen products.
And it has just released the Kunlun mobile phone, a cross-generational product.
From launch to now, we have received 1.74 million purchase applications online.
But this is just the beginning.
With the continuous improvement of offline channels and the launch of the 3G version of Kunlun mobile phones, the development of Kunlun Technology will become faster and faster.
Its valuation is also rising.
If you don’t have an accurate judgment about Kunlun Technology, you can refer to Apple.
Apple’s current market capitalization is US$73 billion…”
Many people in the audience had disapproving looks on their faces.
Although Kunlun Technology is developing well, how can it possibly compare with Apple?
Of course, they did not openly question it. Kunlun mobile phone looks good. If it can succeed, even if it is not as good as Apple, it can still guarantee a market value of 30 to 40 billion US dollars.
"Global Tourism Group is currently the largest tourism company in China and has the operating rights of 17 large-scale scenic spots.
It also owns four Universal Studios in the United States and China.
Total global revenue in 2006 exceeded US$7.3 billion.
The valuation is close to $19 billion.
YouTube…
NBA Warriors…
Premier League Manchester United..."
Xu Liang introduced the companies involved in the S Foundation one by one.
After the end. Looking at the audience, Xu Liang said calmly:
"The combined equity of all companies is worth more than $100 billion.
Even if only 20% is placed in the S fund, a fund with a total raised capital of US$20 billion may not be able to acquire all the equity. ”
The audience in the audience had different expressions.
Some are disapproving and some are in disbelief.
“Xu, is Facebook’s valuation of US$24 billion too high?
And the Kunlun Technology you mentioned, I don’t think it can reach the level of Apple. ”
Xu Liang looked at the person who asked the question without getting angry.
“The valuation of Facebook is not what I say, but the valuation given by investment institutions.
Goldman Sachs and JP Morgan can endorse this valuation.
Moreover, Facebook has been developing rapidly, and now it should be more than 24 billion US dollars.
As for whether Kunlun Technology is comparable to Apple, if the controversy is too great, we can take it out temporarily.
What I need to emphasize is that all transactions will be evaluated by professional investment banks and accountants, so you don’t have to worry about losing money. ”
Everyone in the audience, you look at me, I look at you, no one asked any more questions.
Xu Liang observed his words and took the opportunity to say:
"It has been seven years since Hanhua was established. The company's performance in the past seven years has won the trust of countless customers around the world.
Please believe that we cherish Hanhua's reputation more than you do.
‘Phoenix Fund’ is the first S fund we established, carrying our expectations for the global private equity secondary market.
We hope that this fund can create the best returns and help Hanhua become one of the world's top asset management companies.
In order to give everyone a basic guarantee, we have also specially formulated a guaranteed return rate of 10% per year.
Below this number, the S Fund only charges management fees and does not charge excess income sharing.
For the portion above 10%, we charge 30% of the excess profit share. ”
Hearing this, many people felt as if they had taken a reassurance and felt much more at ease.
The fees are so high that they are on par with the top asset management institutions on Wall Street, so we have to give them some protection.
After waiting for a while, no one asked any more questions.
Xu Liang continued: "Do you have any questions?
If there's no problem, today's product promotion meeting ends here, and then it's entertainment time. ”
No one responded to him, almost everyone had already made their choice in their hearts.
The return rate is more than 5 times in two years, the development speed and trend are comparable to Google and Bing’s Facebook equity, and the guaranteed rate of return is 10%...
Anyone who is not a fool can see that this is an excellent investment opportunity.
It is worth mentioning that the duration of the S Fund is set at ten years.
The investment portfolio is not static and can be adjusted at any time.
For example, you can sell your Facebook shares midway and buy some Tesla and Android shares.
These blue-blood aristocrats have invested so much money in Hanhua and indirectly hold equity interests in many companies. Their family members have become spokespersons for the interests of Hanhua, Facebook and other companies.
At least when formulating relevant plans, when it comes to your own interests, you have to think twice.
No one said anything at all, Xu Liang continued with a smile:
"That's it, have a nice night everyone."
After finishing speaking, Xu Liang walked off the stage.
Blankfein came forward with a smile.
"Xu, what you said is good, the fundraising should be stable."
Unwilling to be outdone, Mai Jinheng gave Xu Liang a thumbs up and said with a smile:
"I'm a little moved by what I said."
Xu Liang smiled faintly:
"If it doesn't violate your internal regulations, you two can also buy some S fund shares."
Blankfein smiled and shook his head: "Xu, thank you for your kindness, but Goldman Sachs is a shareholder of Facebook and a partner of Hanhua. We should try to avoid these sensitive behaviors."
Mack: "Xu, none of this matters. Our cooperative relationship is as solid as stone. JP Morgan will support you as always."
Seeing that the two people refused to offer the benefits, Xu Liang didn't take it seriously. It was just a casual mention, and it didn't matter whether he accepted it or not.
As long as he can continue to bring benefits to the two major investment banks, he will be the strongest partner for the two CEOs.
If Hanhua wants to develop in the United States, the two of them are the most suitable partners.
"Xu, I have a question. Hanhua and Hongyan are not short of money, so why do they want to create an S fund?"
Mai Jinheng said.
Xu Liang: “Actually, it’s nothing, it’s just an escort.
Facebook is growing too fast and too big. It needs more people to serve it.
The same is true for Kunlun Technology. ”
Mak Jinheng felt that he was not telling the truth, but the other party obviously did not want to talk more about this topic. He was also very sensible and did not ask the question to the end.
Xu Liang guessed that the old fox must have guessed something.
After all, Hanhua and Hongyan acquired CDs on a large scale, although they operated through more than a hundred shell companies.
But the two giants are deeply entrenched in global financial markets, especially the United States.
You can definitely detect some clues.
The two stayed for a while, then left Xu Liang to socialize with the blue-blood nobles at a drinking party.
Xu Liang didn't join in the fun. He planned to think calmly for a while and take stock of the gains and losses.
After the Phoenix Fund is established, unlisted companies such as Facebook, Kunlun Technology, Hynix, Global Travel, Manchester United, and the Warriors will be able to exchange part of their equity for cash flow.
With this money, not only can one make a fortune from the subprime mortgage crisis.
You can also take advantage of the crisis to pick up leaks.
At that time, the Xu family in the United States, the Xu family in South Korea, etc. will also be able to ensure the inheritance of family wealth through diversified investments.
Now it seems that although Facebook and Hynix are developing well, society is constantly developing, and prosperity will eventually come to an end.
Taking advantage of the opportunity now, it is only right to diversify your investments like Gates Sr.
In addition, S funds hold equity in these companies and naturally obtain voting rights on the board of directors.
This ensures that while Facebook and Hynix receive cash flow, the company's power will not be lost.
Finally, and the most critical point.
The plan to deal with the subprime mortgage crisis is about to be closed down, and no surprises are allowed at this critical juncture.
As long as all the dividends from the subprime mortgage crisis are absorbed, even if Facebook collapses, it will not have any impact on him.
Moreover, he also plans to use the S Fund to achieve a good rate of return, which will make it easier to raise funds on a large scale in the United States in the future.
Maybe in the future, we can lead this group of blue-blood aristocrats to invest in Chinese chips and support the construction of socialism.
Just imagine, the family of a senior White House employee indirectly holds equity in a Chinese technology company, but the senior employee has to issue orders to suppress these companies, resulting in heavy losses on the family's investment...
This feeling is definitely not pleasant, but it is definitely worth having.
Thinking of this, Xu Liangliang felt a little more hopeful.
The future holds great promise.
(End of chapter)