Chapter 1046 Rapidly growing CDS
Like the Magic City office, the Pengcheng office also has business departments such as securities, insurance, trust, financial leasing, and wealth management.
However, the operations and finance of these business departments are directly under the jurisdiction of the headquarters and are not reflected in the accounts of the Pengcheng office.
Xu Liang simply asked a few questions and left it alone.
We walked around the various floors of Pengcheng office and left.
...
Dong dong...
There was a knock on the door.
“Come in.”
Wearing a small lapel women’s suit, blue pencil pants and black high heels, Liang Yingyu, with short ear-length hair, opened the door and walked in.
"The big boss is gone?"
Liang Si nodded.
“Just left.”
“Did you say anything?”
“The performance of our Pengcheng office in the first half of the year was not bad.”
"Really?"
"Does my expression look like I'm lying to you?"
"Huh, that's good, that's good. Fund No. 2 did not perform well, and I thought I I want to eat Gualao." Liang Yingyu breathed a sigh of relief.
“The performance of Fund No. 2 is already very good.”
Liang Yingyu smiled bitterly: “The return rate of the group’s 37 global venture capital funds is the third from the bottom. Is this still good?”
On the internal website of Hanhua Company, the revenue of all its venture capital funds and private equity funds will be ranked every six months.
It is both a spur and an encouragement.
It is also an internal elimination mechanism.
If you rank at the bottom three times in a row and the average annual return is less than 10%, you will be eliminated.
If the annual return is less than 10% for two consecutive years, you will also be eliminated.
The headquarters decentralized management power but strengthened supervision power.
“Fund No. 2 suddenly increased its fundraising from 200 million to 800 million U.S. dollars. It was too late to expand investment channels, which resulted in a decline in revenue. This is normal.
Recruit a few more An experienced analyst will be fine.”
Liang Yingyu nodded.
"Why don't you lend me your Li You, and I'll return it to you after one year when I have all the people here."
Liang Si is the president of Hanhua Pengcheng Office, responsible for the management of the venture capital department, private equity, and entrepreneurial incubators. He also directly oversees the No. 1 venture capital fund.
"You're late."
"What do you mean? Zhao Donglai got there first?"
Liang Si shook his head.
“The big boss asked me to establish two more venture capital funds on the existing basis. I am going to let Li You independently establish the No. 7 venture fund with the projects he has invested in before.”
< br>
"Are you willing to give it up?"
"Of course not, he is the senior analyst with the highest investment return of Fund No. 1. However, the group also has regulations that the investment return rate of senior analysts will not drop significantly within three years.
He is now in his third year of being independently responsible for a venture capital fund.
Even if I stop him. At most, it won’t be until the end of the year.
Now that the big boss has spoken, I can no longer stop him. "
Liang Yingyu nodded.
"Where is Fund No. 8? Who are you going to hand it over to? ”
“Currently we don’t have suitable ones in our office, and the talents trained by other offices will not be given to us, so we can only find solutions from outside.” ”
It has been six years since the Hanhua Pengcheng office was established. Although it has recruited many graduates from top universities at home and abroad, it can range from ordinary employees to junior analysts, to mid-level analysts, to senior analysts. This is how teachers and partners grow up.
There are currently only three.
One is Zhao Donglai, the head of the No. 3 venture capital fund in Pengcheng Office.
One is Du Yu, the head of the No. 5 private equity fund in Pengcheng Office.
The third one is Li You.
“You have someone chosen?”
"Not yet." Liang Si turned around, "What about you, do you have a suitable candidate?"
"I have a few classmates on Wall Street. I will send you the information when the time comes, you can take a look. "
"Yes. "
——
After talking about the business, Xu Liang went back to Xiangjiang without stopping in Pengcheng.
Come to No. 33 Baijia Road, where the headquarters of Hongyan Xiangjiang is located.
Since its establishment until now, Hongyan’s headquarters has been in this villa.
In the global financial community, especially Xiangjiang, it has become synonymous with ‘mystery’.
Everyone is curious about how the brain of Xu's corporate empire works.
It is a pity that Hongyan is not listed on the market, and there are nearly a hundred bodyguards from Red Shield Security guarding it closely.
It's hard to get in unless you're invited.
“Mr. Xu.”
Xia Changsheng came forward.
Nodding slightly, he went to Xu Liang’s own office on the top floor.
First, I looked at the company's accounts.
In addition to equity investment, it also controls nine companies.
The funds on the account have fallen from US$77.175 billion at the peak to US$60.2 billion now.
Among them, the acquisition of Kunlun Technology cost 17.9 billion Chinese dollars, the acquisition of the New Dream Real Estate project cost 16 billion Chinese dollars, the acquisition of 52.74% of Supor's equity cost 3.2 billion Chinese dollars, and an additional 2 billion Chinese dollars were subsequently invested. currency. In terms of income, the only income was 300 million Chinese coins from the sale of Jinling No. 2 Machine Tool.
As for the sold Nanfu Battery and Zhongyan Holdings, they became the assets of Fengshou and Denong, not Hongyan’s cash.
After deducting the $5 billion in expenses.
Hongyan is also long in oil, iron ore, and gold. It has invested US$10.9 billion so far, and the leverage is only 3.5 times, which is not very high.
In addition to risk considerations.
The most important thing is that the financing cost is too high.
The Federal Reserve has continuously raised interest rates, raising the federal funds rate to 5.24%, and the interest rate for ordinary commercial loans has exceeded 8.
With Hongyan's credit, although it can obtain low-interest loans, high leverage is not affordable at all when chasing long-term long positions.
The remaining nearly 2 billion US dollars are basically used to pay insurance.
From 2005 to now, the total amount of CDS bonds purchased by Hongyan through various channels has exceeded US$70 billion.
Especially after entering 2006, the investment banks that cannibalize others persuaded the major insurance companies to take over, selling more and more CDS bonds, and Hongyan's purchase speed suddenly increased.
The amount of insurance premiums paid continues to hit new highs.
If the current pace continues until the end of the year, the total amount of CDS bonds held by Hongyan will exceed US$100 billion. When the subprime mortgage crisis breaks out, it will exceed US$150 billion.
Xu Liang did not go through the details of each CDS asset package.
“Have you ever investigated the structural distribution of all CDS bonds?”
Xia Changsheng nodded, “CDS bonds targeting corporate bonds of European and American financial institutions accounted for 44%, and those targeting U.S. real estate subordinated bonds accounted for 44%. CDS bonds account for 32%, subprime debt for U.S. auto loans accounts for 11%, student loans for U.S. college students account for 9%, and the remaining CDS loans, including personal consumption loans and personal business loans, account for 4%.”< br>
Xu Liang: "Well done. Our CDS bond structure must be diversified. Don't focus on one company, otherwise you will lose even if you make money."
From ancient times to the present, asking for money has not been an easy task.
This is true between people.
The same is true between companies.
In the future, it will not be easy to get money from these insurance companies if they pay big losses.
“Yes.”
"How many shells were used?"
"27."
Xu Liang nodded.
The shells owned by Hongyan Company are not simply leather companies, but investment companies that are truly registered and operated.
They are distributed all over the world.
Some are registered by Hongyan itself, and some are acquired by existing small investment companies.
False and false, true and false.
Moreover, there are empty shell companies behind these real shell companies, nested layer by layer. Unless it is a long-term investigation, it is impossible to figure out how huge the red rock tentacles lurking underground are.
Of course, such a complex financial structure requires a lot of time, experience and money.
But Hongyan does not lack these.
Putting down the information, Xu Liang stood up.
“Go for a walk on the roof?”
“Okay.”
No. 33 Barker Road is an old building that has been built for more than 30 years. There are five floors above ground, excluding the surrounding gardens, with a total built-up area of 15,000 square meters.
Originally it was a high-end apartment rented out by Hysan Properties, the Hong Kong real estate giant.
In 2001, Xiangjiang Real Estate fell into a low ebb.
Hysan Industrial is for sale to raise funds to cope with the real estate crisis.
Xu Liang bought it for HK$300 million.
During the renovation, the 1st to 4th floors were used as Hongyan’s office space, and the 3,000 square meters on the fifth floor were used as Xu Liang’s private apartment.
The top floor is a 3000 square meter garden.
It is also a place for company employees to relax and rest.
After the Tianbi Gao side was built, Xu Liang rarely came to the fifth floor.
Convert part of it into an office area, and the remaining swimming pool and other areas are open to Hongyan’s employees.
Come to the top of the building.
The three thousand square meters area is divided into several different areas.
At the end is a basketball court covered by barbed wire, taking up about one-fifth of the area.
There are four fifths left, one divided into two.
Half of it is covered by tempered glass and will become a greenhouse in winter.
The remaining two fifths are filled with various potted peonies, roses, daisies, and orchids, trying to ensure that there are flowers in every season.
The east corner is a tea bar.
Employees at Red Rock can make themselves a cup of coffee or tea, sit on a bench in the garden and relax, or overlook the scenery of Victoria Bay.
However, many departments like to hold small meetings in this pleasant place.
“Want something to drink?”
“No.”
Xu Liang didn’t force it, and the two of them walked slowly along the path in the rooftop garden.
"Have you read the three-year development plan of Torch Group?"
"Yes."
As a wholly-owned enterprise held by Hongyan, Torch Group naturally has the right to see this report.
“What are your thoughts?”
“The ambition is grand and the plan is reasonable. If it can be realized, Torch Group will become one of the few domestic industrial giants with revenue exceeding 100 billion.”
(End of this chapter)