America's Road to Fame

Chapter 144

Chapter 144

"First of all, I would like to talk to you about our current private equity fund, Fund No. 3, which is under the charge of Mr. John Paulson. %, so we have plans to continue to absorb investment and expand the size of this fund, so Goldman Sachs may be needed to help introduce it.”

William Chen said first.

"No problem, William, with such a high return, it is easy to find funds, especially under the current background, most of the big funds are losing money, and many funds hope to have a better place to go."

Lloyd Blankfein replied without hesitation: "How much are you going to increase?"

"An increase of 50 billion, how about it, is it possible?"

"It's not a big problem, but I hope you can be clear, William, after the fund scale expands to tens of billions, every operation requires more patience, and the rate of return will decrease with the increase of funds. general situation."

"No problem, I've prepared for it."

"Then I'm relieved, but there is one thing that needs to be understood, that is, the more investors with huge investment, such as the sovereign funds of the oil-producing countries in the Middle East, what they care more about is not how beautiful your historical profits are. , but the stability of your profits. For those investment funds with a scale of tens of billions, stable profits are the most important thing. Under this situation, it can make stable profits every year, even if the annual income is less than 10%.

What Lloyd Blankfein said was indeed reasonable. With the increase in the amount of funds, Chen William also felt that it would become more and more difficult to imagine high-fold profits as before.

When your funds are only tens of millions of dollars, you can consider higher leverage. Ten times leverage is only a few hundred million dollars, and the limit of [-] times leverage is only a few billion dollars. , these are the financial markets can bear.

Therefore, correspondingly, the profit will also be enlarged. Even if the market fluctuations are not large, it is not impossible to achieve several times or even dozens of times the profit under good luck.

It’s just that under the survivor’s bias, everyone will often see those who are highly profitable and more liquidated and bankrupt, but they will not be seen.

But what about when your bankroll exceeds $100 billion?Even with ten times the leverage, it has reached hundreds of billions of dollars. What financial market can bear such a large amount of funds?And how do you ensure that after you add leverage, your huge amount of funds will not become fat in the eyes of others?

You said William Chen has the eyes of the future and can predict the future?But that is the future without his participation. Once he participates with such a huge amount of money, the changes will be very large.

Therefore, at his current level, he no longer chooses leverage by himself, but chooses leverage according to the amount of funds that the market can bear.For example, this market can only bear the entry of [-] billion funds, so his [-] billion funds can only choose ten times leverage at most.

And how many billions of funds dare to choose ten times leverage?Except for lunatics, it is estimated that no one will easily choose high leverage with such a large amount of funds, because at this level, stable profitability is the most important thing.

Just like what Lloyd Blankfein said, the sovereign funds of oil-producing countries with hundreds of billions of dollars can make a stable profit of 10% every year, which is already very satisfying for them.

Therefore, with the increase in the amount of funds, there is a high probability that the profitability of William Chen's No. 3 Fund will decrease.But in the same way, as the amount of funds increases, the share he can get will be higher.

To put it bluntly, this private equity fund originally has two purposes. If you compare the two, and you get the same share, then you can earn too high a profit for others, and earn more satisfying income for more investors. Of these two choices, William Chen would definitely choose the latter.

Because of that, there will be more people who can unite with me, and I can get more help.He is not doing charity, so why must he use 1 million US dollars to earn ten times the income for others?With 100 people's 100 billion US dollars, earn double the income, then 100 people will support him, how to choose, I'm afraid it goes without saying.

As for the sovereign funds of the oil-producing countries in the Middle East mentioned by Lloyd Blankfein, William Chen does not need their funds at present, and it is enough to raise the 50 billion US dollars just among the rich in the United States.

Since it is necessary to unite people with energy, it is natural to give priority to the local forces in the United States, followed by the old European families, and finally those local rich people, because those local rich people can help William Chen in other ways besides money There are not many, so for him, the importance naturally falls to the back row.

Next, Chen William talked about another thing with Lloyd:

"Also, I hope that Goldman Sachs can assist me in my first acquisition."

Hearing this, Lloyd Blankfein's eyes lit up. William Chen said it so carefully, it must not be a small list, so he asked, "Who is the target?"

"Marvel." Chen William said unhurriedly: "I have invested in Marvel before and became one of their shareholders, and now hold 10% of the shares. At that time, the post-investment valuation was 25 billion U.S. dollars Right now, I want to buy out the company entirely.”

Lloyd shook his head and said: "The price of 25 billion US dollars is a bit expensive, but if you buy it now, the price will be more suitable. If you hand it over to Goldman Sachs, we will give you the best price."

"This is also the reason why I hope to cooperate with you this time, Mr. Lloyd, my goal is to get 100% of this company, the lower the price you finally get, the higher your remuneration, so I am looking forward to it Your company's performance."

"Are you very optimistic about Marvel? William, you must know that the current situation of this company is not good."

Faced with this problem, William Chen naturally would not reveal all his cards, so he just said: "I have read the comics of this company since I was a child, and I like the superheroes in it very much, so now that I have the ability, I naturally hope to bring them out. Dilemma, you can understand it as my collection addiction."

After hearing what he said, Lloyd just smiled and was noncommittal. Obviously, he didn't fully believe what William Chen said, but these were not that important to him. The most important thing was being able to make money from this deal .

So he said to William Chen: "You can rest assured that I will send someone to follow up on this acquisition. As far as I know, many shareholders of Marvel are clients of our Goldman Sachs, and their recent financial situation is not very optimistic. , so if the price is right, it’s not that hard to buy the company. The hard part is how do we get it for you at the best price, but that’s what we at Goldman Sachs do.”

"In addition, I also suggest to William that you can use a leveraged buyout, which means that we are responsible for providing most of the funds, so that you don't have to pay all the acquisition costs, you only need to pay the interest on our financing part, which can save more money. funds to invest.”

Lloyd's suggestion moved Chen William a little bit. He also knew that the leveraged buyout was nothing more than that the cooperative bank was responsible for providing most of the funds, which was equivalent to Chen William's loan. The advantage of this was that he could use the least funds to leverage larger acquisitions.

If it was really insufficient funds, William Chen would not choose this acquisition method, because after all, the funds of those banks did not come for nothing, they had to pay interest, and sometimes the interest was not low.

But in the current situation, if the return on his investment is much higher than the interest, it is still very beneficial to him to choose this method.

So he pondered for a moment, then said to Lloyd: "Very good suggestion, Mr. Lloyd, we can discuss the specifics later."

"Okay, I will arrange for someone to follow up on these two things right away. I hope our cooperation this time can still be in order and become the basis for more cooperation between us, William."

"I expected the same."

As the CEO of Goldman Sachs, Lloyd Blankfein has a very busy schedule, so it is not easy to find time to meet William Chen. After confirming the cooperation, the two will leave, and Goldman Sachs will send a special person to come. He was in charge of Chen William's two matters, and more details, he had to finalize with those people.

(End of this chapter)