Chapter 143： Cooperation finalized
"The first thing I want to talk to you about is that our current private equity fund, fund 3, which is headed by Mr. John Paulson, has an initial investment of about $500 million and a current rate of return of more than $400. %, so we have plans to continue to absorb investment and expand the size of this fund, so Goldman Sachs may be needed to help with referrals.”
William Chen said first.
"No problem, William, with such a high return, it is easy to find funds, especially under this background, most large funds are losing money, and many funds hope to have a better place."
Lloyd Blankfein replied without hesitation: "How much are you going to increase?"
"How about an increase of 5 billion, is it possible?"
"It's not a big problem, but I hope you can understand, William, after the scale of the fund expands to tens of billions, every step of the operation requires more patience, and the rate of return will also decrease with the increase of funds. This is general situation."
"No problem, I'm ready."
"Then I'm relieved, but I still need to understand, that is, the more investors who invest a lot, such as those sovereign funds of oil-producing countries in the Middle East, they care more about 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. Compared with the previous record of doubling, they hope to be able to ensure that they do not lose as much as possible. It can make a steady profit every year, even if the annual income is less than 10%.”
What Lloyd Blankfein said also made sense. With the increase in the amount of funds, William Chen also felt that it would be more and more difficult to imagine the high profit as before.
When your capital is only a few hundred tens of millions of dollars, you can consider higher leverage. Ten times leverage is only a few hundred million dollars in capital, which is the limit of 100 times leverage, but it is only a few billion dollars in capital. , these are all financial markets can afford.
Therefore, the profit will be expanded accordingly. Even if the market volatility is not large, it is not impossible to achieve several times or even dozens of times the profit.
It's just that under the survivorship bias, everyone often sees those who are highly profitable and more liquidated and bankrupt, but they will not be seen.
But what if you have more than $10 billion in capital? Even if the leverage is ten times, it has reached hundreds of billions of dollars. What financial market can afford such a large amount of capital? And how do you ensure that after you add leverage, your huge capital will not become fat in the eyes of others?
You said that 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 funds, the changes will be very large.
Therefore, at his current level, he no longer chooses leverage himself, but chooses leverage according to the amount of funds that the market can bear. For example, this market can only withstand the entry of hundreds of billions of funds, so his tens of billions of funds can at most choose ten times the leverage.
And how many tens of billions of funds dare to choose ten times leverage? Except for lunatics, it is estimated that such a large amount of capital will not be used to easily choose high leverage, because at this level, stable profitability is the most important thing.
As Lloyd Blankfein said, those sovereign funds of oil-producing countries with a level of 100 billion can make a steady profit of 10% every year, which is already very satisfying for them.
Therefore, as the amount of funds increases, the profitability of Chen William's No. 3 Fund will decrease, which is a high probability. 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 has two purposes. If you compare the two, and you get a similar share, then you will earn too much profit for others, and more investors will earn profits that satisfy them. Of these two choices, William Chen definitely chose the latter.
Because then, there will be more people who can unite with you, and you will be able to get more help. He's not doing charity work, so why does he have to use 100 million US dollars to make ten times the income for others? With 100 people's 10 billion US dollars, earning double the income, then 100 people will support him, I am afraid I don't need to say more about how to choose.
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, just among the richest Americans, it is enough to raise the 5 billion US dollars.
Since it is necessary to unite people with energy, it is natural to choose the local forces in the United States first, followed by the old European families, and finally those rich people, because those rich people can help Chen William in other aspects besides money. There are not many, so for him, the importance naturally has to be ranked back.
Next, William Chen talked about another matter with Lloyd:
"Also, I want to be able to get Goldman Sachs to help me with 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." William Chen said unhurriedly: "I have invested in Marvel before and became one of their shareholders. Now I hold 10% of the shares. At that time, the post-investment valuation was 2.5 billion US dollars. Left and right, now I want to buy this company outright.”
Lloyd shook his head and said: "The price of $2.5 billion is a bit expensive, but if you buy it now, the price will be more suitable. If you hand it over to Goldman Sachs, it 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 this company 100%. The lower the price you end up getting, the higher your remuneration will be, so I am very Looking forward to your company's performance."
"Are you very optimistic about Marvel? William, you must know that the company's situation is not good now."
Faced with this question, Chen William naturally wouldn't tell all his cards, so he just said: "I have read this company's comics since I was a child, and I like the superheroes in it very much, so now I have the ability, and naturally I hope to bring them out. Dilemma, you can understand it as my collection addiction."
Lloyd listened to what he said, just smiled, noncommittal, obviously did not fully believe what William Chen said, but these are not that important to him, being able to make money from this transaction is the most important thing. .
Therefore, 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 our Goldman Sachs clients, and their recent financial situation is not very optimistic. So if the price is right, it's not that hard to buy this company. It's just how we get it at the best price for you, but that's what we at Goldman Sachs do."
"In addition, I also suggest 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 the full acquisition cost, you only need to pay the interest on the part of our financing, which can save more funds to invest.”
Lloyd's suggestion made Chen William a little moved. 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 amount of money. Funds to leverage larger acquisitions.
If it was really a lack of funds, Chen William would not choose this acquisition method, because after all, the funds from those banks did not come in plainly, and they had to pay interest, and even sometimes the interest was not low.
But in the current situation, if the return on his investment is much higher than the interest, choosing this method is still very beneficial to him.
So he pondered for a moment, and then said to Lloyd: "Very good suggestion, Mr. Lloyd, we can discuss the specifics later."
"Okay, I will arrange a special person to follow up on these two matters. I hope our cooperation this time can still be ordered and become the basis for our more cooperation, William."
"I'm looking forward to that too."
As the CEO of Goldman Sachs, Lloyd Blankfein has a very busy schedule, so it is not easy to take time out to meet William Chen. After confirming these cooperation, the two leave, and Goldman Sachs will send someone to come In charge of these two matters of William Chen, more details will have to be finalized by him and those people.
William Chen said first.
"No problem, William, with such a high return, it is easy to find funds, especially under this background, most large funds are losing money, and many funds hope to have a better place."
Lloyd Blankfein replied without hesitation: "How much are you going to increase?"
"How about an increase of 5 billion, is it possible?"
"It's not a big problem, but I hope you can understand, William, after the scale of the fund expands to tens of billions, every step of the operation requires more patience, and the rate of return will also decrease with the increase of funds. This is general situation."
"No problem, I'm ready."
"Then I'm relieved, but I still need to understand, that is, the more investors who invest a lot, such as those sovereign funds of oil-producing countries in the Middle East, they care more about 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. Compared with the previous record of doubling, they hope to be able to ensure that they do not lose as much as possible. It can make a steady profit every year, even if the annual income is less than 10%.”
What Lloyd Blankfein said also made sense. With the increase in the amount of funds, William Chen also felt that it would be more and more difficult to imagine the high profit as before.
When your capital is only a few hundred tens of millions of dollars, you can consider higher leverage. Ten times leverage is only a few hundred million dollars in capital, which is the limit of 100 times leverage, but it is only a few billion dollars in capital. , these are all financial markets can afford.
Therefore, the profit will be expanded accordingly. Even if the market volatility is not large, it is not impossible to achieve several times or even dozens of times the profit.
It's just that under the survivorship bias, everyone often sees those who are highly profitable and more liquidated and bankrupt, but they will not be seen.
But what if you have more than $10 billion in capital? Even if the leverage is ten times, it has reached hundreds of billions of dollars. What financial market can afford such a large amount of capital? And how do you ensure that after you add leverage, your huge capital will not become fat in the eyes of others?
You said that 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 funds, the changes will be very large.
Therefore, at his current level, he no longer chooses leverage himself, but chooses leverage according to the amount of funds that the market can bear. For example, this market can only withstand the entry of hundreds of billions of funds, so his tens of billions of funds can at most choose ten times the leverage.
And how many tens of billions of funds dare to choose ten times leverage? Except for lunatics, it is estimated that such a large amount of capital will not be used to easily choose high leverage, because at this level, stable profitability is the most important thing.
As Lloyd Blankfein said, those sovereign funds of oil-producing countries with a level of 100 billion can make a steady profit of 10% every year, which is already very satisfying for them.
Therefore, as the amount of funds increases, the profitability of Chen William's No. 3 Fund will decrease, which is a high probability. 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 has two purposes. If you compare the two, and you get a similar share, then you will earn too much profit for others, and more investors will earn profits that satisfy them. Of these two choices, William Chen definitely chose the latter.
Because then, there will be more people who can unite with you, and you will be able to get more help. He's not doing charity work, so why does he have to use 100 million US dollars to make ten times the income for others? With 100 people's 10 billion US dollars, earning double the income, then 100 people will support him, I am afraid I don't need to say more about how to choose.
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, just among the richest Americans, it is enough to raise the 5 billion US dollars.
Since it is necessary to unite people with energy, it is natural to choose the local forces in the United States first, followed by the old European families, and finally those rich people, because those rich people can help Chen William in other aspects besides money. There are not many, so for him, the importance naturally has to be ranked back.
Next, William Chen talked about another matter with Lloyd:
"Also, I want to be able to get Goldman Sachs to help me with 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." William Chen said unhurriedly: "I have invested in Marvel before and became one of their shareholders. Now I hold 10% of the shares. At that time, the post-investment valuation was 2.5 billion US dollars. Left and right, now I want to buy this company outright.”
Lloyd shook his head and said: "The price of $2.5 billion is a bit expensive, but if you buy it now, the price will be more suitable. If you hand it over to Goldman Sachs, it 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 this company 100%. The lower the price you end up getting, the higher your remuneration will be, so I am very Looking forward to your company's performance."
"Are you very optimistic about Marvel? William, you must know that the company's situation is not good now."
Faced with this question, Chen William naturally wouldn't tell all his cards, so he just said: "I have read this company's comics since I was a child, and I like the superheroes in it very much, so now I have the ability, and naturally I hope to bring them out. Dilemma, you can understand it as my collection addiction."
Lloyd listened to what he said, just smiled, noncommittal, obviously did not fully believe what William Chen said, but these are not that important to him, being able to make money from this transaction is the most important thing. .
Therefore, 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 our Goldman Sachs clients, and their recent financial situation is not very optimistic. So if the price is right, it's not that hard to buy this company. It's just how we get it at the best price for you, but that's what we at Goldman Sachs do."
"In addition, I also suggest 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 the full acquisition cost, you only need to pay the interest on the part of our financing, which can save more funds to invest.”
Lloyd's suggestion made Chen William a little moved. 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 amount of money. Funds to leverage larger acquisitions.
If it was really a lack of funds, Chen William would not choose this acquisition method, because after all, the funds from those banks did not come in plainly, and they had to pay interest, and even sometimes the interest was not low.
But in the current situation, if the return on his investment is much higher than the interest, choosing this method is still very beneficial to him.
So he pondered for a moment, and then said to Lloyd: "Very good suggestion, Mr. Lloyd, we can discuss the specifics later."
"Okay, I will arrange a special person to follow up on these two matters. I hope our cooperation this time can still be ordered and become the basis for our more cooperation, William."
"I'm looking forward to that too."
As the CEO of Goldman Sachs, Lloyd Blankfein has a very busy schedule, so it is not easy to take time out to meet William Chen. After confirming these cooperation, the two leave, and Goldman Sachs will send someone to come In charge of these two matters of William Chen, more details will have to be finalized by him and those people.
RECENTLY UPDATES
Urban
Video Games
Action
Fantasy
Action
Action
Action
Action