dkrc Chapter 377 Issuing New Funds
Chapter 377 Issuing New Funds
Ling Yun stood up, walked to the window, turned around, leaned against the windowsill, and looked at Li Ziyu. "What you said is all correct, but there is one problem."
Li Ziyu looked at him and asked, "What's the problem?"
Ling Yun said, "The scale was great. The last round was 120 million, which made it very flexible. Hong Kong stocks, US stocks, foreign exchange—we could go wherever we wanted, enter and exit whenever we wanted. But if we were to raise 3 or 4 billion this round, it would be a different story. With more money, the ship gets bigger, and it's slower to turn around. If you spot an opportunity and want to enter, the commotion is too big, and the market will follow suit. If you want to exit, you can't; if you try to sell even a little, the stock price will drop. That's why Buffett can only buy large-cap stocks and not small-cap stocks. It's not that he doesn't want to buy them, it's that once he buys them, he can't get out."
Li Ziyu paused for a moment, thought for a moment, and said, "Then let's raise less and not take on so many."
Lingyun asked him, "How are you going to explain things to those banks? They're lining up to give you money, and you're saying you don't want it? You want this one, but not that one? Isn't that going to offend people?"
Li Ziyu said, "Just say the quota is limited, first come, first served. Give a share to each bank, everyone gets a little, so no one gets offended. ICBC wants 200 million, give them 50 million. CCB wants 1.5 billion, give them 30 million. Leave a portion for existing investors. This way the total amount is controlled within 1 billion, and the operation is still flexible."
Ling Yun shook his head. "That's not appropriate. What investor ever complains about having too much capital?"
Upon hearing this, Li Ziyu's eyes lit up. "What are your thoughts?"
"We'll issue three funds: one for US stocks, one for private equity to invest in domestic internet companies, and one for private equity to invest in domestic semiconductor-related companies," Ling Yun casually suggested.
Li Ziyu questioned, "Then they will definitely choose to invest in US stock funds. They probably won't invest in domestic corporate funds."
"It's a seller's market now, we call the shots. We'll invest in all three funds equally, we won't accept investing in just one. We can't just make money and not support the country's development, especially in the semiconductor industry. It's a multi-trillion-dollar industry. As a major country, how can we give up this market to others? Making money is one thing, the key is that this stuff is vital."
Ling Yun walked back to the table and sat down. He looked at Li Ziyu and asked, "Do you have enough manpower on your side?"
Li Ziyu said, "It's not enough. Last time there were only a few people, but this time we need to expand, so the team needs to grow. I've calculated that we need to hire at least a dozen more people. Analysts, traders, risk control, operations—we need to have them all. We also need to hire a few people who understand US stocks, Hong Kong stocks, and semiconductors. Last time you led us, you told us where to go and we did it. This time the scale is bigger, we can't rely on you alone. We need a team to help you with research, monitor the data, and run the trades."
Lingyun asked him, "How long does it take to build a team?"
Li Ziyu said, "About a month and a half. We'll have everyone recruited by the end of the month, and after a month of adjustment, we can officially start operating. You provide the strategy, they execute it. You set the direction, they do the work. You make the judgments, they handle the operations. We don't need to recruit any top-notch new employees, just above-average ones will do. They don't need to have too much experience or skill level. Anyway, we have a small team, and these few will act as the core members, leading a small group to cooperate with you."
Ling Yun nodded, picked up his teacup, took a sip, turned to look at Li Ziyu, and said, "The new fund can be started, but a few things need to be changed."
Li Ziyu took out a pen, opened the back of the folder, and waited.
Ling Yun said, "First, the size of each fund should be controlled at around one billion, not exceeding 1.5 billion. As for the banks, each bank will provide a quota of no more than 150 million. Priority will be given to existing investors; those who joined in the previous round will receive a larger quota. New investors will receive a smaller quota. Allocation will be based on contribution, not on relationships."
Li Ziyu wrote it down and said, "Okay."
Ling Yun said, "Secondly, we need to adjust our investment direction. In the last round, we went long, buying low and selling high. This round is different. The market's downward trend is becoming increasingly obvious, so this time we're mainly shorting. For domestic internet and semiconductor companies, we'll mainly look for companies with foreign counterparts to conduct research. For example, if there are successful companies in this industry and with this business model abroad, we can research domestic companies in the same industry with similar models. This saves a lot of research work, is more efficient, and can also improve accuracy. The current economic environment is not good, and many domestic technology companies are also very short of money."
Li Ziyu thought for a moment, nodded, and wrote it down. "Hmm, that makes sense. This strategy is good. Finding benchmark companies can prove that the direction is correct. As long as the company itself is sound, the probability of success will be much higher. What about the third one?"
Ling Yun said, "Third, the fee structure needs to be changed. Last time, we charged management fees and performance-based commissions. This time, we're eliminating management fees and only charging performance-based commissions. When the market is bad, investors put money in because they trust you. If you make money, you give them a larger share, and they won't complain. If you don't make money, you charge less, and they'll be happy. This industry relies on trust, not contracts. Contracts can control people, but they can't control hearts. If hearts wander, people wander. If people wander, money wanders."
Li Ziyu wrote it down again. He closed the folder and clipped the pen to the clip on the cover. He leaned back in his chair and let out a long sigh. He said, "I've been thinking about these things of yours for half a year and couldn't figure them out. As soon as you explained them, everything became clear."
Ling Yun said, "It's not that you can't understand, it's that you've been soaking in it every day and you've become dizzy from it. I'm standing outside and I can see things clearly."
Li Ziyu stood up, put the folder into his briefcase, and zipped it up. He stood in front of the table, looked at Ling Yun, and said, "So, the new fund is settled then?"
Ling Yun said, "It's settled. Go and make the preparations. Don't delay, build the team as soon as possible and start operating. You handle the money. Respond to the banks as needed. Notify the existing investors as needed. The quota is limited, first come, first served. There is no limit to the share of the semiconductor investment fund among the three funds. You can tell the investors that as long as they trust me, holding the semiconductor investment long-term will yield a hundredfold or a thousandfold return."
Li Ziyu nodded, picked up his briefcase and walked to the door. He put his hand on the doorknob, glanced back at Ling Yun, and couldn't help but ask, "Can semiconductor investment really be this profitable?"
Ling Yun nodded solemnly, "This is a plan that requires at least 20 years. As long as you have confidence and hold on for 20 years, a hundredfold return is just the beginning, and a thousandfold return is not difficult at all."
Li Ziyu pursed his lips. "Then I'll have to throw a lot more."