My Age of Investment

  Chapter 931 Target Top Ten Hedge Funds in the World

   "Ten billion dollars... hedge fund of funds?" Xia Jingxing asked.

  Abel nodded, "Yes, because our last fund of funds has reached a scale of 3 billion US dollars. Considering the performance bonus factor, the new fund raises tens of billions of dollars. There is still a great hope for success."

  Xia Jingxing chuckled, "Okay, let's not consider the difficulty of fundraising first, have you ever thought about raising tens of billions of dollars in funds, whom to invest in?"

The veteran Jiang Ping nodded gently and echoed: "Yes, as soon as this subprime mortgage hunt is ended, the 8 horse funds will be liquidated immediately. By then, there will not be so many sub-funds for us to choose. Seriously If you care about it, the significance of the establishment of a fund of funds is to isolate information and risks."

Xia Jingxing nodded slightly, and Jiang Ping was right. The fund of funds is actually a kind of fund of investment funds. The mode of operation is just like when the fund chooses the investment target, it selects excellent fund managers, namely the sub-fund GP, and let the GP work for the fund of funds. Make money.

  CIC can actually be regarded as a fund of funds, and Vision Capital is their selected sub-fund GP.

  LP transfers the money to the fund of funds for management, the fund of funds reinvests in the sub-fund, and the sub-fund reinvests in the specific target.

  Compared with direct investment in sub-funds, LP investment in funds of funds has one more link, and also an additional layer of fees.

Of course, the fee of the fund of funds is lower than that of the sub-funds. The annual management fee is generally 1%-2%. Some institutions even offer an ultra-low management fee rate of five thousandths for soliciting business. Normally, the income share is 10%-20%, but there are also 5% of this situation.

  The specific rate that can be charged depends on the ability of the fund of funds, more precisely, the past performance.

  At the same time, because the sub-fund also has a 2+20 fee standard, and the two are superimposed, there is not much left in the hands of the investment fund of funds LP.

  Generally speaking, powerful and experienced institutions and wealthy groups will choose to invest directly in sub-funds.

   More strength, directly set up a family office, manage the money by yourself, directly invest in a certain startup company, or directly invest in the secondary market without any funds.

  Those who really invest in funds of funds are rich people who lack investment experience and don’t have much money in their hands.

  Like Sequoia and Gao Ling Capital, even if a wealthy person with ordinary strength and no special resources comes to the door with 10 million, people may just ignore it and advise you to invest in a fund of funds to indirectly invest in them.

  On the one hand, the store is bullying customers, and on the other hand, the scale of funds is too small, which is troublesome to connect.

However, the fund of funds aggregates 10 million of countless LPs and turns into billions or tens of billions. After they talk to Sequoia and Gao Ling, they will have the bargaining power. Institutions and institutions will negotiate one-on-one, which is more convenient and trouble-free. .

   Funds of funds in China are generally established by third-party wealth companies and trust companies, earning some intermediary fees, and their investment levels are not satisfactory, and they specialize in the middle class and the small wealthy class.

  Don’t look at the venture capital institutions that often promote an IPO to create a return of tens of times or hundreds of times, but if you carefully open it, there are all powerful LPs, such as foreign university funds, pension funds, and some domestic large entrepreneurs.

  Little rich people simply cannot get involved with this top-level project resource. Even if they are lucky enough, they will still be punished by the fund of funds.

  The only possibility to make a lot of money is to invest in emerging venture capital institutions. These institutions have been established for a short time and have not proven themselves, so they cannot raise capital and are not picky.

   But investing in these new institutions, the greater probability is that the pants will not be lost.

  Vision Capital actually established fewer funds of funds, and the purpose of establishment was either to confuse the outside world or to double fees.

  The Daxue No. 1 hedge fund of funds, like the US$3 billion in subprime mortgages, is like this.

  The several funds of funds set up before are all invested by themselves. Since there are no extra LPs, they are not afraid of tricks.

  Daxue No.1 is different. It has accepted multiple LP investments including Gates’ family office waterfall investment. The operation must be standardized, otherwise it is easy to be sued by the LP.

  At present, Xia Jingxing does not intend to vigorously develop in the field of funds of funds, because if you want to formalize operations, you must look for excellent fund managers to invest.

  Then the problem is that there are very few GPs that are better than Vision Capital in this market.

  This has entered a dead end. If you want to develop a fund of funds, you have to find excellent peers to establish cooperation, and the return rate of peers is much lower than that of the hedge funds under Envision Capital.

   Even if you bite the bullet and invest in these peers, the rate of return of the fund of funds may not be very attractive, which will lead to the lack of confidence to increase management fees and revenue sharing.

  In addition to increasing the total scale of asset management and bluffing others, it can actually not create much value.

  If it weren't for the need to keep a low profile because of the subprime mortgage crisis, Xia Jingxing didn't want to toss on the fund of funds too much. For Vision Capital, which is in the current stage of development, it would be a bit of a burden.

After listening to Xia Jingxing’s explanation, Abel was very surprised, and still persisted in persuading, “Boss, that’s 10 billion U.S. dollars! Even if the management fee is a little lower, 1% is also 100 million U.S. dollars, if you count it. Revenue sharing, this figure can reach hundreds of millions of dollars, and it is every year."

  Xia Jingxing shook his head and laughed: "I know this is the wealth code of a large asset management institution, and it relies on the scale of asset management to earn annual management fees.

  Isn’t Blackstone’s prospectus clearly stated that the annual management fee income is higher than the income share. "

   Liu Hai smiled and inserted a sentence: “So they went public, because the growth of corporate value has reached a bottleneck. The old method is not so easy to use, and new leeks can be harvested through the open market.”

  Xia Jingxing smiled and nodded, and then said to Abel: “The tens of billions of dollars of hedge fund of funds is too big. How many GPs should we need to manage this money? Twenty? Fifty?

  This is a huge amount of work. Seriously speaking, we don’t seem to have real experience in the management and operation of hedge funds of funds.

  I managed 10 billion U.S. dollars when it came up, and the stalls were too big.

  What should I do if I choose some sub-funds that are not so reliable to cooperate and suffer heavy losses? Then our sign will be smashed, and the upward momentum will be interrupted.

  News reports will not say how much the Envision Capital Fund of Funds has lost, or say it as it was, but people will only remember that Envision Capital fell a lot, and the level does not seem to be very good, and then affects other funds. "

  Speaking of this, Xia Jingxing sighed, “In the short term, you can make money, but in the long term, the gains outweigh the losses.

  My usual advice is not to touch unfamiliar areas, even if you do, you have to be cautious.

  10 billion U.S. dollars, it’s really too much, and we can’t manage it right now.

  And now that the next mortgage crisis has erupted, Wall Street is wailing, and countless hedge funds have pulled back and liquidated, which is not a good time to shoot. "

  Listening to Xia Jingxing's explanation so much, Abel also knows that this time he's flattering himself.

  I thought that the boss would like huge funds, the rapidly expanding scale of asset management, and the continuous inflow of management fees...

  But the result was not what he thought. The boss was calm and terrible, and he was not dazzled by the current results.

  Xia Jingxing is of course very clear-headed. If you look deeper, hedging fund of funds is not impossible, but it must be done step by step, and most institutions will only start to consider "the quantity of funds to make up for quality" after the growth of their main business lines is weak.

  Vision Capital’s main fund is far from weak in growth.

  Overview of the development of Vision Capital in the past few years, their private equity funds of funds have invested in a total of Gao Ling an external GP, and hedge funds of funds have invested in a Claire Capital.

  Except for Paulson, the investment time was after the establishment of the Daxue No.1 Fund, which was equivalent to Xia Jingxing's own money to invest.

  As long as you think about it carefully, you will know that Envision Capital is currently unable to play in this field, so how could Xia Jingxing make the mistake of making great achievements.

  If you want to play in this field, what abilities do you need? Need to have the vision to select the best dozens of hedge funds from the thousands or tens of thousands of hedge funds in the market.

  Xia Jingxing thinks this is much more difficult than investing in subprime mortgages, or investing in Amazon, Google, and Netflix in the long-term, and the uncertainty is too great.

  The operation is fierce, and when the record is negative, the reputation of the accumulated performance is completely ruined.

  So, he is sober-minded, he can't easily listen to Abel's words and decide to go fast.

Abel seemed to want to make up for the impression points he had just lost, and suddenly realized: "Boss, I thought about it again, and I think you are too right. The $10 billion hedge fund of funds is indeed a bit blind. Then we cut it to 500 million. U.S. dollars, how about using it to exercise the team?"

After hearing this, Liu Hai and Jiang Ping gave Abel a glance. This position has changed too quickly, right?

   But then again, they are all so familiar, they know that Abel is such a person.

  Xia Jingxing began to ponder. He didn't look down on the fund of funds at all. After all, the legs of mosquitoes were meat, but he was worried that he would not be able to grasp it at the moment.

  If you step by step and cultivate a capable fund of funds team, and all the members are eye-catching, then he will not worry about managing massive amounts of funds.

  The plan proposed by Abel is actually an attempt, so bravely take the first step.

After not thinking about it for too long, Xia Jingxing said, "Well, then raise a 500 million US dollar hedge fund of funds. This time it will be real, and operate like a real fund of funds. It is not allowed to invest in our fund of funds. Funds cannot invest in Paulson Funds and Claire Capital.

  Get out of your comfort zone and look for good fund managers outside. "

  Abel nodded, remembering that, knowing that the boss is really concerned about the development of the fund of funds this time.

Xia Jingxing glanced at the three of them, and then said: "This year, the Lixia No. 1 Fund was liquidated, but two new funds were also raised, and two are still being raised. One is overturned and redesigned. The total asset management scale is up to 5.5 billion. Dollar.

  If you count the US$1.6 billion Xiaoman No.1 and the US$3 billion Daxue No.1, by next year, the scale of Vision Capital's hedge fund business should exceed the US$10 billion mark. "

   Liu Hai smiled and said, “You don’t have to wait until next year. Now you have exceeded the 10 billion dollar mark.

  Dylan, you forgot, the initial capital of the US$3 billion that Daxue No.1 shorted the subprime loan has almost turned into US$10 billion. "

  Xia Jingxing smiled, "Yes, I almost forgot about it."

Liu Hai seemed to know what Xia Jingxing wanted to say, and said: “As long as the scale of asset management is doubled on the current basis, Envision Capital will be among the top ten hedge funds in the world, reaching the level of Renaissance and Soros Fund. The same level."

Hearing this, even Jiang Ping, who was relatively indifferent, couldn’t help showing a smile. If he really achieved this brilliant achievement, then he, as one of the founders, would have realized his ambition for many years. Wall Street's turbulent life adds a rich and colorful achievement.

  The smile on Abel’s face is very bright. Although the tens of billions of funds of funds plan has been ruined, it seems that it will not have any impact on the strong rise of Envision Capital.

  "Becoming among the world's top ten hedge funds is our next important development goal. Only when this step is achieved can we truly claim a place in this giant Wall Street."

  Xia Jingxing encouraged, “Throughout the product line of Envision Capital, hedge funds are our fastest-growing and best department, and they are also the pioneers and cornerstones of the entire group.

  Now we, the closer we are to success, the more we can’t take it lightly!

  Everyone will work hard for a while, and when all the investment arrangements for subprime loans are finished, I will host a celebration banquet for everyone.

  In addition, I decided to take out 10% of the profits generated by the company from the hedge fund business department separately as a bonus pool, and then everyone will be rewarded for their merits! The original bonus will still be issued and will not be included in this award. "

  Abel’s eyes lit up. After deducting the LP principal and dividends, how much profit can a few hedge funds create for the company?

  He estimated that there must be at least two or three billion dollars, right? The prize pool is at least two to three billion dollars.

  Moreover, the fund manager also has another income share in charge of the fund!

  The two are superimposed, and the income of fund managers may reach hundreds of millions of dollars.

   Thinking of this, Abel looked at the two generals Jiang Ping and Liu Hai enviously at the front line. As a logistician, he certainly couldn't get as many as two, but he could still think about it for ten or twenty million dollars?

   Liu Hai and Jiang Ping looked at each other, then looked at Xia Jingxing, nodded together and said: "Dalun, we and the team will go all out!"

   "I'm going all out!" Abel waved his fist. He didn't forget to express his position at this critical moment. Right now, he strives to add a good impression in front of the boss. In the future, maybe he will get more bonuses.

   "Okay, let's not say anything extra. The goal is already clear. Everyone, guard against arrogance and rashness, and keep working hard!"

  In response to Xia Jingxing's gaze, the three nodded heavily.

  (End of this chapter)