Several foreigners present couldn't help but become curious after hearing this. John Brain said: "Mr. Lu, is there any way to solve the risk of long-term uncertainty?"
Hearing this, Lu Ming said in an orderly manner: "It's very simple. You just need to develop such a financial derivatives instrument. That is to package the money you invested in me into a secondary securities product, and you can give an estimate yourself."
I don’t care how much you give, it’s your business, and then if you trade in the securities market, the potential risks will be transferred to the capital market.”
John Braine and others were stunned when they heard this, saying, "Hey guys, it's just like the subprime mortgages of the past. Why does this method sound so familiar, but it's not the same as the subprime mortgages of the past."
This method, to put it simply, is that, for example, Goldman Sachs allocates 10 billion US dollars of funds to Tiansheng Capital for management, and the lock-in period is 15 years according to the agreement.
For such a long period of time, there are great uncertainties that bring unpredictable potential risks. So is there a way to make money and resolve this risk at the same time?
The answer is yes, re-securitize this investment.
So Goldman Sachs packaged the investment and gave it a valuation, then securitized it into N shares and put them into the capital market, and everyone came to speculate. Originally, the high entry threshold of Tiansheng Capital LP prevented most people from entering, even if it was a few thousand
People worth hundreds of millions are not qualified to come in.
After such a spectacular operation by Goldman Sachs, not only people worth tens of millions can buy it, but even ordinary people have the opportunity to indirectly become Tiansheng's LP. For example, this derivative product launched by Goldman Sachs only costs 10 US dollars to buy one share.
Of course, you can also buy it. People with more money can buy more shares, and people with less money can buy fewer shares, and they can be traded at any time.
It's just like buying stocks.
In this way, it is equivalent to concentrating ordinary people's scattered funds and loose money. It is equivalent to crowdfunding 10 billion US dollars, and then using the identity of Goldman Sachs Capital's agent to find Tiansheng Capital with this 10 billion US dollars.
Give the money to Lu Ming to manage, and then they will bet together in another basket how much the $10 billion can rise in the future.
For Tiansheng Capital, how they speculate is their business. Tiansheng Capital took over the 10 billion US dollars and locked it for 15 years. After expiration, it took the commission and completed the liquidation, along with the capital and profits, to Goldman Sachs.
As for who the money was finally distributed to, and which institutions had nothing to do with Tiansheng Capital.
At this moment, after John Braine and others heard Lu Ming's suggestion, they were stunned for a moment, and when they reacted, their eyes were all shining with golden light.
"Mr. Lu, I have to say that your idea is both bold and addictive!" Brian, who came back to his senses, couldn't help but exclaimed in amazement.
Several foreigners already thought that they had genius ideas. They were already good at playing financial derivatives. After Lu Ming said this, they realized in a minute that packaging and securitization could bring huge profits.
Once securitized, it means that you can overdraw the future in advance, because packaged securitization itself contains leverage.
Why is it possible to advance the future?
This is easy to understand. After securitization, it flows into the capital market. Let's take a look at how much money the US$10 billion can earn in 15 years. Investor A thinks it can earn US$20 billion, but the market currently values it at only US$10 billion.
Investor A thought that the price would double in the future, so he quickly spent $100,000 to buy its securities and hold them.
Unexpectedly, in the last two years, I actually made 30 billion U.S. dollars. The price of the securities in my hand skyrocketed. The securities I bought for 100,000 U.S. dollars now have increased to 400,000, which has tripled.
At this time, investor A was not greedy, so he sold the securities in his hand. It happened that investor B believed that the price could rise to 50 billion US dollars in the future and was willing to take the deal, so he bought it from investor A for US$400,000.
securities and hold...
Isn't this exactly the same as stock trading? Isn't it no different from stock trading? That's why it's called re-securitization.
For Goldman Sachs, the $10 billion handed over to Lu Ming has not brought investment income yet. However, by packaging it and securitizing it, Goldman Sachs can increase the asset price as long as the market speculates it, for example, to 5 times or 10 times.
, Goldman Sachs can sell it in advance, make money and walk away.
As for whether Lu Ming can bring 5 times or 10 times profits to the US$10 billion in the end, only the investors who bought the securities are concerned, and Goldman Sachs has already held the profits in its hands and passed the risk to other investors in the capital market.
Even if there was a thunderstorm, in the end Lu Ming not only failed to make any money, but also lost US$5 billion. The market had already reached a market value of US$100 billion, and it was the receivers who paid the bill.
At this moment, John Braine and others were very excited because they realized that the idea Lu Ming gave them was completely profitable. The worst situation was that no one in the market would buy the derivative securities, but this did not prevent them from doing so.
There is huge room for manipulation in this investment. If Lu Ming makes money in the future, he will not lose a penny less.
But as long as someone in the market recognizes the purchase of this derivative security and speculates on the valuation several times, then Goldman Sachs can sell it in advance and let others take over, passing on the risk, and Goldman Sachs not only withdraws funds and profits.
If Goldman Sachs were more ruthless and bolder, and entrusted the withdrawn funds, such as US$15 billion, to Tiansheng Capital Management as an LP, and then securitized it and put it in the capital market... crazy matryoshka dolls.
Is this leverage multiplier superimposed to such an extent that it’s so exciting?
As for how many times the leverage is stacked inside, only the devil knows, because only they themselves know whether other buyers' funds are also leveraged.
But no matter what, it was someone else's order anyway, and it was more important for me, Goldman Sachs, to make money and run away than anything else.
"Mr. Lu, Goldman Sachs originally planned to entrust your organization with US$1.5 billion for management, but I think it is too little. Please give me a moment and I will call the headquarters to discuss it." John Brain said.
There is absolutely no way to make fun out of 1.5 billion U.S. dollars. It must be doubled, it must be super-doubled, otherwise we will be sorry for this wave of outrageous operations.
"No problem, feel free to do whatever you want!"
Lu Ming smiled and nodded, no problem, the more money, the better. The idea he proposed was that LPs would engage in securitization themselves, which is equivalent to opening a new gambling table and attracting a new group of gamblers to bet together.
How much money can Tiansheng Capital earn in the future?
Tiansheng is completely unaffected.
Not only did John Bryan of Goldman Sachs call the headquarters, Carlyle Group and Morgan Stanley also offered to use the bathroom to call and talk to the headquarters.
In about twenty minutes, John Brain and others ended their temporary contact with their headquarters, and at the same time received the latest arrangements.
"Mr. Lu, Goldman Sachs Group has decided to entrust US$4.5 billion in funds to your institution for management." John Brain said.
"No problem at all." Lu Ming said with a smile, and immediately looked at the other two institutions.
"Carlyle also offered $4.5 billion!"
"Same as Morgan Stanley, $4.5 billion!"
The heads sent by the two major institutions have also stated that the total of the three institutions is 13.5 billion U.S. dollars, which is approximately 92.6 billion yuan excluding exchange rate changes.
"Then...sign the agreement?" Lu Ming was not procrastinating.
John Braine and others couldn't wait to sign the contract and were busy going back to design this derivatives security.
The contract was signed at lightning speed, and both parties shook hands happily. The funds will be transferred to the account of Tiansheng QDIE Fund in the next half month. As for Lu Ming, he wants to use the money to bring back domestic investment.
Whether Big A invests in other capital markets is up to him.
However, when investing in the domestic stock market, due to the nature of foreign capital, the amount of funds entering the stock market is limited. To enter Big A, you also need to invest funds from north.
Lu Ming does not plan to enter the domestic capital market, but to make excess returns in the global market.
Because only by making excess returns can Goldman Sachs Group securitize the packaged financial derivatives, will someone be willing to take over, and then the funds can be withdrawn quickly, and maybe another sum of money can be given to Tiansheng Capital with a larger amount.
Of course, Tiansheng Capital will be able to obtain more entrusted funds. Anyway, no matter how Goldman Sachs plays, it is also transferring risks to investors in the North American capital market. They can be as crazy as they like.
After several foreigners left with satisfaction with the contracts, Su Xiaoman, who was also almost invisible at the scene, finally spoke proactively. She looked at the contract in her hand and said blankly: "Finance can still be played like this? I have improved my knowledge today.
