novelno Chapter 231 The Development of the Financial Industry
Chapter 231 The Development of the Financial Industry
Chapter 231 The Development of the Financial Industry
At the headquarters of Ernst Asset Management in Queens, Ernst sat on a sofa, his gaze fixed intently on Jane Fraser, who was giving a presentation across from him.
Not far away, Jennifer Connelly held a cup of coffee, seemingly nonchalant, but her eyes were fixed on him as if equipped with a precision tracking device.
The glint in her eyes was like a hungry wolf eyeing a plump lamb, or a stock market investor spotting a stock that had hit its daily limit for several consecutive days; she made no attempt to hide the gleam in her beautiful eyes.
Sure enough, men, no matter how gentle or serious they are normally, can instantly become incredibly charming when money is involved.
Especially someone like Ernst, a tycoon who controls the market and can stir up storms, exudes an irresistible attraction that women can't take their eyes off.
"Things are a bit complicated with the hedge funds," Jane Fraser's voice interrupted Jennifer's thoughts and drew Ernst's attention even closer.
"The Asian financial crisis is far more serious than we previously estimated. Some international speculative capital has already begun to quietly enter the South Korean market, and some of our company's funds have also been mixed in."
At this point, Jane Fraser's voice lowered even further. "However, we haven't made a large investment; the current estimated investment is around four hundred million US dollars."
Four hundred million dollars? Upon hearing this number, Ernst's fingers paused for a moment, then a barely perceptible smile appeared on his lips.
With $400 million and the leverage effect, Ernst Asset Management could potentially leverage at least $4 billion, and that's a very conservative estimate. If managed properly, that figure could multiply several times over.
Ernst could understand why Jane Fraser was so hesitant and cautious; South Korea was different from other Southeast Asian countries.
The financial systems of other Southeast Asian countries are as fragile as paper, easily torn apart, but South Korea is a developed country with a well-developed financial system and a much stronger economic foundation than those countries.
Let alone Jane Fraser, even the financial giants of Wall Street and those astute international speculators have to think twice when they talk about the South Korean market; they all have a certain degree of apprehension.
After all, no one wants to fail in a seemingly strong market. Apart from those hotheads who were blinded by their victory in the previous Southeast Asian financial crisis and thought they could sweep the global financial market, no legitimate financial institution dares to go all in on the South Korean market.
Looking back now, it was no different from throwing money into a fire pit; you might even end up getting yourself killed.
But Ernst knew very well that South Korea was one of the key targets of this financial crisis.
No one would have imagined that this country, which had just joined the ranks of developed countries and whose economy seemed to be thriving on the surface, would have a financial industry that was as fragile as a piece of candy that could be crushed at the slightest touch. It was not only inferior to European and American countries, but even to Thailand, which had collapsed earlier.
Even though he knew perfectly well what was going on, Ernst had no intention of interfering with Jane Fraser's decision.
The financial market is not a casino; you can't make money solely based on black swan events, nor can you make decisions based on the boss's personal preferences.
All judgments and decisions must rely on the analysis and operation of professionals like Jane Fraser.
If he interfered too much, it would not only disrupt their rhythm but also easily lead to an inflated ego. A single careless mistake or wrong decision could bring the company to its knees, a risk Ernst didn't want to take.
"And the profits?" Ernst changed the subject, this was the question he cared about most.
Investing money is not the goal; making money is the ultimate objective.
Jane Fraser's caution vanished instantly, replaced by an undisguised smile.
She straightened her back and her tone became much lighter. "The overall revenue from hedging is currently around $13 billion, but this is only temporary and will need to be adjusted according to market changes."
Although it was said to be temporary, the figure of $13 billion still made the atmosphere in the office much more relaxed.
However, this money does not belong to Ernst and Ernst Asset Management Group. Most of the profits actually belong to the investors. Regardless of investment gains or losses, the company can steadily collect various management fees and service fees.
"What's the situation on the private equity side?" Ernst took a sip of coffee, recalling the HVAC system that the private equity department had mentioned before.
Industry layout.
"I remember they said they were going to focus on the HVAC industry. How's that going?"
Jane Fraser was prepared. She rummaged through a thick stack of documents she had brought for a moment, pulled out a neatly bound report, and handed it to Ernst.
"Ralph's progress is very fast. Starting with New York State, he has already integrated Connecticut, New York State, and..."
The company has invested a total of $1.27 million in HVAC-related businesses across five states: New Jersey, Pennsylvania, and Delaware.
"Ralph's idea is to first digest the business in these five states and temporarily halt the pace of expansion. Once the business integration is complete, we will start looking into going public and then use the funds raised to continue expansion."
"The first step is to take over the 14 states on the East Coast, then move into the West Coast, and finally penetrate into the Midwest."
Ernst quickly flipped through the report, and the more he read, the more he felt that Ralph's move was brilliant.
Ralph's expansion was already quite rapid. If it were someone else who was more eager for quick success, they might have started raising funds and expanding as soon as they integrated the New York State business, trying to use market funds to quickly seize market share.
But Ralph didn't do that. He was clearly very optimistic about the HVAC market and was afraid that if things dragged on, other investors would react and rush in to grab a share of the pie.
Ernst knew that it was only a matter of time before other capital entered the HVAC market. After all, no one would stand by and watch Ernst Asset Management monopolize such a lucrative opportunity.
But Ralph's approach undoubtedly allows for greater asset appreciation because the initial scale is large enough.
"Besides the HVAC project, Ralph has recently set his sights on a new area: investment immigration," Jane Fraser continued, her tone tinged with excitement, clearly indicating that she also saw it as a good opportunity.
"EB-5?" Ernst put down the report, raised an eyebrow, and spoke with a hint of understanding.
In his view, the EB-5 investment immigration program is indeed a good business.
EB-5 is an investment immigration law introduced in the United States in 1990. The rules are simple and straightforward: as long as you are willing to invest $500,000 in the United States and create more than ten jobs through this investment, then congratulations, you can get a U.S. green card and realize your dream of immigration through a roundabout route.
Why is this a good business? Because none of those who can afford to immigrate through investment are poor.
What is immigration?
If I study abroad and then stay to work locally, can I apply for a green card after a certain period of time?
Or you could come to the US to work and get a green card once you meet the required years of service?
This is nothing! Most people who think this way end up becoming undocumented immigrants, struggling at the bottom of American society.
In the United States, whether you apply for a green card through employment or by recruiting talent, you can theoretically submit an application within one to two years.
But theory is one thing, in practice, the queues can be so long you'll question your existence.
Getting a green card in three to five years is considered fast; under normal circumstances, the waiting time can even drag on for eight to ten years.
How can you guarantee that your company won't go bankrupt during this period? How can you guarantee that you can always find a job that meets the application requirements? If there is any mishap, such as company bankruptcy, unemployment, or policy changes, you may become an undocumented person and end up as a homeless person at the bottom of the American ladder, living by doing odd jobs and scavenging.
True immigration is always about money, that is, investment immigration.
I have money, I invest, and I can get a credit card quickly, without queuing or having to deal with other people's attitudes, and live a heavenly life in America.
This is the right way to approach immigration.
Thinking that a penniless person can live a life of paradise in America? Well, welcome to hell.
However, investment immigration is not without its thresholds and risks. The biggest questions are: what to invest in and how to invest?
The United States has specific requirements for investment immigration projects, which are basically divided into three categories.
The first category is cities with high unemployment. Simply put, you can't invest in big cities like New York or Los Angeles. You have to go to cities with sluggish economies and high unemployment rates to help solve local employment problems through investment.
The second category is rural projects, such as building a resort or farm in a remote village and hiring local workers.
The third category is infrastructure projects, which involve investing money in infrastructure construction projects such as highways, bridges, and airports.
For truly wealthy people, it doesn't matter what they invest in, as long as they can get a green card, they don't care if they lose all $500,000.
After all, this amount of money might not even be enough for them to buy a luxury car.
However, most people who want to immigrate to the United States through investment do not have such a strong financial foundation. Their total assets may only be a few million US dollars. Even half a million US dollars is a considerable amount for them, so they naturally do not want to waste it.
As a result, private immigration funds came into being.
Simply put, it means that investors entrust their money to private equity firms, which then pool large amounts of capital, conduct professional research and screening of suitable investment projects, and then invest them in a concentrated manner.
This reduces the risk for individual investors while increasing the success rate of investments.
If investors invest on their own, they will likely face one of two outcomes.
Either the investment project resulted in total loss, or it failed to meet the requirement of creating jobs, and not only did the green card not come through, but the money was also wasted.
Either you barely manage to get a green card, but the projects you invest in don't make any money at all. It's like you bought a green card for $500,000 but have no money left. In the end, you have to find a job again, and you might even end up washing dishes or doing manual labor.
However, private immigration funds are different. Their professional teams conduct rigorous screening and risk assessments of projects, which not only helps investors get their cards quickly, but also ensures that they make a profit on their investments as much as possible.
Of course, there are pitfalls here. For example, some investors may make money from their investments, but they cannot prove the legal source of their investment funds. In that case, sorry, they can't take away a single penny of the money, and they can forget about getting a green card.
Regardless of the circumstances, as the United States has become the world's only superpower, more and more people want to immigrate to the United States, whether for reasons of education, healthcare, or asset allocation, and the market demand for investment immigration is growing.
The success rate of obtaining a visa through investment immigration funds is over 90%, which is why more and more people are willing to entrust their money to these funds.
"That's right, it's EB-5." Jane Fraser nodded and said with certainty, "Although the number of private equity investment immigration funds in the United States is increasing like crazy, the market is far from saturated. We believe this is a huge blue ocean with great potential, and it is worth investing in."
Seeing Ernst nod in agreement, Jane Fraser pulled out another report from the pile of documents. "Finally, there's the asset management business. Currently, our main business is concentrated in Southeast Asia."
"Although the Southeast Asian market was left in ruins after international speculative capital withdrew, we also saw opportunities and have invested in many local companies, mainly in infrastructure and people's livelihood sectors."
This strategy was very correct. The financial crisis led to a sharp decline in consumption levels in Southeast Asian countries, and many companies faced the risk of bankruptcy due to broken cash flow.
Given the current technological level and industrial base of Southeast Asian countries, governments seeking to stimulate economic recovery are unlikely to achieve significant progress in the field of science and technology.
Scientific and technological research and development requires long-term investment and accumulation; it cannot be effective overnight.
Therefore, infrastructure construction in the infrastructure sector and people's livelihood sectors, such as hydropower and ports, is the key to driving economic recovery.
It can not only stimulate market activity and improve the living conditions of local residents, but also drive the development of related industries, create a large number of jobs, and stabilize the overall economy.