In Hong Kong, we build a global business empire

Back at the Kang Le Building, Burton, Chen Shulin, and the others had already left, leaving only Ma Shimin and He Shanheng.

At this moment, both of them were in Ma Shimin's office.

On Ma Shimin's desk was a "prey list".

Lin Haoran walked into the office, greeted the two men, and then picked up the "prey list" with great interest.

The list is clear, the objectives are well-defined, and includes a brief overview of the assets, estimated current market value, debt summary, and suggestions on acquisition challenges and priorities.

The Galaxy Strategic Development Committee team is extremely efficient.

His gaze swept over names and projects: XXX Des Voeux Road Central, Central, a Grade A commercial building owned by Wah Cheong Properties, which is on the verge of bankruptcy, and involves complex debts; priority: must be acquired.
The site at XX Harcourt Road, Admiralty, was originally planned to be developed into a Grade A office building. The owner is Nanyang Trust, which suffered a financial crisis due to the Carrie Lam case. Priority: Must acquire.

60% stake in a large commercial complex on Canton Road, Tsim Sha Tsui, held by the core asset of the Jia Nian Group, which is on the verge of bankruptcy; priority: must acquire.
The entire old office building on Gloucester Road in Wan Chai has fragmented ownership, but its location is excellent and suitable for acquisition and redevelopment. The owners are multiple small owners. The priority is to wait for the right opportunity to consolidate and acquire it.
29-story commercial building at XX Connaught Road Central, Central, owned by Canning Properties, a core asset of the company, which is on the verge of bankruptcy. Priority: Must acquire...

There were more than forty projects, which made Lin Haoran's heart surge with excitement.

Many of these were the crown jewels of Hong Kong's real estate market for the next two or three decades, but now they are shivering in the cold winds of crisis, waiting for him to "save" them, or more accurately, to "harvest" them.

Moreover, this is only what was discovered in a short period of time. With the assistance of the Governor's Office, even more resources will be waiting for them to acquire.

After glancing at it, Lin Haoran finally put down the "prey list".

"Boss, we watched the entire press conference. We didn't expect these Hong Kong business tycoons to cooperate with us so much!" Ma Shimin said with emotion as Lin Haoran put down the documents.

The press conference at the Governor's House was broadcast live by both TVB and RTV.

Therefore, even if you are in the Kang Le Building, you can still understand the whole process.

Even now, the entire Hong Kong community, without the media outlets involved, is already discussing this significant press conference.

The HK$200 billion investment accounts for a total of HK$183.2 billion, which, while not exactly a sole proprietorship, is nearly so.

As the president of Hongkong Land Group and even the chairman of Galaxy Strategic Development Committee, Simon Murray naturally understood the boss's confidence in Hong Kong's future.

Therefore, unlike other British-owned giants, he was not pessimistic about Hong Kong's future.

On the contrary, he understood the profound scheme behind Lin Haoran's plan.

This investment of 183.2 billion is by no means merely for the empty title of "saving the market," but rather to complete the systematic bottom-fishing and strategic integration of core assets with overwhelming force during the lowest point of Hong Kong's economy and the most chaotic period of asset prices, under the legitimate identity of a "savior."

Under other circumstances, if Lin Haoran's companies dared to openly purchase large amounts of properties in prime locations, they would be labeled as "monopolists" in no time, and pressure from the Governor's Office and public opinion would follow.

British conglomerates will join forces to stop them and will not stand idly by while a Chinese giant swallows up core assets.

But now, the situation is completely different.

He Shanheng could not hide his excitement and emotion, and continued, "Yes, Haoran, now we are 'ordered to save the market,' and we are the 'stabilizing force' for Hong Kong's economy. This identity has given us the best protection."

Those British executives who used to be arrogant and those Chinese business partners who were good at scheming are now either struggling to survive or hesitant and watching. Who would dare or have the ability to point fingers?
This was a once-in-a-lifetime 'golden window of opportunity,' and we anticipated that they wouldn't invest too much. We figured that with so many giants, even if they didn't dare invest too much, raising HK$50 billion should be easy. But to our surprise, they couldn't even raise HK$20 billion!

More than a dozen forces eventually pooled together HK$16.8 billion.

“They didn’t even reach the bottom line we initially estimated.” Ma Shimin shook his head, his tone tinged with disdain. “This is the limit of their courage and vision.”

However, this is actually a good thing for us. The less they contribute, the stronger our control, and the less resistance there will be to the fund's future operations.

Lin Haoran laughed and said, "It's not that they lack vision, it's that they're too calculating and carrying too heavy a burden."

British investors are thinking of scaling back to protect themselves, and some are even planning to buy back assets when they fall even more drastically.

American capital is purely profit-driven; it will never make a bet before it can clearly see the situation.
As for our Chinese-owned counterparts…

He paused, not continuing, but Ma Shimin and He Shanheng both understood.

Those Chinese business tycoons weren't pessimistic about Hong Kong; they simply had their own difficulties.

Tight cash flow, debt pressure, internal family conflicts, or simply a lack of courage to gamble in such a tumultuous period.

They may have seen an opportunity, but after weighing the options, they chose the safer path of self-preservation.

This is understandable; business decisions are inherently subjective and vary from person to person.

However, historical opportunities often favor only the boldest gamblers.

"The money they save is just enough for us to eat more fat meat. 16.8 billion? Since they only show this much sincerity, then the vast majority of the future returns generated by the fund will naturally have little to do with them."

The promised returns will be distributed strictly according to the proportion of investment, not a penny less, not a penny more.

"By the way, Uncle He, Mr. Ma, I have some preliminary ideas for the future development of the fund company!" Lin Haoran said, looking at his two generals and gesturing for them to sit down.

"Oh? Please speak, boss!" Ma Shimin said immediately.

He Shanheng also looked at Lin Haoran, waiting for what would happen next.

After all, they now have complete control over this fund company.

Even the Governor's Office has already supported the management of the fund company by the Hengsheng Group.

"Have you heard of Pioneer Navigation?" Lin Haoran asked with a smile.

Upon hearing this, Ma Shimin looked puzzled, clearly having never heard of it before.

He Shanheng, however, seemed to be deep in thought.

He continued, "Haoran, you mean that American mutual fund company? I know a little about it. It pioneered the world's first index fund. Although it has only been established for a short time, it has already gained a certain reputation in the United States and even globally."

He Shanheng was, after all, a master in the financial field, and this problem did not stump him.

Lin Haoran smiled and nodded.

Indeed, the future renowned Pioneer was founded in 1974, which means it has only been established for less than eight years.

As a pioneer in the industry, Vanguard is constantly innovating in product design and sales models.

In 1975, Vanguard launched the first index fund in history, the First Index Investment Trust, which was based on the S&P 500 stock price index.

Competition for this fund didn't emerge until ten years after its inception.

Vanguard is not only the pioneer of index funds, but also a leader in low fees. In order to reduce investor costs, Vanguard launched a distribution model that does not pay trailing commissions in 1977!

It was only 1982 then, so Vanguard's development strength was not very strong, far behind top financial giants like Goldman Sachs.

But Lin Haoran knew that in the future, Vanguard would become one of the world's largest mutual fund companies, managing assets worth trillions of dollars.

Basically, it holds shares in most of the world's top-tier companies.

Leaving aside international companies, even within mainland China, Vanguard has a certain shareholding in companies such as Tencent, JD.com, Jinmao, Feihe, Moutai, Midea, China Merchants Bank, and CATL.

Other pioneering companies include BlackRock, State Street, Fidelity, Goldman Sachs, and others.

Their reach extends to almost every corner of the globe, influencing the pulse of the global economy through vast amounts of capital and sophisticated products.

They are not just investment institutions, but also participants in and even rule-makers. They use the logic of capital to redefine value, allocate resources, and even influence national policies and industrial trends.

However, the now-famous BlackRock has not yet been established, so Lin Haoran naturally wouldn't mention it.

Goldman Sachs and Fidelity, on the other hand, are already well-known top-tier fund companies in the United States.

Lin Haoran also placed great hopes on this revival fund that was about to be established.

Although he owns numerous companies with ambitious future goals, the Renaissance Fund is different from his other companies such as Landsea Group and Vanke Group.

The Hong Kong Revival Fund is a financial instrument with a true "political strategy" character, backed by the Hong Kong Governor's Office.

It was born with the mission of "stabilizing the market and reviving the economy," which gives it an unparalleled legitimacy advantage in terms of political correctness and public opinion guidance.

Therefore, Lin Haoran hopes that this Hong Kong Revival Fund will become a top global asset investment management company on par with BlackRock, Vanguard, Fidelity, Goldman Sachs, and others in the future!
This is the only information that can be made public within the companies he controls.

In contrast, he prefers to keep the specific details and assets of his companies, such as Landsea Group, Wanqing Group, and Huanyu Investment Company, hidden.

This means encouraging these companies to develop and make money discreetly in the future.

……

"Boss, what do you mean?" Ma Shimin looked at Lin Haoran, waiting for his explanation.

"The Vanguard model, especially its indexation and low cost, represents an important direction for the future of asset management."

Lin Haoran steered the conversation back on track, continuing to explain: "It tells us how powerful vitality can be created by scale, transparency, low cost, and a high degree of alignment with investor interests."

We should learn from this essence, but apply it to our area of ​​greatest strength: the securitization of physical assets.

He picked up the "prey list" and patted it lightly: "These are our 'S&P 500 constituent stocks.' Once our 200 billion in cash has been converted into fixed assets, what we need to do is not sell buildings one by one like traditional real estate developers, or wait for rent like landlords."

Instead, the goal is to package, segment, and standardize these highest-quality 'component assets,' transforming them into financial products that can be easily traded and flexibly allocated in the market, much like stocks.

He Shanheng had now fully grasped his boss's grand vision.

He continued, following the train of thought: "So, Haoran, your plan is: First, take advantage of the 'Revitalization Fund's' market rescue halo and capital advantage to quickly acquire these core assets and complete the initial accumulation and integration of the underlying assets."

The second step is to learn from the Vanguard model, establish a professional management company to operate these assets in a professional and standardized manner, and design corresponding financial products, such as REITs that you mentioned earlier, or more innovative 'real estate income certificates'.

The third step is to bring these products to market, attract local and even global funds, and form a virtuous cycle of 'asset acquisition - product issuance - capital return - re-acquisition'.

Ultimately, will this platform be developed into a hub for real estate finance in the Asia-Pacific region?

"The summary is spot on, but it misses the most crucial point." Lin Haoran looked at He Shanheng approvingly. As expected of the founder of Heng Sheng Bank, He Shanheng is one of the top Chinese bankers in Hong Kong.

He added, “Ecosystem and rules: once our platform has accumulated enough high-quality assets and funds, we will no longer be just a product provider.”

Our asset valuation methods, rental yield benchmarks, and risk rating systems may become the de facto industry standards.

The size and liquidity of the products we issue will affect the pricing of related assets and even the entire regional market.

We can even create derivative financial instruments based on our asset portfolios to provide the market with risk management and speculative tools.

By then, we will truly have control over pricing and the discourse power in this field.

Ma Shimin seemed to be deep in thought. He was not an expert in the financial industry, but he was a top professional manager in Hong Kong's business community. He had been exposed to many things and had some understanding of them.

But he only had a basic understanding of it; he wasn't a professional.

He Shanheng gasped, for he understood the implications better than Ma Shimin.

Having control over pricing and discourse means being able to influence resource allocation to a certain extent, and even guide the flow of capital.

This goes far beyond the scope of ordinary enterprises and touches the edge of "systemically important financial institutions".

His gaze toward Lin Haoran held not only admiration but also a hint of sternness.

This young boss has lofty ambitions.

"Of course, we have to take it one step at a time."

Lin Haoran changed the subject and continued, "The most crucial and urgent task at present is to turn the 'must-win' projects on this list into our possession as quickly as possible and at the most reasonable cost."

Mr. Ma, as the president of the land company, you are most sensitive to property values; Uncle He, you have extensive connections and are skilled in negotiation and coordination. The two of you will work together to handle the specific execution.

Ma Shimin and He Shanheng both nodded.

At this moment, they admired their young boss even more.

Don't be fooled by the fact that the boss seems to care about nothing most of the time. When it comes to crucial moments, he can always come up with some grand ideas and clear paths that even they hadn't thought of.

This combination of strategic vision and keen understanding of human nature both inspired and deeply impressed them.

"Don't worry, boss, we will definitely live up to your expectations!" Ma Shimin solemnly stated.

He Shanheng nodded vigorously.

Lin Haoran continued, "This revival fund is ultimately regulated by the Governor's Office, so I cannot be too monopolistic. I have already said at the Governor's Office press conference that once the market stabilizes, I will list this revival fund company so that global investors can share the dividends of Hong Kong's recovery."

But before that, we must ensure that the fund's core assets are firmly in our own hands.

This is unavoidable; none of the world's top investment firms and fund companies are not publicly listed.

Sometimes, being a publicly listed company can be more appealing when investing in other countries.

Lin Haoran had considered monopolizing the market, but he also knew it was unrealistic.

Today, the funds he has pledged on behalf of his group account for HK$183.2 billion of the entire HK$200 billion Renaissance Fund, meaning that Lin Haoran effectively controls 91.6% of the fund company's shares.

In the short term, since Hong Kong is currently facing economic difficulties and the Governor's Office needs him, there will be no objections.

But once the market stabilizes, the financial crisis is completely over, the real estate industry gradually stabilizes, the revival fund begins to make profits and its assets double, the Governor's Office and even the major conglomerates in Hong Kong will definitely be envious.

At that time, they will definitely use various means to exert pressure, demand to share more profits, and even question the fund's monopoly.

Therefore, going public is the simplest solution.

On the one hand, going public can fulfill Lin Haoran's public promise at the press conference, demonstrate his integrity and openness, and silence any criticism.

On the other hand, going public is also a form of 'decentralization' and 'sharing'. By offering a portion of shares to the public, the interests of the fund are tied together with a wider range of investors, forming a more solid social foundation.

At the same time, the funds raised from the IPO can be used for a new round of expansion, forming a virtuous cycle.

More importantly, once listed, the fund's valuation and operation will be more transparent, but also more 'market-oriented'.

As long as Lin Haoran can maintain control of the management company and ensure that the fund's investment strategy and asset operation do not deviate from their core objectives, then giving up a portion of the equity will bring broader development space and a more solid 'legitimacy'.

Those who are envious and want to share in the profits can buy stocks on the open market instead of directly interfering in the fund's operations.

In any case, he now controls more than 90% of the shares, and even if he gives up some profits after the listing, he will still retain control.

This is equivalent to pooling the resources of all of Hong Kong to create a super investment company, which can silence everyone.

He stood up, walked to the window, and looked down at the urban jungle of Central: "Acquisition negotiations must be fast, accurate, and ruthless. For those projects that are 'must be acquired,' a premium can be paid appropriately, but it is necessary to ensure that the debts are clear and the property rights are clean."

The Governor's Office will give us the greatest convenience, but we cannot leave any legal flaws.

Mr. Ma, you are responsible for assembling a professional asset appraisal and negotiation team;
Uncle He, you'll be in charge of coordinating communication with major banks, creditors, and small business owners. If necessary, you can utilize all our resources in both the political and business spheres.

"Understood!" they both said in unison.

“In addition,” Lin Haoran turned around, “we must pay attention to our methods during the acquisition process. We are ‘white knights’ here to ‘stabilize the market’ and ‘prevent the disorderly sale of assets.’ We must maintain this image.”

For those original owners or creditors who are truly in need, a certain degree of 'goodwill' can be shown in the price, but the bottom line must be maintained: the price cannot be higher than 60% of the market price at the previous peak!
For those opportunists who try to profit from the chaos, there's no need to be polite; they should be given a good talking-to.

Ma Shimin laughed and said, "Don't worry, boss. This combination of 'soft and hard tactics' is something we're best at."

The entire market now knows that we are the only major buyer with the strength and sincerity to take over; the initiative is in our hands.

He Shanheng added, "I will closely monitor the activities of major creditor banks such as Standard Chartered Bank, UMC Finance, Barclays Bank, and American Chinese Bank. They have a large amount of bad debt collateral on hand, and now is the time when they are most eager to dispose of and liquidate it."

We can negotiate through a fund, as a package deal, to secure the best possible discount.

Lin Haoran looked at his two capable assistants with admiration: "That's right, and the choice of listing location is also very important."

A Hong Kong domestic listing is certain, but in the future, a secondary listing in London, New York, or even Tokyo could be considered to transform the 'Hong Kong Revitalization Fund' into a truly international real estate finance platform.

By then, its influence will extend far beyond Hong Kong.

He walked to the world map, pointed at it, and said, "Hong Kong is our starting point and core, but it is by no means the end. In the future, Singapore, Tokyo, Shanghai, Seoul, Sydney, Los Angeles, London, Paris, New York, Berlin..."

These core global cities all have the opportunity to be included in our asset portfolio. The "Hong Kong Revitalization Fund" can incubate the "Global Revitalization Series," and by drawing on Vanguard's model, we can design indexed products covering different regions and asset classes for global investors to choose from.

He Shanheng was deeply moved, as if he could see the blueprint for another financial empire unfolding before his eyes.

This is absolutely another brilliant strategy from the boss!

He made a name for himself in Shanghai's banking industry in his youth, and later moved to Hong Kong to found Hengsheng. He experienced countless ups and downs, but he had never seen such a grand and meticulous strategic vision.

This is not just about business; it's about a leap in perspective and vision.

Although Ma Shimin is not as proficient in financial details as He Shanheng, he has a deep understanding of asset operation and regional economy.

He added, "Boss, to achieve this goal, we must first lay a solid foundation in Hong Kong. The core assets we acquire this time must not only be of high quality, but also have 'benchmark' significance."

For example, if we acquire that building on Des Voeux Road Central in Central, we must operate it as a benchmark for rental yield and occupancy rate in Hong Kong.

The office building to be developed on that plot of land in Admiralty is intended to become a regional landmark.

Only in this way can our packaged financial products have the strongest persuasiveness and appeal.

Lin Haoran exclaimed in admiration, "Well said! Asset quality is fundamental, and operational capability is the guarantee. Mr. Ma, you need to put more effort into this aspect."

Hongkong Land Group has Hong Kong’s top property management and development team and will fully support the operation of the fund’s assets.

If necessary, elite personnel can be temporarily drawn from Hongkong Land to form a dedicated asset management team to serve the fund.

As for the specific acquisition strategy and bottom line of negotiations, you can handle them flexibly according to the actual situation. I only care about the results.

Use this 200 billion to acquire as many of Hong Kong's most valuable core assets as possible over the next twenty years. (End of Chapter)