My absurd experiences in North America over the years

When Max returned to Oaktree Capital’s Los Angeles headquarters, it was already Friday evening.

Instead of going straight home, he had his driver park the car in front of an office building on Santa Monica Boulevard.

Only a few members of the core team remained on the entire floor, waiting for him. Among them were Richard, the chief investment officer in charge of the Forum project, senior analyst Chen Weilun, and his assistant Anna.

The meeting room was somewhat noisy. Several worn-out documents about the restructuring of the Forum Newspaper were spread out on the long table, next to a laptop computer with an electronic version of Li Fu's 47-page report on the screen.

Max sat down, and without any further pleasantries, simply recounted the events of the meeting.

He spoke calmly, without any emotion, as if stating a fact that had already been established. But it was precisely this calmness that made the people present realize that he had seriously considered the deal.

"Tell me your thoughts first," Max said, leaning back in his chair. "Don't worry about mine for now."

Richard spoke first, his tone carrying the typical rigor of an investment banker. "I've reviewed Li Fu's offer. If we sell half of the position at a 130% premium according to Option One, Oaktree can achieve an annualized return of approximately 35% on this project. If we sell all the equity at a 120% premium according to Option Two, the return would be around 20% to 25%. Both options represent normal exit levels in the current market environment."

In theory, they could accept it; they had already discussed it before Max returned.

“However, if we do that, we won’t be able to maximize our profits,” Richard paused, as if choosing his words carefully, “If we continue to push for the split, the return on the sale of the Cubs and Food Network’s core assets could be much higher, conservatively estimated at around 40%…”

This figure is accurate, and it could be even higher if the buyer is very wealthy.

The appeal of Li Fu's offer lies in its certainty, but the price of that certainty may be the sacrifice of some potential gains.

"So I think..." Richard expressed his opinion, "If we continue to drag things out at the shareholders' meeting, Forrest Capital might be more eager to close the deal than we are."

Chen Weilun, a senior analyst, immediately nodded in agreement, "Li Fu wants the Forum to survive intact; that's his core demand. If we continue to delay, he might make more concessions on the price."

At that time, they will not only be able to increase their profits further, but they may also be able to obtain more attractive terms.

He believed that Li Fu would not want to delay any longer so that the Forum News could resume operations as soon as possible, and that the longer it was delayed, the more the Forum News would fall into the abyss.

Max didn't respond immediately. He had heard this suggestion far too many times. Whenever negotiations reached a stalemate, someone would always advise, "Wait a little longer, the other side will make the first concession."

This strategy is effective in some situations, but at this juncture, he needs more complete information to determine where the other party's bottom line and patience lie. If things fall apart, no one will benefit.

He turned to his assistant, Anna, and asked, "What's your opinion?"

Anna projected her laptop screen onto the main screen in the conference room, cleared her throat, and said, "I've done some research on Li Fu's situation, mainly regarding the joint fund he's currently operating. According to incomplete statistics, the joint fund between Forrest Capital and CP Group has only been established for four months, but according to some inside information, it has already generated billions of dollars in unrealized profits..."

A brief silence fell over the meeting room.

This speed is truly astonishing.

But what does the return on the joint fund have to do with the topics discussed at this meeting?

Everyone looked at Anna.

"The total size of the joint fund is one billion US dollars. As the fund manager, his income mainly comes from performance-based fees and dividends from his own capital," Anna continued methodically. "He only spent 300 million on the Tribune project. For him, the worst-case scenario is that our two sides continue to stalemate, causing his equity stake to fail to reach the expected value. However, this has no impact on Forrest Capital at all."

She listed some of Forrest Capital's overseas investments, almost all of which have entered a period of rapid development.

Tribune is probably his worst investment.

The attendees looked at the figures and couldn't help but exchange bewildered glances. They were only focused on maximizing profits, but they had overlooked the most fundamental thing.

Anna took a deep breath and turned to the next page. "What follows may make you uncomfortable, but that's the reality. Unlike Forrest Capital, our Oaktree's exposure to this project is completely different. The Tribune is our most important restructuring project this year. If the breakup plan is delayed or the restructuring process is prolonged, the time cost will continue to erode our book value."

Dragging it out will only be more disadvantageous for them, making it difficult to achieve their annual economic goals.

She pulled up another document on her computer and continued, "In addition, I've gathered some industry opinions about Li Fu, from JPMorgan Chase CEO Jamie Dimon to former Treasury Secretary Rubin, to News Corporation's Rupert Murdoch and New York City Mayor Michael Bloomberg, almost everyone speaks highly of him..."

Damon believed that Li Fu was exceptionally courageous; decisions that others dared not make were effortless for him.

Rubin commented that Li Fu's vision was very unique.

Bloomberg praised Li Fu and the CP for their extraordinary courage and wisdom in pulling New York out of the abyss of the economic crisis.

Anna's report was very detailed, even listing gossip media discussions about Li Fu's Eastern background and precognitive abilities. She believed that although these claims had no substantial basis, many people in the industry did indeed think so.

Max tapped his fingers lightly twice on the table.

He originally thought that Li Fu was just a rising star on Wall Street who had suddenly emerged and might fall at any time.

Over the years, he has seen more than one young man like this: making ten times his initial investment in a year, only to be wiped out and forced to leave the market in two years, becoming just another short-lived legend in the market's turbulent waves.

But the information Anna provided made him realize that this young man's situation was different.

The other party is building a cross-sector, multifaceted reputation, from the financial sector to the media, from the business world to the political sphere. His network of trust is constantly expanding and strengthening, and the scope of his investments is so diverse that even the most senior experts are surprised.

After Anna finished speaking, there was a silence of about half a minute.

"I was originally inclined to sell all the shares. A profit of 20% to 25% in just over six months would have been substantial enough for us," Max finally said. "Splitting the assets could indeed have yielded higher returns, but there would be incalculable litigation risks and time costs involved."

There was one thing he didn't say, and more importantly, if they chose to confront Li Fu head-on, Li Fu was unlikely to back down as Richard had suggested.

The two sides could even become irreconcilable enemies as a result.

Max stood up and looked out the window. The Santa Monica skyline was completely shrouded in the dark twilight. "I think we should try a different approach: sell half of the shares and keep the other half."

Richard paused for a moment, "Keep half? Then we'll still have risk exposure on this project."

In theory, they originally had only two options: continue to insist on the asset splitting plan, or sell all the equity to Forrest Capital at a premium of 120%.

Retaining half is not Oaktree Capital's style; they simply don't have a positive outlook on the future of the Forum.