"Wang Qi, tell Jin Jiajun and Ai Lewen to come in!" Xia Yu instructed Wang Qi.
"Understood, Boss!" Wang Qi nodded in agreement, left the room, and shortly returned with Jin Jiajun and Ai Lewen.
Xia Yu's gaze swept across the three men. He nodded slightly, his eyes settling on the middle-aged man wearing gold-rimmed glasses to Wang Qi's left. "Jin Jiajun, how has the team adjustment been going these past few days?"
The middle-aged man with gold-rimmed glasses was indeed Jin Jiajun. After Xia Yu brought him in, although funding hadn't been secured yet, Xia Yu had already tasked him with preparing for the Huijin No. 1 Fund, providing him with many capable subordinates to help him quickly get acclimated. This way, once the funds were in place, operations could smoothly begin.
Jin Jiajun responded earnestly, "Boss, our team is composed of highly capable individuals. We've quickly adapted, and we should have no issues before the official launch of the fund."
"Very good!" Xia Yu nodded in satisfaction and then looked past Wang Qi, focusing on the other middle-aged man responsible for preparing the Huizhong No. 1 Fund, Ai Lewen. He was a plain-looking, small-framed man, but his face was full of confidence.
"And you, Ai Lewen?" Xia Yu asked again.
"Boss, we're also nearly done with adjustments. We'll be ready before the fund launches, ensuring smooth operations." Ai Lewen quickly glanced at Jin Jiajun, then respectfully answered Xia Yu.
Xia Yu noticed Ai Lewen's brief glance and found it amusing. It seemed Ai Lewen, despite his small stature, was highly competitive, which was a good thing. He also saw Jin Jiajun stand up straighter with a confident smile, while Wang Qi, standing between them, looked somewhat tense.
This atmosphere pleased Xia Yu. Internal competition would push employees to work harder, and the company would develop more rapidly. For Xia Yu, this was an ideal situation. Although Wang Qi might feel more pressure in the coming days, Xia Yu chose to overlook it, hoping Wang Qi would grow even faster under their pressure.
"Very well, the company will soon host a reception. This event is to announce our arrival in Hong Kong and simultaneously raise funds for the Huizhong and Huijin Funds."
Upon hearing this, Wang Qi, Jin Jiajun, and Ai Lewen were all visibly excited, with Jin Jiajun and Ai Lewen showing particular delight.
"I plan to host the reception at The Peninsula Hotel. Wang Qi, you'll oversee the event's planning. Tomorrow, the company will officially announce the reception, where we'll begin raising funds."
"Also, send invitations to all the major families and tycoons in Hong Kong, regardless of whether they attend. Don't forget political and police officials either, and even send one to the Governor. We must be courteous; whether they come or not is their business!" Xia Yu instructed Wang Qi seriously.
"Understood!" Wang Qi responded, his eyes flashing with joy as he straightened up and spoke loudly.
Xia Yu nodded in satisfaction, then turned his gaze to Jin Jiajun and Ai Lewen.
"Jin Jiajun, Ai Lewen."
"Present!" The two men stood up straight and responded.
"At the reception, I will introduce you both as the heads of the two funds. You'll likely need to interact with many wealthy and influential people, so be prepared and don't make any mistakes!" Xia Yu advised.
"Yes!" "Understood!" Jin Jiajun and Ai Lewen responded loudly, their expressions serious.
Xia Yu nodded in satisfaction again, then took out three printed documents from his drawer and handed them to Jin Jiajun, Ai Lewen, and Wang Qi, who quickly accepted them.
"Read these first!"
The three of them quickly went through the documents since they weren't long. After reading, they looked at Xia Yu with surprise, confusion, and astonishment in their eyes.
"If you have any questions, feel free to ask!" Xia Yu said with a smile.
"Boss, the promised annual compound rate is at least 10%, which is 2% higher than the usual 8% for most funds. Won't the tiered profit-sharing conditions seem a bit harsh?" Ai Lewen quickly asked, though he chose his words carefully.
Jin Jiajun and Wang Qi also looked at Xia Yu, awaiting his response, as they were equally concerned about this issue.
Now, a brief explanation of the fund's investment profit distribution is necessary.
Generally, there are two modes of profit distribution for funds: **capital priority return** and **project distribution**.
In the capital priority return mode, the fund doesn't distribute profits based on individual projects but instead calculates all projects' profits as a whole.
In the project distribution mode, the fund is divided into several projects, with profits and losses calculated separately.
For investors, the capital priority return mode carries less risk and is more secure, though it doesn't promise high returns. Its advantage lies in its stability.
The project distribution mode carries more risk but potentially offers higher profits.
Xia Yu chose the capital priority return mode, which is more favorable to investors.
As for the investment return, most funds typically promise a minimum return rate of 8%, especially in the U.S. Xia Yu, however, promised a 10% return rate.
This means that if the investment return falls below this rate, Jiuding Securities will only collect basic fund management fees and other basic expenses, without receiving any profit-sharing, even if the fund makes money. If the return rate is lower than the promised rate, Jiuding Securities won't earn a cent in profit-sharing.
So, this minimum return rate benefits the investors but disadvantages Jiuding Securities, which explains Ai Lewen's confusion and increased pressure.
However, Xia Yu wouldn't let himself lose out; he planned to make up for this in other areas, specifically through the tiered profit-sharing model that Ai Lewen questioned.
Typically, in a profit-sharing model, profits (after deducting fund management fees) are distributed 20% to the fund management company and 80% to the investors, who share the remaining 80%.
However, the profit-sharing model Xia Yu proposed for the Huijin No. 1 and Huizhong No. 1 Funds was more stringent—a tiered model.
- **For investment returns below 20%, Jiuding Securities receives 20% of the profits.**
- **For returns between 21% and 30%, Jiuding Securities receives 25% of the profits.**
- **For returns between 31% and 40%, Jiuding Securities receives 30% of the profits.**
- **For returns between 41% and 50%, Jiuding Securities receives 35% of the profits.**
...
- **For returns exceeding 70%, Jiuding Securities receives 50% of the profits.**
Beyond this, the profit-sharing rate remains at 50%, regardless of how much the return rate increases.
This tiered profit-sharing model is more demanding on investors, reducing their profits.
Ai Lewen was concerned that this tiered profit-sharing clause might upset investors and complicate fundraising efforts.
For example, if the Huizhong Fund, which Ai Lewen was set to manage, had a capital of 100 million, and the investment return rate reached 70%, the profit would be 70 million. A 50% profit-sharing rate would result in 35 million.
However, under the standard 20% profit-sharing model, Jiuding Securities would only receive 14 million. The difference is 21 million, meaning the investors would receive 21 million less, which might make them unhappy.
But Xia Yu saw this as a minor issue. He smirked and said, "The current market situation means we don't need to worry about fundraising; we're selecting investors. It's a seller's market, and we have the upper hand. They can invest or not. Without the tiered profit-sharing model, why would I raise the minimum return rate from 8% to 10%?"
"Other funds don't dare to set such terms because they lack confidence. Achieving a 20% return rate is already impressive. Currently, in Hong Kong, 90% of fund return rates are below 15%, with at least 50% below 10%. Very few funds can achieve a 20% return rate, so how could they dare set a tiered profit-sharing model?"
"Other funds may lack confidence in maintaining high returns, but I am confident in keeping a high return rate. So, in a situation where fundraising isn't a concern, why should we adopt the same profit-sharing model as other funds? That would put us at a disadvantage!"
"Furthermore, these high-tier profit-sharing rates come with conditions—only when the investment return rate reaches a certain level do the corresponding clauses take effect. If our investment return rate isn't that high, these clauses naturally become meaningless!"
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End of Chapter.