America's Road to Wealth

At that banquet of the Hilton family, the top executives of the giants.

In fact, they have already made initial arrangements with Abel to subscribe for a share of Smith Capital's first private placement.

At that time, everything was basically settled.

Only then did the Manhattan District Attorney’s Office begin investigating Smith Capital.

This move caused doubts among the capital hyenas with their keen sense of smell.

In the next few days, none of them who had agreed to come came to visit.

But conversely, these capital hyenas have a really keen sense of smell.

Caroline came over that day and told the Manhattan District Attorney's Office to terminate the investigation into Smith Capital.

That night, someone came to find David Mellon.

After David consulted Abel, he met with the managers of Mellon Bank at the Smith Capital headquarters the next day.

Mellon Bank is also called Mellon Financial Corporation.

Yes, David’s ancestor was the founder and owner of this bank.

However, hundreds of years later, although David and his family still have some shares in Mellon Financial Company.

But only a little.

Mellon Financial Group and David Mellon can only be said to have some connections.

But it is this origin that allowed Mellon Financial to reach cooperation with Smith Capital the fastest.

Subscribed a certain share of private equity funds.

Then Goldman Sachs, Lehman and other companies also came one after another, before Charlie Scharf came today.

Smith Capital’s share of the first private placement is not much left.

If Merrill Lynch wasn't a giant, and Abel wanted to get something from Merrill Lynch next.

Merrill Lynch doesn't even have this 500 million share, because there are really many people who want it.

After all, there is not much else in New York, but there are really many rich people.

Abel, the Wolf of Wall Street, has been certified by newspapers such as the New York Times and the Wall Street Post before.

This time it was "certified" again by the Manhattan District Attorney's Office.

There are too many local wealthy people who want to try to subscribe for a small share.

To be on the safe side, they won’t buy too much.

But it's just like when Peter Lynch and Buffett first emerged.

With considerable profits.

Even if they have to take some risks, the rich are willing to give it a try.

So under the split, a private placement of $3 billion.

Already fully subscribed.

Merrill Lynch can get up to 500 million. This is because Abel wants to get some resources from Merrill Lynch.

Only then would so much share be left for the transaction with Merrill Lynch.

After hearing Abel's words, Charlie Schar cursed "FXXK" in his heart.

In fact, he also wanted to come early.

But Merrill Lynch still has concerns.

After dispelling this lingering concern, Charlie Scharf came to the door.

But it's already a bit late.

Over the past few years, Merrill Lynch has become increasingly conservative.

Annual reports are half dead every year, and occasionally even fall.

In parallel time and space, Merrill Lynch finally failed to survive the 2008 subprime mortgage crisis.

It's just that Merrill Lynch's assets are good, and Bank of America has come out to take over.

Unlike Lehman, who seeks death too much.

Really died in the end.

Charlie Scharf no longer hesitated and said decisively: "No problem. Where are the contract details?"

"Pa~"

Abel snapped his fingers, and David, who had been waiting with a smile next to him, immediately brought a stack of documents to Charlie Scharf.

"It's all over here, sir." David smiled.

"Thanks."

Charlie Scharf quickly took it and started flipping through it quickly.

Charlie Scharf inspected it carefully and found that the front was generally in order.

The subsequent subscription fees and management fees are also quite satisfactory.

For example, the subscription fee is 1%, which means that a one-time subscription fee of 1% must be paid, which is charged outside the price.

That is, if you subscribe for 1 million and the subscription rate is 1%, you need to remit 1.01 million funds.

Redemption fees are also normal. The 2% figure is simply low by Wall Street standards.

These are pretty normal.

What’s outrageous is the management fees.

Normally, management fees are generally around 2.5%-5% of the entrusted funds paid annually.

As for Smith Capital’s private placement, the contract did not require management fees at all.

That’s right, not even 0.1%.

but

The key is the bonus commission fee at the end.

This value is very high.

Dividend commission fee means that before dividends are distributed, a certain amount of profit needs to be withdrawn as performance compensation to the manager.

This fee is only withdrawn during the period of bonus redemption or bonus reinvestment, and is divided into three forms.

Withdraw a certain percentage of profits based on the project,

According to a certain proportion of all profits of the entrusted funds,

Withdraw a certain proportion of the excess profits beyond the income provided to investors.

This ratio is generally around 10%-40%.

10% is very low, so it’s very little.

40% is very high, so the same is very small.

But Abel's contract requires that the proportion of bonus withdrawal fees be as high as 50%.

This is a bit ridiculously high.

But that's not outrageous enough. What's outrageous is that Charlie Scharf also saw it.

For this private placement, the closing period in the contract was actually only 180 days.

For money managers, the longer the closed period, the better.

The closing period of most private equity funds is almost five years or more.

For longer ones, there are even ten, fifteen or twenty years.

Even if it is short, it is usually more than three years.

The 180-day closing period is simply unheard of in normal fundraising of large funds.

At the end, Charlie Scharf swallowed and his throat moved.

He organized his words, looked at Abel who looked relaxed, and spoke softly:

"Sir, this contract is a bit too extreme."

"The most extreme thing is the exaggerated bonus commission fee and the 180-day closing period that is very unfavorable to you."

"you"

Before Charlie Scharf could finish speaking, he was interrupted by Abel.

He said to David Mellon: "David, tell Mr. Scharf. What is the floating profit of Smith Capital from March to now."

"Forehead"

Here we go again, David thought.

But this set is really useful.

David smiled and said: "The total is 3.645 billion U.S. dollars, sir."

"Then what was our principal before this?"

"It's $390 million."

"Great, thank you David."

"You're welcome."

After finishing the double act, Abel looked at Charlie Scharf again.

“Sir, I am confident that within this one hundred and eighty days.

Make a lot of profits for you guys. So this 50% remuneration is the remuneration I deserve. "

“And I also believe that after this 180-day short-term private placement ends.

You will think that giving me 60% of the bonus is worth it. "

"So that's why I don't want management fees, but the bonus commission fee is 50%, and the closing period is only 180 days."

“Because after 180 days, this private placement will end.

But when Smith Capital held its second private placement, the conditions became different again. "

"Now, do you understand, sir?"