My Age of Investment

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“Buy refers to the acquisition of high-quality, income-generating assets at a price below replacement cost;

Repair means that the fund actively participates in the management and operation of the invested companies and quickly solves its capital structure problems, flaws and various operating problems;

Sell, once all the problems are solved and the company's operations are on track, the time will be ripe for the fund to exit.

This is the three-step strategy of real estate funds, very simple and clear.

But when you actually do it, you will find that it is far from being as simple as you imagined.

Especially the second step of repair, it is a great test of the operational level of a real estate fund, and it is also related to the fund's final profit. "

As a group of people walked on the streets of San Francisco, Xia Jingxing tilted his head and introduced the puppy beside him.

Beside him were Ivanka, Liu Xiaoduo, Zhang Chenguang and several bodyguards.

More than half an hour ago, the plane landed at San Francisco International Airport, and Xia Jingxing and the others were taken to the CBD area in the city by the puppies who came to greet them.

They plan to go together to see the nearly 300 houses bought by Xiaoquan and discuss the next operation strategy of Vision Homes.

Xiao Quan laughed and said: "Boss, I seem to have heard of your three-step strategic theory somewhere?"

Hearing this, Ivanka looked at Xia Jingxing with a smile, wanting to see what he said.

Xia Jingxing chuckled, making a mistake.

Even if his theory didn't fool Ivanka, who has been well-informed since childhood and is extremely familiar with the real estate field, now it can't even fool a puppy.

"Real estate funds all have this operating model, and each company is similar."

Xiaoquan winked at Xia Jingxing and said, "So that's it. I was wondering how this theory is so close to Blackstone's real estate fund operating model."

Hearing this, Ivanka couldn't hold it back any longer and burst out laughing.

"why are you laughing?"

Xia Jingxing glanced at Ivanka, spread his hands and said, "Everyone understands the theory, the key depends on their operational level."

Xiao Quan nodded fiercely like a bitch, "Boss is right, Blackstone's theoretical level is very high, but its practical level is appalling.

In May 2007, there were already bad signs in the subprime mortgage market. As a result, Blackstone's management, relying on the fact that their company was about to go public and had money, insisted on vigorously promoting the Hilton acquisition that had been negotiated for nearly a year.

In the end, Blackstone acquired and privatized the Hilton Hotel with a principal investment of US$5.6 billion, plus US$20.5 billion in loans from debt investors such as Goldman Sachs, Bank of America, Merrill Lynch, and Deutsche Bank, at a premium of 40%.

After the transaction is completed, Hilton's 10 hotel brands, 2,800 hotels around the world, and nearly 500,000 rooms will all be acquired by Blackstone.

But now that the U.S. and even the global economy is in recession, the tourism and hotel industry is in a slump, and it is said that Blackstone's principal of more than US$5 billion is almost wiped out.

If it weren't for Blackstone's 20-year-old golden brand, I think Goldman Sachs, Bank of America, and Deutsche Bank would all be upset. "

Xia Jingxing looked at Xiaoquan with a smile, "Okay, I've become very capable lately! In a few years, I'll have to work with you."

"I'm just hearing about it, but it's not as good as the boss. You can plan everything and win from thousands of miles away!"

Xiaoquan acted very modestly. Although he had been studying and taking extra classes like crazy in the past two years, he didn't think his level was comparable to Xia Jingxing's, not even one-tenth or one percent.

Xia Jingxing looked at Ivanka and said, "You are so familiar with the Hilton sisters, are they very proud of this deal?

I think that I sold the family property left by my great-grandfather at a good price, not only avoiding the financial crisis, but also that I will have the opportunity to buy it back at a low price in the future. "

Ivanka's mouth opened wide and she looked very surprised, "How do you know? The sisters have always shown off this deal in front of me and said how far-sighted their family is.

It is not a sale of ancestral property, but an investment strategy.

Blackstone blocked a knife for their family, and they said they were very grateful to Mr. Schwarzman (Schwarzman). "

Xia Jingxing smiled and said, "In a few years, I hope they can laugh like they do now."

Ivanka heard what was said and quickly asked: "Are you very optimistic about this deal? Do you think Blackstone can transform Hilton?"

Xia Jingxing pointed out two fingers, "Black Stone has two major advantages!

First, they have a good reputation and brand for more than 20 years, maintain good relationships with various large financial institutions on Wall Street, and know how to share cakes and make friends.

I heard through the grapevine that the CEO of J.P. Morgan is eager to get rid of Hilton's $4 billion loan.

But now that the financial crisis has broken out, JP Morgan simply cannot package these loans into securities and sell them to various investors.

As for pulling out the ladder, JP Morgan didn't even think about it. At most, he complained a few times in the circle, hoping that Blackstone would respond after hearing it.

Blackstone's second big advantage is its loan agreements.

Generally, if a company experiences operating losses for several consecutive quarters, creditors will demand immediate repayment of the loan.

Blackstone relies on its past performance and reputation, and the loan contract it signed does not have any such so-called supplementary agreement, so it will not trigger the conditions for early repayment of the loan. "

Xiaoquan opened his eyes wide and said: "Blackstone borrowed more than 20 billion US dollars in loans, and the conditions are so loose?"

Xia Jingxing responded with a smile: "What do you think? Wall Street always likes to praise the high and suppress the low. Even if the contract is a bit harsh, there are still a lot of people rushing to send money to Blackstone."

"Fake~"

Xiao Quan uttered a curse word and lamented that it was unreasonable.

Xia Jingxing sneered: "This is the same as the technological advantages of technology companies. If a financial company's brand and performance are strong enough, it will naturally receive preferential treatment.

And Blackstone knows how to use its own advantages. Otherwise, how could they create so many successful leveraged buyout cases?

With a chance to breathe, Blackstone launched drastic reforms within Hilton, moving its headquarters from Beverly Hills, California to a more cost-effective state of Virginia, while further advancing Hilton Group's franchise strategy and significantly cutting operating costs. wait.

Blackstone has done a lot of work to reduce costs, increase efficiency, and open source.

But these are not enough.

Blankfein told me that Blackstone recently wanted to talk to their group of debt investors and ask creditors to extend the loan repayment period. "

Ivanka, who loves business and learning, listened very carefully. This is top-level business information on Wall Street that ordinary people have no access to.

She couldn't help but ask: "Do you think Goldman Sachs will agree to Blackstone's request?"

Xia Jingxing nodded lightly, "I will definitely agree. The key depends on how much benefit Blackstone is willing to transfer. It is estimated that there will be a debt restructuring and debt-for-equity swap.

At the same time, Blackstone will definitely inject capital into Hilton again to show its determination to run Hilton well to many debt investors. "

Ivanka suddenly understood and nodded: "I understand! But all this is based on Blackstone's glorious success for more than 20 years. It is difficult for ordinary institutions to replicate this kind of operation."

Xia Jingxing nodded lightly. He originally had the idea of ​​acquiring Hilton, but after careful consideration, he realized that he might not be able to do it.

It has to be said that Blackstone still has real skills. It chose the worst time to acquire Hilton. The financial crisis broke out just after the acquisition was completed. Everyone was waiting to see Blackstone's joke.

As a result, Blackstone actually completed a counterattack, and the leveraged buyout of Hilton created the most lucrative investment in the history of private equity, with net income exceeding US$14 billion.

Among them, China Henan Airlines Group, which likes to buy overseas, contributed US$6.5 billion in revenue.

Because of this and several other real estate investments with huge returns, Jonathan Gray, the head of Blackstone Real Estate Fund, was directly designated as his successor by Schwarzman.

Xia Jingxing looked at Ivanka and Xiao Quan and said, "Have you understood the true meaning of "repair" now?"

Both of them nodded, understanding something in their hearts.

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