America's No. 1 financial conglomerate

Chapter 543 The Planning and Development of Ernst Asset Management

Before Ernst could answer, the meeting room door was pushed open again.

O'Shea Ricardo, head of the hedge fund division; Ralph Payton, head of the private equity division; Pervin Houston, head of the asset management division; CFO Owenito; Princeton, head of the risk management division; Jeremy, vice president assisting Jane Fraser in managing the company; and a group of senior executives from Ernst Asset Management walked in.

In no time, the conference room, which could accommodate twenty people, was packed to capacity.

The company is developing rapidly. With the continuous expansion of its business scope, the amount of assets under management is growing exponentially. Investment targets have expanded from traditional stocks and bonds to hedge funds and private equity, and even to corporate mergers and acquisitions consulting operations.

The diversification of business has naturally led to the iterative upgrading of organizational structure, which has now developed into a system that covers more than a dozen functional departments, including investment, risk control, finance, legal affairs, strategy, and human resources, with a total number of employees exceeding 2800. Branch offices have also been established in Asia and Europe.

Just last week, Jane Fraser submitted a document to him entitled "Strategic Structure Optimization Plan for the Next Three Years," which he found very good.

This report outlines a strategic vision for four major business segments and four independent subsidiaries, so detailed that Ernst was full of praise.

According to her proposed plan, Ernst Asset Management will be finely divided according to business attributes to form four core business clusters: portfolio management, global markets business, alternative investments, and service integration.

The portfolio management cluster comprises several sub-departments, including Fixed Income, Fundamental Equity Investment, Systematic Investment, Multi-Asset Strategies and Solutions, Global Lending and Liquidity, and Private Investment.

It comprehensively covers the core areas of traditional asset management, providing customized asset allocation services for institutional clients and high-net-worth individuals.

This cluster will focus on stable returns under controllable risks, achieving long-term asset preservation and appreciation through a diversified portfolio of investment strategies. The global markets business segment is positioned as the company's trading engine, encompassing the global trading department, securities lending and liquidity department, financing and asset-liability management department, index fixed income department, ETF market and index investment department, and global markets relations management department.

This cluster is primarily responsible for secondary market trading, liquidity management, financing arrangements, and the development and operation of index products globally.

The alternative investment cluster focuses on non-traditional asset classes such as private equity, infrastructure investment, real estate funds, credit investment, and hedge funds.

This cluster is quite simple: it leverages the advantage of its large capital scale to obtain excess returns, while also complementing traditional asset management business and diversifying overall investment risks.

The final service integration is like Morgan Stanley's platform model, creating a one-stop financial services ecosystem.

The company primarily focuses on innovative businesses in the future internet technology sector, such as data services and fintech solutions, aiming to enhance the group's core competitiveness and build a sustainable business ecosystem through technological empowerment.

This was Ernst's advice to Jane Fraser, since such a saying doesn't exist now.

But what pleased Ernst the most was that Jane Fraser had grasped his meaning, or rather, his will.

The name "asset management company" itself indicates that the company's nature leans more towards asset management.

Although Ernst also values ​​the hedge fund and private equity departments, he cannot put the cart before the horse.

From a long-term development perspective, asset management has more room for imagination and greater potential for growth.

This can be seen and confirmed by three representative companies that followed: BlackRock, Blackstone, and Goldman Sachs. All three institutions are comprehensive financial giants with businesses covering multiple areas, but each has a clear core focus.

BlackRock, with its core focus on passive investing and index products, has become the world's largest asset management firm.

Blackstone focuses on private equity and real estate investment, and has built a leading brand in the alternative investment field.

Goldman Sachs, on the other hand, has built its business on investment banking, forming a dual-engine model of investment banking and asset management.

BlackRock, on the other hand, is undoubtedly larger, both in terms of status and influence, and it aligns with future asset management trends.

Jane Fraser understood his thinking, and this plan was also guiding Ernst Asset Management down this path.

However, while the plan is comprehensive and complete, Ernst Asset Management is still a long way from becoming the company she envisioned.

But if that day ever comes, Ernst Asset Management will become another giant on Wall Street.

The meeting began with a briefing from Pervin Houston on the asset management department.

"As of the end of the last quarter, the department's assets under management reached US$38 billion, an increase of 7.2% over the previous quarter, and the average yield of fixed-income products reached 6.8%, exceeding the industry average by 2.6 percentage points."

"However, by the end of this year, the assets under our department should exceed $100 billion, and may even exceed $110 billion."

Everyone smiled knowingly, understanding why the funds managed by the asset management department had increased so significantly. This was mainly due to Ernst, or rather, the success of e-commerce.

When Ernst Asset Management released its full-year e-commerce forecast, everyone scoffed at it, and some media outlets even publicly ridiculed it.

Looking back now, that prediction, which seemed so exaggerated at the time, was incredibly conservative.

This led many to see that Ernst was using his forward-thinking vision to influence Ernst Asset Management, otherwise Ernst Asset Management would not have issued such a forecast report.

The fact that this has had an impact means there will be a next time.

This is also why there has been an increase in high-net-worth individuals visiting our office recently. They believe that Ernst Asset Management Group, or Ernst in general, can bring them satisfactory returns on investment.

After Houston finished speaking, it was Ralph's turn, and they both talked about the recent achievements of the private equity division and the ongoing acquisition negotiations.

"Regarding the San Francisco Giants, we have reached a preliminary agreement with them for $1.8 million, completing our industrial layout in the baseball field."

Ernst raised an eyebrow slightly, a hint of surprise and interest flashing in his eyes. "Oh? I remember the seller was insisting on a $2 million offer, their attitude was very firm. How come there's such a big change all of a sudden?"

Ralph smiled and looked at him. "You should know very well how popular the Internet is right now."

The atmosphere in the conference room became more relaxed, and many executives revealed strange smiles.

With the internet boom sweeping across the United States, capital is pouring into the sector, whether investing in early-stage tech companies or chasing internet-related stocks in the secondary market—this is perfectly normal. However, choosing to sell core assets and invest in the uncertain internet boom—this all-or-nothing approach indicates an extremely high level of gambling mentality.

This kind of betting model might yield high returns in the short term, and it might succeed once or twice, but sooner or later it will fall into the abyss.

When that day comes, you will lose all your chips and it will be very difficult to recover.

"Besides the San Francisco Giants, another major development is that we have essentially completed the acquisition of Manchester United Football Club." Ralph's words once again drew attention.

"We have reached preliminary acquisition agreements with Manchester United's two major shareholders, Edwards and the Manchester United Supporters Association. At the same time, we have also acquired a portion of the circulating shares through the secondary market. Once the share transfer is completed, we will hold more than 53% of Manchester United's shares, becoming the absolute controlling shareholder."

He paused, then looked at Ernst and said, "The question we face now is whether to push for Manchester United to be privatized and delisted?"

This isn't really a question of privatization, but rather about how Manchester United treats its other shareholders.

Besides the Edwards family and the fans' association, Manchester United also has many scattered small and medium-sized shareholders. The core issue is how to handle the rights and interests of these shareholders.

If you want to deal with it, it's very simple; even if they don't sell the stock, there are various ways to do it.

Let's all contribute to a £100 million transfer budget over three years.

Once you put your money in, there will be even bigger investments coming in next time, such as renovating Old Trafford stadium, investing in youth training, and a series of other projects that require huge financial support.

There's always a reason to spend money. And for small and medium-sized shareholders who are unable to make further investments, their equity will be gradually diluted.

Once the shareholding ratio reaches the statutory threshold of 75% for privatization and delisting, these shareholders have no choice but to either sell their shares at the price offered by the group or watch helplessly as their shares become worthless paper with no market value.

"What's your opinion?" Ernst turned his gaze to Ralph, wanting to hear his ideas.

"My suggestion is to postpone the privatization and delisting process."

"By keeping Manchester United a publicly traded company, we will have more room to maneuver in the capital markets."

"We can raise funds through private placements and convertible bonds for team building and commercial development. At the same time, being a listed company makes it easier for us to manage market value, maximizing equity value through a combination of performance release and capital operation."

Ernst instantly understood: Ralf wanted to use Manchester United as a capital operation platform to amplify investment returns through financial operations.

In other words, it's called insider trading, or manipulating stock prices.

"Then let's do it your way." He didn't have any particular requirement to privatize it.

"There's one more thing," Ralf's expression suddenly turned strange. "Sir Alex Ferguson, the manager of Manchester United, asked me to convey that he hopes to have the opportunity to meet with you."

Ernst was taken aback. The company that acquired Manchester United was Ernst Asset Management, a business transaction. Why would he come to see him?

Are they afraid that the promised transfer investment will be lost, and that they will renege on their promises after the acquisition? But all of this is written into the acquisition contract.

Then there's only one possibility: Ferguson is afraid of losing his job.

Although his achievements at Manchester United are undeniable and he enjoys the support of fans, the current situation is completely different from that of the Edwards era.

Even if they oust this meritorious manager, Manchester United fans will only cause a stir for a while at most.

In football, results speak for themselves. With the injection of funds from Ernst Asset Management, whoever becomes Manchester United's manager, the results won't be bad.

As long as he can achieve good results, the fans will gradually forget about this meritorious head coach.

"Tell him that as long as he doesn't go too far, he can rest assured."

Ernst decided to give him a warning; he didn't want Ferguson and his son to become reckless just because Manchester United had money. It was better for them to keep their hands to themselves.

"It's not because of that," Ralph said with a strange expression. "He wants to hear your opinion on player transfers."

Ok?

Ernst was dumbfounded. You didn't consult with the transfer director about the player transfer, so what right did you have to listen to my opinion?

Ralph then explained, "The Knicks, there's been a long-standing rumor that your involvement was behind their initial trade." As soon as Ralph finished speaking, all the executives in the conference room turned their gazes to Ernst, their eyes filled with curiosity and inquiry.

However, this gaze falls into two categories. One is that of those who know the answer, who are curious whether Ernst will agree to Ferguson's request for a meeting and whether he can replicate the Knicks' magic in the football world.

This year's Knicks have been dazzling, and they are stronger than ever before.

This team, built around a young core, has shown remarkable competitiveness in the new season, and many sports media outlets predict that they are poised to dominate the Eastern Conference after Michael Jordan's retirement.

Kevin Garnett's rapid growth has made Knicks fans gradually forget about Patrick Ewing, while Tracy McGrady and Steve Nash, after a season of adjustment, have also grown into near-All-Star players in the league.

In this year's draft, the Knicks successfully selected Dirk Nowitzki and Vince Carter, among other rookies, through the draft and trades.

Nowitzki has shown tremendous growth potential, while Carter has quickly realized his potential, securing a starting position after only 20 games in the new season and averaging an impressive 15 points and 5 rebounds per game.

The Knicks topped the league standings with an 18-3 record, driving the New York media into a frenzy, with many writing articles touting the imminent arrival of a Knicks dynasty.

Keep in mind that the vast majority of these players have been in the league for less than three years. Given time and some room for growth, the shadow of a dynasty team is already emerging.

According to a quote from the New York Times, the Knicks will place an All-Star or a future All-Star in every position.

Of course, this is just a sensationalist claim. At least at the center position, Knicks fans are dissatisfied, feeling there's a lack of star power.

Recent reports suggest that Ewing may be bought out by the Timberwolves and could return to the Knicks. Although his stats have declined since his injury last year, he doesn't need to be the primary scorer on this Knicks team; he's the one who drives the offense.

It was this Knicks team that made them very curious: could Ernst replicate this magical performance in the world of football?

The other group, unaware of the truth, were curious about the rumors circulating outside: was it really Ernst who orchestrated it?

That's way too exaggerated!

You're good at literature and art; not only are you a bestselling author, but your media group is also thriving.

Needless to say, in business, once Google goes public, he can basically secure his position as the world's richest man.

You're so good at sports now, are you really God's son who was abandoned on earth?

"Tell Ferguson that I'll go to Europe to watch their games when I have time."