It can be said that this is a different time.
Earlier, Barron, limited by funds but armed with the experience of his past life, knew which companies would thrive in the future. He therefore leveraged external funding through the Mars Fund, Global Industrial Investment Fund, and Caesars Fund to complete his strategic plans.
This approach certainly accelerated his development and allowed Barron to complete some of his plans earlier.
But now, especially after the subprime mortgage crisis, the funds he controls have become immense, and he has already completed or is about to complete strategic plans in many key areas...
So, funds from wealthy Middle Eastern countries, even if they exceed tens of billions, as Bald said...
for Barron, well, it's not insignificant, but it's just not absolutely necessary.
Furthermore, to attract external capital, Barron's previously offered not only a direct profit-sharing model, as with the first phase of the Global Industrial Investment Fund, but also fixed-income models with yields as high as 10%-15%.
But that's now clearly impossible—after all, the average return offered by the Madoff Ponzi scheme over the years was only slightly over 10%.
This also explains why the Kuwait Investment Authority and the Saudi Public Investment Fund sought to withdraw their investments in the first phase of the GII Fund after the Madoff scandal broke.
The initial high-return conditions Barron offered to attract external capital in some of the DS Group's funds weren't exactly the same as those offered by Madoff's firm, but they were very similar. This
concern has not only affected the sovereign wealth funds of these two wealthy Middle Eastern countries, but also some individual investors in the Mars Fund, who are seeking to redeem their shares in the fund.
However, when the Madoff case broke, it was already October, and the investment and redemption window for the Mars Fund had already passed in September.
Baron, however, wasn't particularly concerned. Instead, the Mars Fund issued a special announcement to all investors, stating that to allay investor concerns and build investor confidence, the fund would reopen a separate redemption window within the next two weeks. Those wishing to redeem could do so within this window.
This special exception would only be made once the window was open; redemptions at other times would incur additional fees.
After the Mars Fund reopened its redemption window, applications for redemption reached approximately 10% of its total fund size, a relatively high percentage. The remaining investors were likely holding off. Any delay in the fund's redemption payments would likely have triggered a run on the fund.
While this level of redemption impacted the Mars Fund's investments, it was not significant. After all, their short positions in gold and oil futures had yielded substantial profits, with many holding onto their unrealized gains.
While redemptions now would prevent these investors from enjoying these gains, they were still relatively profitable compared to their initial investments in the Mars Fund. The new investments added to the fund in September, along with the liquidation of a small number of futures positions, would likely cover the redemption. This
calm and timely redemption process also dispelled investor concerns about the DS Group.
Furthermore, while the DS Group's funds appeared somewhat similar to those of Madoff & Co. in their early fixed-income products, there were significant differences.
After all, they didn't include all investments in stocks, securities, and futures. However, DS Group publicly owned a number of companies—O2 Telecom, SEM Group, Argos Retail Group, United Energy Group, LOMX Group, and Standard Chartered Merrill Lynch, among others. While all of these companies were somewhat impacted by the subprime mortgage crisis, they remained relatively healthy.
This was unlike Madoff & Co., which claimed to have invested its funds in financial securities, but the specifics of the investments...
were never publicly disclosed. "
Indeed, Madoff and Company have caused us considerable trouble. It's like adding insult to injury..."
JPMorgan Chase Chairman and CEO Jamie Dimon slowly exhaled a puff of cigar smoke and spoke to Barron with a hint of irritation.
"To this end, we also need to reassure some investors. Because of Madoff, many funds have become cautious, which is not a good thing in the current situation. Confidence is the most important thing in the market."
His words echoed those of Paulson, the US Treasury Secretary...
Baron had met with Paulson the day before.
"Your Highness, I've heard..."
Jamie Dimon glanced at Barron.
"You know, there are always rumors in the circle, some true, some false, but many people say you're going to make a big move."
"That's not surprising, Mr. Dimon."
Baron had no interest in either cigarettes or cigars—he disliked anything addictive. After all, money and power alone required willpower to overcome their temptations.
Baron didn't offer a specific answer to Jamie Dimon's rumors or his own speculation.
While the British Fortune (BFT) fund has become a major shareholder in JPMorgan Chase, revealing one's target too early is often unwise.
"You know, we only manage some of the funds. Of course, I make the decisions, but in reality, we're all the same, to some extent. So I always see myself as a manager of wealth, or... a steward. Whether it's for God or for others, wealth can't be entirely personal, right?"
"I completely agree, Your Highness. Wealth exists because of order, and now we need to maintain that order. As for the growth of wealth, it's a bonus earned for preserving that order."
Jamie Dimon was right. JPMorgan Chase was indeed rewarded—it was arguably the bank that expanded most significantly during the subprime mortgage crisis.
Whether it was Bear Stearns or Washington Mutual, JPMorgan Chase was the most proactive bank in the initial rescues.
These actions all stemmed from Jamie Dimon's leadership, but even earlier, they stemmed from the Morgan family's commitment to safeguarding the American financial order, a protection that reaped rich rewards for JPMorgan Chase.
It's fair to say that anyone other than JPMorgan Chase...would have struggled to secure the same terms as JPMorgan Chase in its acquisitions of Bear Stearns and Washington Mutual. The level of government support JPMorgan Chase received was truly enviable.
"But beyond that, I actually have more accurate information, Your Highness..."
Jamie Dimon offered Barron a friendly gesture.
"We're already friends, and perhaps our relationship could be even closer. If you're interested in certain AMC businesses, first of all, we're not in any way in competition with them."