Rebirth of England.

Chapter 640 Acquisition of Costco
Speaking of Larry Fink, the founder of BlackRock Group, he is a Jew born in California. After obtaining an MBA degree from the University of California, Larry Fink's first job was at the well-known investment bank First Boston Bank.

During his time at First Boston Bank, Larry Fink created a new financial product, the mortgage-backed securities (MBS), which laid the foundation for subsequent financial innovations. Yes, the CDS that triggered the subprime mortgage crisis is a type of MBS, which was originally invented by Larry Fink...

In 1988, Larry Fink joined forces with Stephen Schwarzman, the founder of Blackstone Group, to establish Blackstone Financial Management, which later became BlackRock.

However, as the company grew, differences between Blackstone and BlackRock gradually emerged.

In the end, Su Shiyi sold out his cooperation with BlackRock for US$2.4 million.

Since then, BlackRock has made great progress under the leadership of Larry Fink.

In fact, BlackRock Group also seized the opportunity during the subprime mortgage crisis and achieved explosive growth.

Starting from Bear Stearns to American International Group (AIG), BlackRock helped these companies as well as the U.S. Treasury and the Federal Reserve to deal with the "toxic" assets on these companies' books, analyze and liquidate them.

The reason why they were able to obtain this "big business" was not only because the BlackRock Group led by Larry Fink had in-depth research on this, but more importantly, it was because of their "Aladdin" system.

The full name of "Aladdin" is "Asset, Liability, Debt and Derivatives Investment Network", which is an electronic platform with powerful data processing and analysis capabilities.

The platform was launched in 1988 and was initially used only within BlackRock.

Later, BlackRock discovered that there was huge market demand for this product and began selling it to the public in 1999.

During this subprime mortgage crisis, BlackRock Group used the "Aladdin" platform to effectively hedge risks and make profits, which was in stark contrast to the heavy losses and even bankruptcy of Wall Street investment banks such as Lehman Brothers.

During this period, BlackRock Group used the "Aladdin" platform to quickly complete asset status analysis and formulate non-performing asset disposal plans for the U.S. Treasury, the Federal Reserve, and Wall Street giants such as JPMorgan Chase and American International Group. It also provided key consulting services to sovereign funds in Japan, Norway, Singapore and other countries, and the results were widely recognized.

Baron knew that during the subsequent European debt crisis in 2009, the European Central Bank, the Irish and Greek governments all began to use "Aladdin" to deal with the crisis.

This system was later widely adopted, and even BlackRock's "competitors" such as Vanguard Group, Blackstone Group, and State Street Corporation had to purchase and use it. It was called the "basic platform" in the financial field...

After this, BlackRock Group will have more than 4500 billion "bad" assets under management and obtain 4000 billion US dollars of financial credit from the US government to resolve larger-scale bad assets. After a few years, the group's assets under management will reach 10 trillion US dollars, making it the world's largest asset management group.

It can be said that by that time, people’s lives will be connected to this group at all times...

Although Baron also has confidence in DS Group, he can accept exchanging equity with these future top capitals to deepen the "friendship" now before the rise of BlackRock Group.

What's more, in addition to the fact that DS Group has completely become an asset management group, in the cooperation between the three parties, in addition to each party accepting a board member from the other party, the DS Group will also send a board member to the other party, which can be regarded as a restraint on each other.

In addition, Barron had other gains.

Vanguard, BlackRock and State Street have agreed to sell their shares in Costco to a consortium of Argos Retail Group and Caesars Investment Management - but they need to pay a 35% premium over the current share price.

Even so, due to the decline in Costco's stock price, the acquisition price is much lower than when Barron was preparing to acquire Costco in June this year. After continuing to absorb Costco's shares in the secondary market, if the acquisition of these institutional holdings is completed, Argos Retail Group's shareholding in Costco will exceed 6%.

Under such circumstances, Berkshire Hathaway finally gave in and was willing to sell the 4500 million shares of Costco they held to them.

At this point, Argos Retail Group is able to launch a comprehensive acquisition of Costco and complete the privatization and delisting offer.

They have been planning the acquisition of Costco for a long time. After contacting the other party's management and promising to keep the management stable after the acquisition and not make major adjustments, Costco's management also tended to be acquired by Argos Retail Group.

After all, everyone can see that the DS Group is wealthy and powerful, and with its support, their future development plans will certainly be guaranteed.

Therefore, the acquisition of Costco currently only needs to wait for the approval of shareholders and the approval of relevant US regulatory agencies.

"I heard that you are also planning to acquire AIA, Your Highness."

As mentioned earlier, the relevant securities assets of AIG were analyzed and liquidated by BlackRock. Especially after AIG was taken over by the government, with the support of the Treasury Department and the Federal Reserve, BlackRock was deeply involved in the relevant assets of AIG. Therefore, it is not surprising that BlackRock knew some internal information about the acquisition of AIA by Barron's AIC Group.

"After all, they need funds to get through the difficult times, and I am also somewhat interested in AIA."

Barron smiled and said:

"In fact, I am also very interested in those 'bad assets', Mr. Fink, but unfortunately, Paulson and others will not give us such things..."

"We are more professional in this regard, and it is not an easy task..."

Well, Barron just said this casually. After all, DS Group is British capital. Being able to intervene in the acquisition of some assets already gives it many advantages over China Capital.

As for the "preferential treatment" of local capital, that is purely a thought...

Of course, he now has an advantage over Wall Street capital, that is, the trust of the wealthy people in the Middle East.

Previously, Badr, president of the Kuwait Investment Authority, represented several sovereign wealth funds and hoped to increase investment in DS Group's funds. The reason was that the money they invested in Wall Street was badly damaged in the subprime mortgage crisis.

Baron didn't care at first, as he was not short of funds. But later he thought that if he didn't want the money, it would inevitably be invested in SoftBank, so this matter has been on his mind.

If it was a profit-sharing model like the one of the Global Industrial Investment Fund Phase I, Baron would not have wanted to continue this form. Moreover, the funds of the Kuwait Investment Authority and the Saudi Public Investment Fund in the GII Fund Phase I had already been withdrawn, and the remaining funds of his own were incorporated into the Phase II fund.

After the subprime mortgage crisis, these wealthy countries in the Middle East now want stability, so they invested in the second phase of the GII fund in the form of fixed income... Well, with the dissolution of the first phase, there is no such thing as the first and second phases now, there is only the overall GII fund.

The first batch of these sovereign wealth funds in the Middle East have invested a total of $100 billion, and they will continue to expand their investments in the future - they will slowly withdraw their investments in other places...mainly in the United States, and then invest them in the GII fund.

(End of this chapter)