Simon arrived at the Johnston family's estate, located by the Yarra River in the suburbs of Melbourne, near noon.
The morning call was from Anthony Johnston, but only Raymond Johnston and his wife were present for the meal. Simon had visited them multiple times recently, and Janette's parents already treated him like a son-in-law, so the initial awkwardness between them had long vanished.
After lunch, Raymond Johnston took Simon to his study.
The two sat on the sofa by the window in the study. After the maid served coffee and left, Raymond Johnston got straight to the point: "Simon, I know you're very busy, so I won't beat around the bush. For this entry, can you bring in more capital?"
Simon had roughly guessed the old man's intention before coming, and readily nodded, "Yes, I can. However, Ray, due to recent events, I'm now a bit unclear about the situation and cannot offer any guarantees. Therefore, it's best to only use surplus funds here, without affecting the company's normal operations, and certainly not blindly raising funds through loans".
Raymond Johnston looked slightly surprised to hear Simon say this, but then smiled, "Of course, I understand, Simon. I'm still very surprised that you're so clear-headed".
Simon also smiled and said, "The development space in fields like entertainment, technology, and fashion is already very vast. I don't intend to spend too much effort on the financial market. This time, I just happened to feel the timing was right and wanted to raise some funds opportunistically, regardless of the amount. Therefore, I won't be making a heavy bet".
Raymond Johnston nodded and asked, "So, how confident are you now?"
Simon thought for a moment and said, "Profitability should not be a problem. Moreover, the various restrictive measures introduced by the Japanese government after the '87 stock market crash ensure that the financial market won't experience significant ups and downs in the short term. Even if the market turns, we can withdraw in time".
The Japanese stock market and futures market now have strict limits on price fluctuations. It's impossible for Simon to replicate the miracle of the S&P 500 index futures in '87 with the Nikkei 225 index futures. At the same time, these restrictions also mean that if the market trend changes, investors won't suffer too significant losses as long as they exit in time.
Raymond Johnston was pleased with the word "we" that Simon had unconsciously used. However, he reined in his expression a bit and said, "Actually, it's like this, Simon. Not just me, but also some business partners want to put some money in and have you manage it".
Even during the preparation phase of 'Batman', Simon had already felt the deeply rooted and powerful influence of the Johnston family in Australia. The social parties held at the Johnston mansion had clearly laid out a vast network before Simon.
To maintain such a massive network of contacts, beyond personal relationships, interests are clearly the most solid bond.
Simon had never considered breaking up with Janette, and Janette's attitude was even more so. Therefore, Simon was destined to be tied to the Johnston family. He had enjoyed the benefits of this network during the production of 'Batman', and naturally needed to contribute to its maintenance.
However, just as he was about to nod, Simon thought of something and asked, "Ray, how much money will this be?"
Raymond Johnston said, "We'll need your agreement before we can tally it, but it should be no less than 1.5 billion Australian dollars".
Simon was startled.
Being in Australia, Simon knew that the recent exchange rate of the Australian dollar to the US dollar was around 1 to 0.7. 1.5 billion Australian dollars, converted, would be 1 billion US dollars, which was twice the amount of capital Simon had previously planned to use.
In the late 1980s, there were no hedge funds of the ten-billion-dollar scale.
After suffering heavy losses in the '87 stock market crash, George Soros's Quantum Fund still had a scale of less than $2 billion in the past two years. This was already a top-tier industry giant, and most other hedge funds were only in the tens of millions.
If Raymond Johnston were only putting in three to five hundred million Australian dollars, Simon could have directly agreed. But jumping to the one-billion-dollar level all at once, he didn't dare to accept it rashly.
"That's too much, Ray. I don't intend to operate a large hedge fund".
Simon's understanding of the financial market was limited to the knowledge accumulated from his 1987 operation and his general understanding of future macroeconomic trends. For smaller-scale fund operations, he could allocate all his chips to stock index futures and other financial derivatives that he understood, based on the information he had.
However, for capital operations involving billions of dollars, a single financial product would certainly not suffice, and his knowledge of other areas like foreign exchange and bonds was minimal. He also didn't have time to learn these now.
"I probably understand your concerns, Simon", Raymond Johnston said, "However, the commander of an army doesn't need to possess superb horsemanship, nor does he need to be a skilled archer. All he needs to do is use his strategy to command thousands of soldiers, proficient in these subtle skills, to win a war. The problem you face now is the same. You possess foresight and a broad perspective that others cannot match. As for those specific, detailed tasks, you can completely find others to accomplish them".
When Simon heard Raymond Johnston's words, he immediately understood where Janette's personality trait of "the superior leads others" came from.
A slight smile appeared on Simon's lips, and he said, "But, Ray, in such a short time, I can't find anyone trustworthy and capable enough to manage such a large sum of money. James can only help me oversee the existing trading team; he doesn't know much more than I do in this area".
Raymond Johnston said, "As long as you agree, I can recommend some people to you".
In the 1980s, Australia's economy was still quite small, but with the Johnston family's deep roots, finding some reliable financial talent was clearly not an issue.
Simon leaned back on the sofa, constantly weighing his options in his mind.
Accepting this $1 billion fund would bring the total capital Simon needed to control to $1.5 billion.
The larger the hedge fund, the more difficult it is to achieve a very high rate of return. This is a disadvantage of accepting external funds.
However, although there was no mention of commission, with such a large sum of money joining in, Simon naturally wouldn't manage it for free. Hedge fund fees are very high, typically 2% management fee and 20% profit sharing. With Simon's current influence, he could even further increase the commission percentage.
Regardless, controlling billions of dollars to manoeuvre in the financial market is an exciting thought.
As for success or failure.
To describe it using a popular saying from memory, the Japanese stock market is currently a "tailwind", and as long as the direction is right, even pigs can fly.
Moreover, Simon, deep down, wasn't afraid of failure.
Simon also didn't feel that he, an outsider, couldn't operate a hedge fund; there were plenty of outsiders in this circle. In comparison, the truly knowledgeable ones were often working for others. Just as Raymond Johnston had just said, professional matters should be left to professionals, and he only needed to control the overall situation.
Regarding the schedule, the time difference between Melbourne and Tokyo is only one hour. During this period of filming 'Batman' in Australia, Simon could constantly monitor the movements of the Japanese stock market.
If the Japanese stock market developed as Simon remembered, it wouldn't peak and turn downwards until the end of the year.
Simon plans to relax for a while after completing the production of "Batman," letting go of company affairs as much as possible, or at least not being as busy as he is now. At that time, he can also free up more time to continue monitoring the subsequent operations of this money.
Having made up his mind, Simon looked up at Raymond Johnston.
Raymond Johnston hadn't interrupted Simon's thoughts earlier. Realizing he had made a decision, the old man put down his coffee cup and looked over.
After reorganizing his thoughts, Simon said, "Ray, our own funds can be merged and operated together. But for outsiders, if they want to join, my condition is that for profits within 30%, I will only charge 20% of the profit share as commission. If profits exceed 30%, then for the portion between 30% and 100%, the commission rate increases to 30%; for profits exceeding 100%, I demand a 50% commission. Unlike other long-term operating hedge funds, this operation in the Japanese market is a one-time event, perhaps one year, perhaps two. As soon as this matter concludes, I will choose an appropriate time to liquidate all funds back to the investors".
Hedge funds often give the impression of huge profits to ordinary people.
But in reality, most hedge funds aim only to outperform the market, and very few funds can achieve an annual return exceeding 30%.
Raymond Johnston generally understood this, so he was not surprised by the conditions Simon offered; he even felt they were perfectly reasonable.
With 1.5 billion Australian dollars, let alone profits exceeding 100%, if it could manage to double within the next year or two, everyone would be very satisfied.
In fact, the entire Johnston Holdings Group's net profit last year was less than 200 million Australian dollars, and the annual profit scale of the companies behind the other investors this time was probably similar.
With normal investment methods, a return of twenty to thirty percent per year is already very good.
If it could truly double, it would effectively mean that everyone would receive a year's worth of their company's profit for free. In such a situation, no one would be unwilling to pay a higher commission.
As for profits exceeding 100%, Raymond Johnston didn't hold much expectation. He also knew the principle that the larger the hedge fund, the harder it is to achieve high profit rates.
There are only so many opportunities in the financial market. Small funds of a few million or tens of millions of dollars can double several times in a year if they seize the opportunity, which was probably the case with Simon's operation in '87. However, large-scale hedge funds of hundreds of millions or billions of dollars must diversify their investments, which inevitably leads to some investments making money and others losing, making it impossible to maintain too high a profit rate.
Raymond Johnston actually didn't just accept outsiders' funds without any screening.
For the anticipated sum, apart from some special partners, he set the investment threshold for others at 100 million Australian dollars. Those who couldn't afford this much or couldn't bear the loss were directly excluded; he certainly couldn't let his son-in-law suffer.
Therefore, when Simon proposed these conditions, Raymond Johnston immediately nodded in agreement.
As for Simon's words combining the Johnston family's funds with his own and not discussing commission, Raymond Johnston also did not refuse this kindness. They had already implicitly acknowledged each other as family, so there was no need to be so polite.
It would just be even better if this boy could marry his daughter soon.
Such a worry.
After seeing Simon off, Raymond Johnston called his eldest son, asking him to start selecting suitable people for Simon and also inquiring if his younger sister, who had said she was in a bad mood and quit after the New Year, had returned from Europe.
She was another source of worry.
The beginning of the year was the busiest time for the finance department, and the company's operations hadn't been smooth in the past two years. As the CFO, she just decided she didn't want to work and stopped working.
If a vacation could truly bring back a son-in-law, that would be good. But she always came and went alone.
When their father passed away, he was still talking about this younger sister.
Now, in this state, how would they explain it to their parents in the future?
Feeling a bit angry at the thought, Raymond Johnston simply found the contact information and dialled London. When the call connected, after a few sentences, he couldn't hold back his temper and sternly ordered the woman on the other end to return to Melbourne next month, or else he would personally fly to London to retrieve her, and so on.
He also repeatedly warned that this time he was serious.
When Simon returned to downtown Melbourne, the major stock and commodity exchanges in Asia had all concluded their day's trading.
Influenced by the news that Simon Westeros was optimistic about the Japanese stock market, the trading volume of stock index futures contracts on the Singapore and Osaka exchanges surged after opening today, even stimulating many futures categories unrelated to Japan.
At the same time, the Japanese stock market was entirely in the black today, with a large number of stocks hitting their daily limits. The Nikkei 225 index rose by 613 points throughout the day, totalling 31,992 points, an increase of 1.9%. In reality, if it weren't for the daily price limits on the Japanese stock market, the single-day increase in the index would certainly have been more than this.
The Nikkei 225 index futures had actually been launched less than 3 years ago, and its price far exceeded many other futures categories, usually involving only strong institutional investors. However, due to the high growth of the Japanese stock market, the trading volume of Nikkei 225 index futures had rapidly increased in recent years.
Many analytical agencies had originally predicted that the total trading volume of Nikkei 225 index futures this year would reach 5 million lots, involving over $100 billion. However, due to the stir caused by The Wall Street Journal article, in just one day today, the trading volume of Nikkei 225 index futures on the Singapore and Osaka exchanges broke the 60,000-lot mark.
Some followed the trend to build positions, some shorted against the trend, and some cut losses and fled.
Simon, who triggered this storm, made no moves. He merely checked today's settlement statement immediately after closing.
After the margin crisis of the last Black Monday, major exchanges have successively adopted a daily mark-to-market settlement system, where investors no longer settle their final profits and losses only when buying and selling stocks.
Now, after the close of trading each day, the exchange calculates the profit and loss data of investors' contracts and performs cash transfers.
Simon's Nikkei 225 index contracts held on the Osaka Securities Exchange had increased to 6,000 lots. As a result, in just one day today, he earned 3.678 billion Japanese Yen, which is equivalent to $29.9 million.
With a principal of $200 million, a profit of nearly 15% in one day, Simon didn't feel overly happy.
The Nikkei 225 index rose by 613 points in a single day, which was already close to a month's worth of gains in the past. If it continued to be calculated based on the memory of the 38,000-point limit, Simon's subsequent funds might not even be in place before the Japanese market already peaked.
If this situation continued, it would be too miserable.