Chapter 91: Three Men Discuss Private Equity

Words : 1806 Updated : Sep 12th, 2025

Chapter 91: Three Men Discuss Private EquityMonday morning, 9:30 AM. Teli A opened with a 6.55% rise, trading at 34.25 yuan per share. Sёarᴄh the NôvelFire.nёt website on Google to access chapters of novels early and in the highest quality. Lu Liang called over Wen Chao to set up a broker sub-account exclusive to institutions for him. “Sell 10–30 lots per trade until I tell you to stop,” he instructed. The institutional account still held 22,577 lots. If sold at the current price, it could generate 77.32 million yuan in cash. After two days of deliberation, Lu Liang decided to transfer his position. He had already made substantial profits from this stock over two consecutive waves. The market thrives on balance, and since the Wen Zhou Gang was willing to show goodwill, he had to reciprocate. “Mr. Lu, are you asking me to execute the trades for you?” Wen Chao, usually calm and composed, was momentarily stunned. “You don’t know how? Should I teach you?” Lu Liang asked, surprised. How could a Fudan University finance graduate not know how to trade? Hadn’t they used simulation trading in school? Wen Chao’s face turned red as he quickly explained, “Mr. Lu, I do know how. It’s just that I’m…” “...A bit surprised, right?” Lu Liang asked with a smile. Wen Chao nodded rapidly. After all, he had only joined the company 23 days ago. Being entrusted with trading by Lu Liang so suddenly left him unsure whether to be thrilled or anxious. He suddenly thought of a civil engineering intern who, after just two months on the job, was sentenced to over ten years in prison. “Don’t stress about it. It’s just a test of your skills,” Lu Liang reassured him with a smile. He carefully explained the process: sell more when market sentiment is high, sell less when it cools. There wasn’t much technical complexity involved. Since Lu Liang had decided to transfer his position, all the shares would be taken over by the Wen Zhou Gang. The key was to proceed slowly without disrupting the market trend. The process, however, was monotonous. That’s why Lu Liang set up the sub-account for Wen Chao to handle the execution. The sub-account didn’t display the main account’s positions or funds. Lu Liang supervised the entire process, ensuring nothing could go wrong. Wen Chao understood and was on high alert, determined not to mess up. “Let’s start at 34.25 yuan,” Lu Liang said, sipping his coffee as he watched the account’s holdings steadily decrease. The stock’s turnover rate was climbing, yet the price remained unaffected and even continued to rise. This signaled a shift: while they were selling off, another party was fully taking over at these high levels. The retail investors were oblivious, mistaking the institutional activity for a scramble to accumulate shares. They eagerly joined in, pushing the stock price higher, hitting the upper limit several times. As time passed, the only sounds in the office were Wen Chao’s typing and mouse clicks. Lu Liang rested his chin on his hand, watching the diminishing holdings and calculating the growing profits. When Wen Chao’s sub-account displayed a failed trade, Lu Liang hadn’t yet signaled to stop. Wen Chao turned to him, his expression naive yet earnest. “Mr. Lu, is… is it all sold?” ř????????????????Ε???? Wen Chao had no idea how many shares he had sold. He had been entirely focused on the transaction details, mechanically executing the trades. Lu Liang glanced at the account showing a 0% position and smiled. “Good work. You can leave now.” “It was no trouble, Mr. Lu. Let me know if you need anything else,” Wen Chao replied, slightly dazed but polite. After Wen Chao left, Lu Liang began tallying the profits. Starting with an initial capital of 79 million yuan, he now held $16.2635 million and 149 million yuan in cash. Of that, $6.2635 million came from shorting the yen, while the two waves of trading Teli A had earned him 134 million yuan. All told, including the 20 million yuan in account margin, the original 100 million yuan principal had grown to 272.43 million yuan. “Two months, a 172% return. Not bad,” Lu Liang murmured, stroking his chin with a smile. He called Lao Meng downstairs to share the good news over tea. “This isn’t just ‘not bad’; it’s f***ing phenomenal!” Meng Changkun exclaimed, his eyes wide with excitement. Even with only a 25% share of the profits, Meng still earned 43.1075 million yuan. Turning a 50 million yuan principal into 43.1075 million yuan in profit within two months meant an 87.5% return. Excitement aside, Meng suddenly realized something. “You’re settling accounts?” Although Meng had entrusted 50 million yuan to Lu Liang for management as a form of asset custody, the contract didn’t require Lu Liang to disclose profits or settle accounts before the agreed date. Lu Liang nodded with a smile. He was indeed planning to settle early. Meng Changkun quickly asked, “What’s going on? Why are you suddenly thinking of settling early?” Lu Liang explained candidly, “I plan to take a break and use this time to study private equity operations thoroughly.” After this settlement, his personal savings would exceed 300 million yuan—enough to ensure a worry-free life. From then on, he could start making money with other people’s funds. He wanted to establish a subsidiary focused on asset management and intended to bring Meng Changkun and Xiao Wang on board. “That spoiled brat Wang Xiaocong? Why bother including him?” Meng sneered. If not for Wang’s wealthy father, Meng joked he’d have made sure the boy wasn’t even born. Lu Liang chuckled. “Precisely because his dad is the renowned Wang, last year’s richest Chinese and chairman of Wanda Group. That alone makes him worth including.” Real estate is deeply tied to the domestic economy. For Wang’s father to achieve the status of the richest Chinese globally, he’d have mastered navigating both black and white markets, or at least come close. Lu Liang lacked the necessary clout, and while Meng had assets in the billions, his influence was confined to the Yangtze River Delta. Only with Xiao Wang’s inclusion could their venture truly thrive. “How do you plan to divide the equity?” Meng asked. “Sixty percent for me, thirty for you, and ten for him,” Lu Liang replied. “If he feels it’s too little, I’ll lower my share to twenty percent,” he added. Meng mulled over the proposal for a long time. He was a shrewd man. Lu Liang already had a solid reputation, and the fact that Meng could secure a 30% stake was purely because of their long-standing association. Moreover, Meng’s contributions to this collaboration were limited. Taking too large a share might draw resentment and make him a target. Lu Liang, surprised by Meng’s thoughtful silence, added, “But for the position of deputy general manager, Lao Meng, you mustn’t refuse. Xiao Wang’s too young, and I don’t feel confident entrusting him with it.” “You’re not taking it yourself?” Meng asked, startled. “All I need to focus on is making money. Handling investors can be your responsibility,” Lu Liang replied, smiling. He hadn’t forgotten his ambition to become a pioneer in domestic renewable energy. Establishing the private equity firm was a step toward securing the funds he needed. However, to persuade investors to fund his renewable energy vision, they’d need to see some returns first. “Well, I suppose I could help if you can’t manage it yourself,” Meng said, pretending to hesitate. Despite his modest tone, the grin he tried to suppress nearly reached his ears. As long as Lu Liang kept generating profits, Meng’s role as deputy general manager would be more comfortable than Lu Liang’s own position. Lu Liang laughed but didn’t call him out on it. Meng deserved every bit of this success. Geniuses are common, but true talent scouts are rare. Lao Meng had supported him when he was unknown, which was no small feat. A deputy position wasn’t just a title; it was trust and recognition. Better to give it to someone like Meng, who had experience and strong interpersonal skills. That evening, Lu Liang hosted a dinner, inviting Xiao Wang to join them. The three discussed the matter in detail. Lao Meng, ever the master strategist, easily handled Xiao Wang. He first presented Lu Liang’s initial 60-30-10 equity split, which made Xiao Wang visibly displeased. Then, feigning a reluctant compromise, Meng offered 10% from his share, turning it into a 60-20-20 split. “This seems more reasonable,” Xiao Wang said, finally smiling in satisfaction. Curious, he asked, “How much did you make in your last collaboration?” “Not much, just a 172% return in 50 days. Turned one billion yuan into 2.72 billion,” Meng said, imitating Lu Liang’s calm tone as if describing something ordinary. Xiao Wang was the first outsider to learn this, but he wouldn’t be the last. The achievement was both a victory and a calling card. “What the f***? Are you even human?” Xiao Wang exclaimed, his eyes wide with disbelief. A 172% profit in 50 days, all in cash—not inflated by startup valuations but solid liquid earnings. And starting with a billion in cash! Suddenly, Xiao Wang furrowed his brows. “Something doesn’t add up. Didn’t those Japanese guys say you made $60 million?” “It was only around $6 million, and I got stuck with the blame,” Lu Liang sighed. The more he thought about it, the more aggrieved he felt. When he had sufficient capital and the right opportunity, he’d make sure to pay them back in kind. “I wouldn’t mind taking that kind of blame!” Xiao Wang said enviously, wishing he could trade places with Lu Liang. If the Japanese hadn’t stirred the pot, Lu Liang wouldn’t have gained his current reputation so quickly. It would have taken at least another year and a half. After a pause, Xiao Wang asked, “How much are you planning to raise for the first phase?” “One hundred million USD. Two million per share, with a 2+20 structure,” Lu Liang replied. He had researched and found that the 2+20 model was the most common private equity fund fee structure domestically. The ‘2’ refers to a 2% management fee on the fund’s total size. For example, with a two-million-dollar share, an investor would pay $2.04 million. The ‘20’ allows the fund manager to take 20% of the total profits as a performance incentive. With $100 million in capital, earning another $100 million would yield $20 million for the fund management company.

Chapter 91: Three Men Discuss Private Equity

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