On February 15, Caesars Fund received another injection of capital from several government-managed pension funds in the UK, which invested a total of 1 billion pounds in Caesars Fund.
Among them is the UK's largest pension fund, the National Occupational Savings Trust (NEST). These pension funds manage a total of more than 20 billion pounds in funds.
Prior to this, the British government pension fund had been very conservative in its investments, mainly in bank deposits and British government bonds, with the Ministry of Finance at most issuing a portion of non-market government bonds NILO for it. Thanks to the fact that the market benchmark interest rate in the UK has reached more than 5% in recent years, the national pension fund has been able to maintain an average return of more than 3% in the past two years...
After all, when it comes to investment, returns are always matched by risks. Although such an investment strategy has very low risk, an average return of more than 3% is indeed difficult to satisfy.
Some media, including The Independent, have recently compared relevant data of pension funds in many countries. Among them, including the pension funds of some major European and American countries, it can be said that the rate of return of the British Government Pension Fund is at the bottom. Not to mention compared with relatively successful and higher-yield pension funds such as the Norwegian Global Pension Fund (GPFG), compared with government pension funds of countries including the United States and France, the rate of return of the British Government Pension Fund is far inferior.
That is why the British media criticized the government pension fund for its "inaction", preferring to keep the funds in the government account at such a low rate of return rather than taking out a portion to invest in and support the development of some domestic companies...
For example, the Norwegian Global Pension Fund, like the British Government Pension Fund, has half of its funds invested in products such as government bonds and bank bonds with extremely low risks, but it still takes out a large proportion to invest in assets such as stocks and real estate, and obtains a satisfactory rate of return. Its comprehensive rate of return is more than twice that of the British Government Pension Fund!
Therefore, amid such criticism, the British government's finance department has also decided to make certain changes, and will take out part of the funds from the pension funds managed by the government and invest in some relatively stable but higher-yielding products.
This time, several government pension funds put out a total of about 3 billion pounds and selected three fund products with relatively high yields for investment, including a fixed income fund product set by Caesar Fund with a closed period of 5 years and an average annual return of 12%.
The other two are Barclays Bank and Royal Bank of Scotland, which have developed fixed-income wealth management products for these pension funds.
In fact, Barron had already reached a tacit understanding with the Chancellor of the Exchequer, Brown, when he met with him before...
In the end, Brown agreed to provide a certain degree of financial support to the Caesar Fund, but accordingly, these funds would be mainly used to invest in domestic companies and enhance the competitiveness of British companies.
As for Barclays Bank and Royal Bank of Scotland, Brown will naturally reach consensus with them on certain issues - these so-called "consensus" are of course generally for the benefit of local British companies, but it does not mean that they do not involve Brown himself - there will certainly be no direct transfer of benefits, but it will also help Brown to obtain the support of these capitals at certain times.
After all, if only Caesars Fund benefited from the policy of liberalizing government pension fund investments, other financial institutions would certainly be resentful. But now that three powerful institutions have benefited, it seems much more legitimate.
"It is said that the Royal Bank of Scotland received funds because the fixed income they gave to the government pension fund was slightly higher than ours..."
Daisy also got some of the news and said to Barron:
"The Royal Bank of Scotland previously invested part of its funds in the well-known Madoff Fund in the United States. Because of this, they established a good cooperative relationship with the other party and were able to invest funds in this high-profit fund with a very high threshold. As we all know, the rate of return of this investment fund is extremely high, which has a lot to do with Madoff's own position in the American securities industry. In the years 1982-1992 when this fund performed best, its investment return rate was able to reach 13.5%-20%. Even now, it is often between 10%-15%. Therefore, if the Royal Bank of Scotland can invest this part of the funds obtained in the Madoff Fund, it can completely eat up one or two percentage points of the profit difference without doing anything. The average annual return rate they can provide can be slightly higher than ours..."
"sounds good..."
Barron did not react much to Daisy's words. After all, it was impossible for him not to know what the so-called "Madoff Fund" was. He could only say, wishing them good luck.
However, Barron was not prepared to talk much about this, but said to Daisy as if nothing had happened:
"We need to seize the opportunity to build bullish futures positions on international crude oil prices again."
"We have already started building positions before this. Since the beginning of January, the international crude oil price has returned to below $40. During this period, we have been carefully controlling the pace of building positions to avoid causing too much fluctuation in oil prices. We expect that our positions will be completed in another week, keeping our average position price below $42."
Seeing Barron stretching, Daisy hesitated for a moment, then stood up and walked behind him, just like Wang Wanting did before, and put her hands on Barron's shoulders, massaging him, while saying:
"This time we deliberately used the US dollar, with WTI New York crude oil futures as the main battlefield, to build a position and look at the international oil price..."
DS Investment Company managed by Daisy has specially established a fund to invest in crude oil futures this time. Caesar Fund has invested US$1 billion to conduct operations based on the international oil price. This is also because this operation is a relatively long-term one, unlike the previous one that would last for three or four years, so it is deliberately carried out in this form.
The reason for using US dollars to operate is that in the future, the pound will face a long-term decline in the exchange rate against the US dollar. By using US dollars, in addition to being able to make profits on crude oil futures in a few years, you can also make an extra lot of money in terms of foreign exchange rates.
This is why a large proportion of the loans and liabilities of DS Capital and other subsidiaries are currently settled in pounds sterling.
And this debt is all expressed in pounds. For Barron, there is another advantage, that is, before the end of last year, the exchange rate of pound sterling against the US dollar was in a continuous upward phase.
The industries directly under Barron's name are in debt in pounds sterling. Compared with the U.S. dollar, the appreciation of the pound has increased his debt a lot when his wealth is expressed in U.S. dollars, which has also offset a part of the appreciation of his assets. In the various rich rankings that will be announced soon, the valuation of Barron's assets that can be queried through public information will be greatly underestimated, which is exactly what Barron wants.