note: cloud hunting in Internet financial channels to change the traditional way of investment, subversion, as a traditional investment banking institutions service huaxing capital CEO package in 2014 phoenix finance summit reflection, whether the investment banking industry will also be reversed?
package from all the “confusion” in the past 20 year investment Banks in the works, business models, such as almost no change, since 1994 investment analysts, Wall Street into a fee has not changed for 7-9% for 20 years, PE billions to billions of fee still did not change. For domestic financial sector, he thinks, if ten years later, the new technological revolution represented by Internet to rewrite the rules of the game, will bring revolutionary boost economic growth. In it, also will encourage Banks to make a change.
the following records for a package every speech:
good afternoon, ladies and gentlemen, just now Xu Zewei to describe a better financial future, huaxing capital as China’s largest focus on high-tech with the Internet, an investment bank, we are the true believers, Internet financial is a part of us as the most strategic layout. So in the past two years, I saw countless cases associated with the Internet financial, is also a study of many associated with Internet financial business model. But frankly, I see it, the more their confusion, today to not share with you my point of view, I would like to share with you about my confusion.
this confusion comes from where? Feel in the financial world, there are two world, a world made of jersey junwei represent the future, full of opportunities and change the world, you can use a new technology for payment, can do borrow, can do investment, VC can take things we can do on the Internet.
but every time I return to the company, I sit down and have a look at our business, I will feel very frustrated, I was made in 1994 into the line of the investment bank, I do, an analyst at investment Banks in the first year, at that time I use a tool is WET, with the tool of writing PPT, then call PPT, from 1994 to now, also in the past 20 years, great changes have taken place in the world, today we are in what kind of? Us investment Banks from the west into word, PPT or PPT, I do, an analyst at the first year, the main job is to call people, arrange, often do is particularly ineffective work. After 20 years, our company, an analyst at children are children of first-class university, our company still is the same thing, call spend half of the time, date, spend the other half time to do a lot of busywork, they just take tens of dollars each year to do these things.
when I was into the line Wall Street IPO underwriting fees are 7% to 9%, after 20 years later, the underwriting fees today or were 7%, 9%, and every time after IPO pricing home by the time distribution, we played, not to say that the price is high, but on the basis of each investment Banks at the core of the customer as he fight for resources, when I was into the line of 1994 to be this way, after 20 years, is like this. In 1994 for the first time to the nyse’s visit, to see the nyse a lot of people, a bunch of people wearing small vest in the gesture of I can’t understand, after 20 years or so, a bunch of people wearing small ma3 jia3 gesturing. At that time the size of the PE only hundreds of millions of dollars, is divided into 20%, the management fee is 2%, now are billions of assets management, but with the management fee is 2%, divided into or 20%.
so on the one hand, we see a lot of here let a person particularly excited with Internet financial transition, in the Internet to do a lot of innovation, but back in traditional investment banking, 20 years, almost no change, still as before, this is my confusion, are we in this industry is Joe is in the world outside? Our world is not influenced by the Internet? Our industry will not be a new business model subversion?
I’ve been asking myself this question, I have a few specific problems, the first investment bank still needed in the future? There is said at the beginning of investment Banks to solve the problem of liquidity in the market, can help solve a capital market allocation problem. In the Internet s, when the information is becoming more and more peer Xu Zewei also said just now, when a value is only hundreds of thousands of yuan of a person, can with worth billions of people, enjoy the same information, or even close to the same service, whether also need to institutions such as investment Banks play such a role? This is the first question I asked.
your second question, there are the investment Banks, investment Banks are using in big trading platform from Taiwan, the world’s largest trading platform is exchange, China is China’s Shanghai and shenzhen stock exchange, the nyse, nasdaq, still has a lot of otc, there are many do fixed-income trading, this is a platform of investment Banks, we are on the platform to participate in the investment bank’s players. So the so-called exchange really suited for deep things? Today on the nyse’s $500 billion market value of the company is the largest company, the minimum value of the company, the company is the millions of dollars value of the two people to be in the same market? The market also can solve their needs? This is my second question.
the third question, since the financial crisis, said everyone in financial regulation, financial risk control problems, that I also wonder, if all things in the same market, how to solve the regulation problem? This may be a solution. Anyway, these are all I think about some of the problems, I don’t have the answer, phoenix me please come here today, original want to let me share my thoughts, but frankly, I confused more and more in these two years.
although there is no answer, but I have a few basic ideas, don’t think is especially mature, I think first of all, today of the entire financial system, especially we are engaged in the financial system, used in the financial world forever is divided into two pieces, one is the mechanism of market, is a retail market, why want to two piece? Because the agency is to rectify, so have the advantage of information, have the advantage of scale, there are a variety of advantages, retail is that piece of personal things. I think first of all in our institutions to the market, to voting behavior is on behalf of the agency market, I think the world today, this system today, there are too many small, inefficient exist too much is not reasonable, so it should be changed. This is the first.
second, it did not change, because the financial is a public goods, finance is a regulated goods, so we did not be Internet disruptive technology and the industry reform, to a large extent is the rules of the game today, or regulators, in protecting the industry. Without an industry of political influence over Wall Street, more than us investment bank, so our industry is largely unregulated, protection by the just cause have today this business model, as of today, from the world of the old old Morgan, underwriting fees is 7 to 9 points, to this day to the United States listed fees should be 7 to 9 points, to a great extent we are protected by regulators.
but the third point, this is unreasonable, if we do this industry to subvert the real rules of the game and rewrite inside, can promote the development of the whole system. So, I think that the earth is round, so it must be moving, share with you my outlook for the future investment Banks today, I am looking forward to some extent is ten years later, one day like me this kind of traditional investment bankers, it didn’t eat for rice, lost his job, I was a dinosaur, and maybe at that time the world is a better world. Thank you very much.