The Chaebol Who Flies From Space - Chapter 78



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The Tycoon Who Flies Into Space Episode 78

Episode 78 Oil Fund (2)

“Even though it is called a dividend investment, the investment size has grown enormously.”

[As the size of the investment fund grows, the movement becomes dull.]

“The foreign exchange market has a huge trading volume, isn’t it?”

[If the transaction size is large but continues to suffer large losses, the parties to the transaction will naturally reduce the size of their investment and the transaction will become discouraged.]

“Most people use leverage to invest in the short term, right? When the loss size increases, the trading volume decreases.”

[There is no choice. Forex trading does not have a lot of short-term volatility, but it is done on a very large scale.]

If I make $100 billion, that means I lose $100 billion somewhere else.

When a large amount of money flows in one direction, funds dry up on the other side.

This speed needed to be adjusted appropriately.

“We need to create an oil fund, just like you said.”

[This is the best defense in the current situation.]

“I shouldn’t hand over the fund management rights, right?”

[Of course. The investment returns are not comparable. If you compare long-term returns, there is no room for criticism.]

Oh Seon-woo arrived at work on time as usual and kept his post. There are only four months left until the presidential election.

I drank coffee as usual while watching the trees that had grown lushly in the Blue House all summer preparing for winter.

The ruling party’s presidential candidate has already been decided.

The balance of power was completely tilted, and the Blue House’s words were no longer effective.

Although he was advised to run for the National Assembly election in the middle, Oh Seon-woo thought he had done enough. He briefly considered running for office, but he no longer wanted to participate in real-world politics.

The plan was to step down along with the president as the last martyr of the regime and return to school.

The university where I was already working also wanted me to teach starting next spring semester.

I was enjoying the view outside, leisurely, when the phone rang.

“Hello, this is Oh Seon-woo.”

– Hello, Chief. I am Jo Yong-won. How are you?

“Ah! Chief Investigator, no, should I call you Chairman now?”

– Just call me whatever you want.

“Yes, what’s going on? You’re in America right now?”

– I think I’ll have to stay here for a while.

Oh Seon-woo smiled bitterly. Since the presidential election has already begun, those who are rumored to have a lot of money are suffering quite a bit.

Cho Yong-won is rumored to have a lot of cash, making him a target for campaign fund seekers.

“I know what you mean. Korea is a bit noisy. You’ll have a hard time when you come back. So what’s going on?”

– I’m talking about the West Sea Oil Field. Are you not saying anything?

“What do you mean by coming out? What does that mean?”

– I think it’s something like the government wanting to acquire my shares.

Oh Seon-woo hesitated for a moment.

“To be honest, there were some who said that, but I concluded that there was no major problem. In a capitalist society, individual property should be respected.”

– That’s what I heard. Well, considering what’s going to happen in the future, we’ll have to discuss various plans.

So I thought about it this way and that, and what if I donate some of my shares to the government and create an oil fund?

“Oil fund?”

– Yes, like Norway, they invest some of the money they earn from oil drilling into a sovereign wealth fund.

Oh Seon-woo, who had been talking comfortably while leaning back in his chair, straightened up.

“You’re donating your shares to the country? How much are you talking about?”

– I think it’s around 30%.

“30%? 30%. Well, oil companies have to pay taxes too, so I guess that’s the limit.”

– There are many people who are after the genetic stake. I have to hold more than half of it. And the fund asset management rights have to be on our side.

“That’s a little… … .”

– I looked into the operation of the National Pension Service and it was a mess. It is operated with too much emphasis on stability, so the rate of return is too low. It mainly invests in bonds, but that will be a mess in just ten years. There is a big gap between the rate of return on corporate bonds when it was first created and the rate of return on corporate bonds now.”

When the national pension was designed, the corporate bond yield was around 12%. Now it has dropped to around 5%.

It was a flawed design from the start.

There have already been voices saying that we should pay more in national pension and receive less. During the first pension reform, a plan was passed to delay the age of pension receipt from 60 to 65, but it was only a stopgap measure.

“So you’re saying that you have to have asset management authority to create an oil fund?”

– We will leave asset management to the world’s best experts.

“Who is that?”

– I’m going.

“Haha, right.”

Oh Seon-woo couldn’t help but laugh.

I don’t know what to say when he says he will create an oil fund and then says he should have the authority to run it.

“Director, there will be a lot of opposition because of your age. Just leave it to the government.”

– I don’t like it when some random person comes out and says, “Let’s make some money out of the fund I created with my own money.” Even though I’m like this, the investment return on the fund created by WD Investment is enormous. And if we leave it to the government, how do we know where the money goes? You know how the Petroleum Stabilization Fund disappeared, don’t you?

The Oil Stabilization Fund, which was created under the pretext of controlling prices when oil prices soared, was found to have none left after the change in government.

All traces of where it had disappeared had been erased.

“That happened during the previous administration. The current government doesn’t do that.”

– Then is there a law that says the next government can’t do that?

“that…….”

Even Oh Seon-woo couldn’t guarantee this. If the opposition party takes power, we don’t know what will happen.

– I will send you the specific plan, so please review it. If you want to know my asset management ability, check out Iriel Investments on Wall Street. It is an investment company I created in the United States.

After finishing the call with Jo Yong-won, Oh Seon-woo was lost in thought for a moment.

That’s not a bad thing.

No, it is something that is incredibly helpful to the current administration. It is an issue that could be a great help to the ruling party’s presidential candidate who is being pushed back by a narrow margin.

“Investing in Ariel? Who should I ask about this?”

I thought of the people who were privy to the news on Wall Street.

After calling several places to confirm, I couldn’t find anyone who had the correct information, so I contacted WD Investment and received the asset management details.

The content was shocking.

After receiving the call, Chief In-young Kim entered the Blue House and took out the materials he had prepared in advance and explained them in detail to Seon-woo Oh.

The data sent from the United States was full of investment details that even Director Kim In-young did not know in detail.

The returns from Iriel Investment, which was run extremely aggressively, were beyond imagination.

Most of the investments were generating huge returns.

The fund yield of WD Investment, which sucked in South Korea’s funds like a black hole with high investment returns, was so low that it made you want to go crazy.

“So, does that mean that all overseas investments by WD Investment are made by Ariel Investment?”

“Yes. The CEO directly controls and checks everything.”

“I thought it was because WD Investment fund managers were so capable.”

“Most people would think so. I don’t interfere with small investments, but the direction of large investments is decided by the CEO.”

“The stock fund return was negative, but then increased significantly in the second half of the year. Did the investigation director personally invest in that as well?”

“It was also the boss’s work to make it closed from the beginning, predicting that the US market would not be good for a while.”

Oh Seon-woo asked carefully, lowering his voice.

“What’s happening with the fund I signed up for? I saw the return was negative last time I checked.”

“You’ll be surprised when you see it next year. I checked the return before I came in, and the return on Fund 1 was 24%. According to the CEO, US stock prices will rise sharply next year.”

“You invested in an American IT company?”

“Most overseas investments are like that.”

“I heard that IT companies that were on the verge of death are starting to recover. Their stock prices are recovering quickly.”

“It is not known to the outside world, but the CEO is the largest shareholder of a large American IT company.”

“If CEO Cho has the authority to manage the oil fund, he will focus on investing in that area, right?”

“That’s right. The CEO predicts that the US IT sector will outperform other sectors in terms of profitability in the future. The companies that failed have already gone bankrupt, and the surviving companies will monopolize the market. The US stock market is moving as the CEO predicted.

I understand why Cho Yong-won criticized the poor management of the National Pension Service.

“I need to talk to the Minister of Strategy and Finance. I don’t think he will oppose it.”

Meetings held at the West Annex, located on the west side of the main building of the Blue House, are held whenever there are important economic issues.

It was a meeting that started with the purpose of eliminating discord by coordinating the opinions of the Blue House and the administration.

After a long hiatus, the chief economic adviser held a meeting for the first time in a long while.

The senior officials at the Blue House and the ministers of the administration all had the same military-related atmosphere.

Everyone was taking precautions, hoping that no incident would occur during the term, but this was an unexpected meeting.

Minister of Strategy and Finance Oh Young, who had been avoiding the Blue House to avoid any misunderstandings ahead of the presidential election, also showed up for the first time in a long while.

“What are you talking about all of a sudden, creating an oil fund? Are you bringing up the nationalization plan that was previously considered but scrapped?”

As oil was being drilled, the Ministry of Strategy and Finance internally reviewed the plan to nationalize the West Sea oil field.

Although it was discarded during the review stage due to the side effects that would occur if personal property was touched, it was an issue that would eventually become the subject of in-depth discussion when the government changed.

“No, President Cho Yong-won contacted me. He said he would create an oil fund like Norway with some of the shares.”

“The chief investigator made the offer first?”

“I got a call and had a chat with them, and they asked my opinion on creating a Norwegian-style oil fund.”

“How does Norway operate?”

“They say that the fund management regulations only allow for overseas investment. They take out foreign currency that comes in under the pretext of investment. Otherwise, the exchange rate will become a mess like in the Netherlands, and domestic manufacturing will all die out.”

The biggest issue of debate was the resource curse. The Ministry of Strategy and Finance had a hard time adjusting this as the Korean won strengthened.

“How will you operate it once you make it?”

“It is a method of accumulating assets over a period of ten years and then distributing a certain amount based on operating performance. It is like paying dividends to a company.”

“What about the target?”

“I heard that all Korean nationals, including minors, are eligible for the pension. Minors will save up and receive the pension all at once when they become adults.”

The vice minister of finance who attended the meeting became greedy.

“Can’t we bring that in? Like the national pension.”

“If we don’t guarantee asset management rights, there will be no oil fund.”

“Isn’t that too presumptuous? Once you donate your share, that’s it. Where else can you come up with something so reckless?”

“I understand that Vice Minister Cho is being greedy. When I told him to leave it to the government, President Cho started talking about the Petroleum Stabilization Fund. I had nothing more to say.”