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"The appearance of the third-generation financial world should be the financial of people, the finance of people and enterprises, the finance of enterprises and enterprises, and a decentralized financial system."
Keywords: current global fund size, fund classification, fund operation model
Dear readers, the author has been interested in the Noah’s 3.4 billion bond investment fund since the last time. Many netizens are very interested and are asking me how to solve the problem through blockchain technology in the future. The problem of stepping on the thunder. In fact, I am not engaged in specialized technical positions. I have only been a brick-and-mortar dog for many years. The only precious thing is that my years of experience in moving bricks have led me to reflect on many traditional financial institutions and some ideas for improvement. I also saw the changes brought about by blockchain technology. Thank you for your support of the previous article, which gives me the motivation to continue to be more literary. It also gives me the opportunity to talk to my friends about how traditional financial institutions and asset management institutions operate and are over-centred. How to solve the problem in the end. At the same time, I hope that I can arouse your reflection and resonance. This is the origin of this article.
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The technology of blockchain is open, inclusive, and decentralized. As long as there is a small group of people who can turn reflection into action, I believe that more and more friends will work together to promote the financial system in the future. Decentralization process. In the future decentralized financial system, ordinary people no longer have to look up to the towering and unreachable bank building, and will not blindly worship the well-dressed but irresponsible investment banking elite, no longer the wind of financial institutions. Pay for control and black box operation. Traditional financial institutions seem to be huge, but in fact they are like elephants that have been knocked down by shotguns. The body is huge and the body temperature is still there. The person who pulled the trigger in the past was called "Zhongben Cong".
The traditional financial institutions that people usually encounter in life are divided into "banks", "funds", "brokers", "insurance", "trusts", and several major categories (other P2P and wealth management companies in the market) Not a traditional financial institution, the mutual gold companies under the Tencent and Ali companies are basically the 2.0 version of the financial industry. There are also many defects. If you are interested, you can leave a message and have a chance to discuss it in detail. In fact, the above-mentioned several types of traditional financial institutions do the same thing in the same way, that is, at the expense of a certain interest or return, they absorb the funds from the people and then invest or lend to certain specific assets or entities, for example. Credit, income, equity, stock, currency, ETF, REITS, etc.
Due to differences in regulatory requirements and types of institutions, the above-mentioned traditional financial institutions' asset management business names and investment thresholds and investment targets are also different. For example, trust products are called “collective trusts/single trusts” and funds are called “equity investment funds/securities”. Investment funds", the brokerage is called "asset management plan." But the ultimate goal is to achieve the expected return on investment, and to pay investors the principal and interest, so the above-mentioned business can be regarded as the financial adjustment business of the modern economy and society. Therefore, friends don't want to look at the financial industry's terminology and the front desk of the marble. They feel that the investment bankers of traditional financial institutions are professional and tall. However, when the debts are thundering, the financial crisis, and the large-scale stock market crash, the financial institutions are also a face-to-face print. The only difference between us is that they have stepped on the thunder after the investment, and they have a lot of salary bonuses. We stood in the cold wind and shivered with the red cloth that defended the rights.
By the end of 2018, the global asset management industry will reach more than 80 trillion US dollars. After the financial crisis in 2008, the compound growth rate of the market has reached 12%. In recent years, the overall asset management market in China has remained at 124 trillion yuan, which is expected to be 2020. It will reach 200 trillion yuan in the year, mainly led by “banking wealth management”, “trust plan”, “insurance management”, “buy brokerage management” and “public fundraising/private fund”. Among them, public offerings and private equity funds accounted for 21.46% of the market share. Recently, many products that are trampled on are also such products. So today we will discuss the classification of funds and the mode of operation of the fund. Finally, let’s think about the shortcomings of asset management under the fund model. What are the evil behaviors caused by over-centralization in our operation process? Conduct risk prediction.
2. Fund classification and investment target
Keywords: domestic classification, public and private fund models, investment methods, thresholds, targets
In modern society, with the rapid development of the economy, specialized investment funds have been born in many sub-sectors, and the names are also various. What real estate funds, trust funds, investment funds, stock funds, money fund stocks, equity Investment funds and alternative investment funds have made a lot of people very big. In fact, we will simply look at complicated things. All of our funds are divided into "open-end funds" and "closed-end funds". Some people may use the form of legal subject to distinguish funds, such as "contract type", "company type" and "limited partnership type". However, it seems to me that the distinction between legal forms and subjects is easy to cause readers to understand the confusion and is not convenient to remember, so we The relevant content of the legal subject form will not be described.
Nowadays, the open selling fund in the market is usually an open-end fund . The initial investment threshold is 1,000 yuan, which is also called “public fund”. There are a lot of apps to choose from, such as a daily fund. Conversely, most of the funds that are not publicly sold and are subject to high risk and have an investment threshold of RMB 1 million are closed-end funds, also known as “private funds”. We can see whether the fund is open-end or closed-end, depending on whether the underlying assets invested by the fund are liquid. For example, most of the funds invested by open-end funds are secondary market financial derivatives with strong liquidity. For example, bonds, stocks, futures, currencies, etc., because the products in the market can calculate the specific net value after the market is closed every day, so it is open for a long time, and can be redeemed at any time to buy, the net value of the shares. It is also updated daily.
Closed-end funds are similar in meaning to words. They are closed because the underlying assets invested have no relative liquidity, cannot be easily liquidated, and the net value of the underlying assets cannot change significantly every day, so it cannot be calculated every day. The net value of each fund share. For example, equity investment funds, debt investment funds, alternative investment funds, for example, the author set up an equity investment fund, the fund's investment products are OFO Xiaohuang bicycle ownership, when the company does not appear on the market or does not have the next home equity, the investment Assets are ways to disperse into shares while accurately calculating the net value of each share per day. Therefore, most of the products that are stepping on the thunder in the market are closed-end funds, either redeeming the proceeds and the principal, or directly stepping on the thunder.
I hope that readers will keep a mind after reading this article. If you make billions of dollars in the future and want to buy some low-risk fund products, please be sure to look at the evaluation report and law firm of the underlying assets. The legal opinions, the audit report of the investment subject, the guarantee letter, the investment contract and other documents, if the investment amount is large, may even ask the fund manager to issue a copy of all the originals and affix the official seal to prevent subsequent treading. Fraud evidence. Don't you just swipe your card because the PPT is good and the sister who sells money is handsome. However, based on my years of experience and the way the fund is centralized, these documents will not be seen by investors.
3. Fund operation mode
Keywords: private equity fund and public fund operating mode
The operation mode of public fund : Investor Bob saw the sales content of a certain fund in the third-party fund sales organization. I feel that it is good. The performance benchmark is also quite high. The performance of the fund manager is also OK, so I bought 1000 yuan. The share of the public fund, after signing the fund agreement, the funds were transferred to the fund's custodian bank account, the asset manager, that is, the fund manager began to invest after the fund was formally established, and the securities brokers bought the subject after the research. For example, stocks, claims, currencies, etc., the net value of the investment shares is also updated according to the daily losses and profitability of the fund, Bob can also redeem or buy funds at T+1.
Private fund operation mode: Because the National Fund Industry Association stipulates that private equity funds cannot publicize funds in public or in the media, most third-party sales organizations of private equity funds conduct telemarketing, Internet software or private meetings. . One day, Bob received a call. The voice of the other party was sweet, and the words were "family, buy wealth management, annualized XX% return, high quality assets, professional team performance balabala". After many communication, Bob dispelled doubts. The financing company entered the subscription fund and signed the agreement. After the funds enter the custodian bank fund account and the total amount meets the establishment criteria, the fund is set up to invest in the target. The target of the investment has been almost understood before the investment, which may be the equity of a certain company or the creditor of a certain company. Or an asset such as a right to income.
4. Many domestic funds run the road to thunder, what is the reason?
Key words: centralization, untimely supervision, internalization of risks, serious vacancy in financial market, heavy dependence on real estate enterprises
In the above three chapters, the operation modes and characteristics of the traditional fund industry have basically been introduced. Then why are there so many public or private equity funds stepping on the thunder or investing in performance? The following is an example of a private equity fund with the most thunder, and the reasons for some problems can be explored from its operational flow chart.
The above picture shows the operation process of a general private equity fund. Investors invest funds in funds, and fund managers look for potential investment targets in the market. However, under normal circumstances, the job of finding investment targets has basically been pre-positioned. Before the fund is established, the fund manager Projects have been selected in the project pool to increase fund highlights through investment analysis and project prospects, which will increase investor confidence and reduce fundraising difficulties. There are also “blind investment” phenomenon in individual funds in the market, which means that investors are very convinced of the investment ability of fund managers. When the fund has not selected a specific investment project, it will be ready for investment, but this situation usually exists in large-scale There is no more detailed discussion between the fund manager and the investment institution.
After the fund was successfully raised, the fund was formally established and entered a closed period. The key point came. During the closed period, the fund manager needs to complete several steps in the red dotted line of the above picture before investing in the project: due diligence, investment analysis, investment agreement review , risk control review, etc., and precisely the work of these steps is completely black-box operation for investors, the work of these steps is almost independent of any external institutions, and the specific progress and investment links are not subject to investment. Human supervision. Of course, some real estate funds or non-performing asset funds may be more formal before the specific investment. The risk control department will ask the fund manager to seek the third-party independent evaluation agency in the black dotted line to conduct legal, financial, and investment projects. Asset evaluation, but this does not solve the problem of fundamental centralization. Why? Because Party A of the third-party evaluation agency is the asset manager, their expenses are paid by Party A from the fund management fee, so the evaluation results given by the third-party evaluation agency are written in accordance with Party A’s ideas. In the absence of impartiality and trust, if there is no way to be independent, then what is the fairness of the third party? A large part of the cause of the outbreak of the 2008 financial crisis in the United States was also due to the large error in the credit rating of the underlying assets in the process of securitization of mortgage assets. The three major international assessment companies, Moody's, Standard & Poor's, and Fitch International, are blamed. . Interested friends can check out the movie "Big Short", or look at some other financial documentary films, and do not expand the narrative here. Because the process of most asset management business of traditional financial institutions mentioned in the first chapter of the article is similar to the above, based on the above facts, we can basically list the “seven sins” of traditional asset management institutions and then pass Reflect on the problem to explore how to use blockchain technology to improve the shortcomings of traditional asset management institutions.
1) Black box of investment process: There is no third party or investor supervision in the overall process, and the relevant regulatory department filing system does not control the actual risks and processes.
2 ) The failure of the risk control link: the management fee income of the asset manager is the first assessment target. In particular, the risk control of some small and medium-sized asset management organizations has already become a display or just for investors to show, because in the final analysis, it is still a matter of interest. The interests of the risk control link are bound to the interests of the manager. The products cannot be sent out, no one invests, and the wages and bonuses of the risk control department will also shrink. In the case of one eye closed, everyone is happy. If there is a thunderstorm in the future, it is not a life-long responsibility system, nor does it have any responsibility. Even the project's risk control manager has already left the original unit.
3) Third-party evaluation agency petization: It should be the result of the evaluation of the investment project, and it will disclose the risk of the product to the investors and the market, but because the interests are on the side of the asset manager, do High asset valuations, upgraded subject credits, etc. are common occurrences, causing serious damage to the interests of investors and reducing the fairness of third-party assessment agencies.
4) The centralization of the asset management enterprise: The right to invest is completely concentrated in the hands of the asset manager's executives and investment managers. The cost of doing evil is extremely low, and problems such as bribery and kickbacks occur from time to time.
5 ) Short-term interest of the project : Some basic blonde projects charge a three-year management fee. Why do you do this? Because the fund can realize the short-term benefits after receiving the management fee at one time, then we can imagine that the investment will be responsible for the regular review of the project and the investigation of the operation of the asset holder. Some projects have problems in redemption. At the time, the project manager has even changed three or four, just like the recent fierce Noah’s 3.4 billion thunderstorms. When the credits were redeemed, they knew that the contract was fraudulent. Why not check it before the management fee? How many years have passed since the redemption occurred, and I have dressed myself as a victim?
6) Insufficient liquidity of assets: The bottom assets of most domestic asset management products are real estate, creditor's rights, equity and other assets. Such products are lack of liquidity, cannot be transferred in the investment process, and the investment is not scattered enough. It is easy to cause liquidity risks and tramples.
7) Hollowization of the underlying assets: Most of the assets under the investment of many asset management institutions, such as supply chain credits and real estate projects, have been hollowed out after many years of failure of risk control, project management tracking and monitoring. The underlying assets have lost their original value, and misappropriation, disguised transfer, etc. have occurred from time to time. After the thunderbolt situation occurs, some of the more powerful asset management platforms will issue a asset management product out of thin air to make up for Stepping on the project funds to solve the problem of rigid redemption, which has gradually formed a fund pool business with funds idling. If you have the opportunity to look at the underlying assets of several major wealth platforms, the results may be shocking. Let's see how many bad debts are there in the so-called hundreds of billions of platforms. This terrible thunder does not know when it will explode.
5. How does DeFi solve the pain points of traditional finance at this stage?
Keywords: decentralization, transparent management, distributed platform, platform, third-party evaluation agencies, platforms and investors
Since the end of the 18th year, blockchain finance DeFi has ushered in a slogan. Some of them were originally the beginning of the 1C0 wave. Many blockchain pioneers plan to use smart contracts on Taifang to complete various ideals. In fact, these ideals are Ok, but many projects are not suitable for smart contracts because of the frequency of transactions, transaction volume, transaction costs, etc. However, the blockchain financial DeFi project has thrived in the cold winter of the end of the 18th year. Because the essence of finance is the flow between funds and assets, the asset management organization only builds the pipeline between the capital demand side and the capital supply side, most of which are business. It meets the characteristics of low frequency, high transaction volume and high gross profit, and has the basis of using smart contracts. At this stage, many trading, lending, and stable currency projects have developed very well. What characteristics should the asset management platform in the blockchain world have in the future? Of course, these characteristics will also solve the shortcomings of traditional asset management institutions.
1) Transparency of asset management platform: All transactions, cash flow, underlying asset status, contract documents and other data are linked, and the trading participants can open the right to track and check at any time, so as to eliminate the black box of the transaction process, so that investors can clearly know their own Where is the money going?
2) The risk control link is independent: the asset management right is decentralized, the asset manager's responsibility is replaced by the smart contract, and the cutting risk control management is an independent link. Part of the risk control right is decided by the project investor to vote, part of the risk control The right is paid by the external management agency. After the final transaction is completed, the profit is automatically allocated to the risk control agency by the smart contract. If there is a risk event, the expenses will be deducted accordingly.
3) Independence of third-party evaluation agencies: Whether it is the blockchain original assets or the offline traditional assets, the asset value assessment, finance, legal affairs, due diligence reports, etc. are provided by the third-party evaluation agency service agencies, all ultimately The reporting platform is chained and traceable to the source. After the asset is chained to the TOKEN, the smart contract automatically pays the service fee to the service provider, and binds the interests of the service organization to the investor. For example, the third-party risk control agency is involved in the asset issuance process. If the community raises a challenge, it can be regarded as an asset failure and it is determined that the third-party assessment agency is in default.
4) The asset management platform goes to Sinochem: The core of the asset management platform is similar to a more complex decentralized management system, in which the functions of account management, demand matching, fund settlement, income distribution, etc. need to be completed by smart contracts, and the connection layer of the platform uses API. Port link department risk control agency, third-party evaluation agency, OTC service provider, brokerage service provider, fund lending service provider, etc., investment rights, management rights, risk control rights are rationally distributed, mutual checks and balances, and ultimately the interests of service providers and investors Determine and jointly promote the healthy development of the platform ecosystem.
5) Value-added benefits are jointly bound: In the past traditional asset management industry, investment managers and risk control departments in the investment process neglected the intrinsic value exploration of the projects they invested for short-term benefits and KPIs at the end of the year. The judgment of external environmental risks, so many asset management products do not emphasize the long-term value of the invested projects in the issuance process, and even the project's own cash flow, return ability, market fundamentals, etc. are not seriously studied, but emphasize the asset holding People's background, solvency, ability to perform, etc., but this is actually the reverse of the present, each project main body with the changes in the external business environment, the market environment changes its solvency and ability to perform will produce a lot of changes, so short-term The risk control approach will become uncontrollable under long-term operations. In the future, only through the construction of decentralized asset management ecology, investors, third-party service organizations, and external risk control agencies should focus on the nature of the project and bind the interests of investors and external service organizations in the asset chain and distribution process. Only then can we pay attention to the long-term development of the project.
6) Asset Tokenization: In the long-term asset management history at home and abroad, we can see that most of the invested targets are not subject to non-standard conversion standards during the closed period, which makes the risk premium of assets unable to be at present value. Fully reflected, for example, BOB is investing in a asset management product, the closure period is 3-5 years, then if BOB needs this money urgently within 3-5 years, he has no way to realize this asset. In the current stage, the asset manager and the investor have a great negative impact. The smaller the management scale of the asset manager, the more likely it is to generate liquidity risk, that is, to pay the risk, especially The China Banking Regulatory Commission is forbidden to introduce new rules for the fund pool business. That is to say, if there is a 100 billion management scale asset management platform, 20% of the projects will need to be redeemed in the same period in the future, but as long as there is more than 30% of the thunderstorm or delayed payment risk Then, the asset management platform is likely to face liquidity in the absence of the fund pool business, which will cause the overall chain reaction of the market or even not rule out Triggered a local financial crisis. However, if all future debt assets, fixed assets, and equity assets are tokenized and can be traded at the platform time, changes in the net value of the assets will flatten the fluctuations caused by asset risks.
6. The future DeFi world in my eyes
In the future, in the DeFi asset management platform, it is expected that all the assets on the chain will be tokenized. Token will be able to flow freely in different public chains and trading platforms. The profit and loss generated by the offline assets represented by Token will be timely. The reaction at the moment is in the present value of Token. If you buy a product for BOB, then when he urgently needs to use the money, he can choose to resell the Token at any time, or in DeFi Asset Management. Mortgage lending on the platform effectively eased the liquidity of assets. In the asset Token financing, it also brings many benefits to asset holders, asset liquidity is stronger, financing costs are reduced, and there is no need to bear the cost of third-party evaluation agencies. Redemption and trading of assets will become more convenient.
After the above analysis, we have a look at the future DeFi world asset management platform. The platform will connect investors, asset holders, third-party evaluation agencies, third-party financial service organizations, etc. to build an efficient financial system. The ecosystem can also bring better liquidity to assets of some high-quality assets in society. If there are some teams in the future that can land and improve the overall functions of the decentralized asset management platform that I have portrayed, and even enrich other functions such as transactions and payments, then the scale of assets managed by this platform in the future should exceed the trillion dollar level. I also hope that it can become a truly phenomenal DeFi application, so the value of the future platform will be incalculable. The function of the future platform is as follows:
7. Final article
Keywords: first-generation, second-generation, third-generation financial models and characteristics
In the eyes of the author, the third-generation financial world looks like a person-to-person finance, a financial system for people and businesses, a financial system for enterprises and enterprises, and a decentralized financial system.
With the progress and development of human trade, society, economy, culture and science and technology in the past few hundred years, people's lives, clothing, food, housing and other aspects are constantly evolving, from the earliest telegraph communication to the current WeChat communication, from the earliest The horse-drawn carriage to the current electric car, from the earliest precious metal currency to the current bitcoin, our generation is experiencing the fourth industrial revolution of mankind – the technological revolution. In the process of the scientific and technological revolution, we also witnessed the development of the financial 1.0 era into the financial 2.0 era. Traditional financial institutions use technological means to enhance their inclusive financial capabilities, and transaction settlement efficiency has also risen to a very high level in the Internet. In the era, we also saw the rise of financial 2.0 applications represented by PayPal, Alipay and WeChat payment, which greatly improved the convenience of financial services in people's lives. But in fact, this is still far from enough. The actual underlying structure of Financial 2.0 is still very dependent on traditional banks. For example, Alipay can realize the fast transfer payment speed, but in fact, he still settles through a centralized commercial bank, while financial The 2.0 era is only a reform of payment, transfer, and personal microfinance business in the traditional financial industry. It has not touched on the deeper asset management, corporate financial services, asset securitization, brokerage and other industries.
I believe that in the future of the financial 3.0 revolution, the trend-leading will be blockchain technology, but also blockchain technology. We can imagine how the financial business of enterprises and enterprises, enterprises and people, and people will happen in the future under the decentralized financial system, because if there is no centralized financial institution to force the storage from people, people can be free. To select the industries and enterprises that you want to support, you can also lend your own funds to other industries with higher gross profit under the conditions of risk control. The overall investment and financing costs of the society will be effectively reduced, and the efficiency will be significantly improved. Imagine one day, we can use our own cash to vote for more efficient entities and more cash-rich physical assets, rather than passively putting the best quality cash resources in our hands into inefficiencies through centralized financial institutions. Or the enterprises supported by ZF, the future world economy will be more radiant, the vitality and employment rate of SMEs will also be significantly improved. In 1997, the Asian financial crisis, the 2008 US financial crisis will also be permanent. Write in the history book.
Thanks to the support of all readers, the bloggers will continue to maintain the rhythm of irregular articles, and strive to do one weekly, welcome to leave a message to communicate with me.
About the author: TideChain, nearly 10 years of investment and financing experience, focusing on asset securitization, structured investment and financing business, has been in contact with the blockchain for 11 years and is now a DeFi enthusiast.