Chapter 186: Short-Term Variables

Lower Manhattan, Golden Edge Headquarters.

Ultra-Precision Strategy Conference Room.

A deep smile settled around Lionel Brennan’s eyes.

The tension from just moments ago had vanished, and the others in the conference room were also basking in elation.

“A huge success, boss.”

The numbers on the monitor danced as if celebrating Lionel’s victory.

[Total Investment: $72 billion → Valuation: $124.56 billion, Return: 73%]

The astronomical figure was hard to believe, considering the short time it took to achieve.

Lionel opened his mouth with a satisfied smile.

“This makes the three years of preparation worthwhile.”

Applause erupted from all sides.

Lionel leisurely enjoyed the shower of applause.

Shortly after, a man in a suit began his report, based on the organized data.

“As you predicted, boss, most of the funds that followed us into short positions have suffered significant losses.”

“If margin calls start coming in, it’ll be quite a show.”

Lionel smirked cynically.

He spoke as if it were nothing.

But for those who actually suffered losses, it must have been devastating.

“An exact tally is difficult, but we estimate that at least several thousand small funds and retail investors have been liquidated.”

With the ECB, the Bank of England, and even the Federal Reserve in motion, there was no time to unwind short positions before forced liquidations.

“Foolish.”

Lionel scoffed briefly.

Of course, without them, such a sharp rebound wouldn’t have occurred.

And their profits wouldn’t have been maximized to this extent.

Then, the woman beside him cautiously added to the report.

“However… among the investors who suffered losses, some forces quickly liquidated their short positions and built long positions instead. We anticipate they’ve made enormous profits from this market rebound.”

“Hmm…?”

Lionel slightly raised his eyebrow.

With the central banks’ sudden intervention, it wasn’t easy to switch sides and catch the timing.

Lionel lightly shrugged his shoulders and shook his head.

“Did they just reap the benefits of our three years of preparation? Lucky bastards.”

Of course, their asset scale wasn’t that large, and since it was only a handful of funds, he didn’t pay much attention.

But…

If he knew that the combined scale of those funds was half the size of the assets they had moved,

and that their return was even higher, he wouldn’t have brushed it off so lightly.

DJ Capital, New York Headquarters Trading Room.

Thunderous cheers shook the trading room as the giant electronic board was filled with numbers.

“Whoaaaaa!”

“Sir, the profits are enormous.”

“Wow, this is truly historic, isn’t it?”

Grant couldn’t help but feel a twinge of regret that they weren’t a formal investment firm today.

There was no doubt that if they could officially announce this achievement, DJ Capital’s status would skyrocket.

“How long until the final profit tally?”

“It’ll take some time, as we need to consolidate all 50 hedge fund accounts.”

Each hedge fund, distributed across third-party dummy corporations (paper companies), was designed to invest through them.

The funds were structured to flow through specific countries in a complex manner.

While making the investments was one thing, an accurate tally would require considerable time.

“Still, thanks to dividing the assets, it seems no one on Wall Street has caught on to us.”

I nodded lightly at Grant’s words.

“That’s why we distributed the assets.”

Not only were we operating smartphones and the core OS almost exclusively,

but platforms like KTalk and SNS, which held vast user information and data, were rapidly growing their user base.

Many countries, especially the U.S. government, were growing wary of me.

If it became known that we were also sweeping up massive dollars through investments, the pushback would be even greater—there was no need to ponder that.

“So, just as now, no one else should know that the assets are distributed.”

Seong-hwan glanced at the trading room beyond the glass and asked,

“But are the traders in there really unaware that we’re managing assets of this scale?”

I quietly set down my coffee cup and answered.

“Yes. That’s how it’s designed.”

Grant nodded and added an explanation.

“All assets are moved under the names of independent legal entities like BlueWave Capital, Marine Hedge Capital, and Trinity Holdings. Traders only received the operational strategy manuals for each fund; the actual ownership and overall fund flow are blocked from them.”

“Moreover…”

I continued.

“These funds were established through seemingly unrelated countries or affiliate structures, and the equity is intricately intertwined. From the outside, they appear to be completely independent, unrelated funds.”

Not entirely, but

Seong-hwan nodded, seeming to understand to some extent.

“So, the traders only execute the strategies for the funds they manage, and the fact that these eventually integrate into one large strategy… only we know that?”

“Exactly.”

I glanced at the electronic board.

“And importantly, thanks to this structure, the scale of funds we move in the market remains hidden. That’s why no one on Wall Street knows we’ve been managing $35 billion.”

Grant added,

“It’s also legally airtight. Each fund is set up with separate GPs (general partners) and LPs (limited partners), and accounting and audits are conducted separately. To trace the whole thing, you’d need tax agreements from at least seven countries and access to beneficial ownership information…”

I picked up where he left off.

“The chances of the U.S. Treasury doing that are close to zero.”

“But couldn’t the Treasury still do it?”

I laughed at Seong-hwan’s question.

“Most of the countries we route funds through are safe havens that even the U.S. struggles to touch.”

“So, the only people who know the full scale of the assets we manage are us here?”

Strictly speaking, the only people who knew the exact structure were myself and Executive Director Oh Seong-hak.

Grant and Lisa only knew the broad outlines.

“Sir, the tally is in.”

Amid our conversation,

Lisa looked at me with an excited expression.

“How much?”

Everyone’s gaze naturally turned to the screen,

and Lisa immediately displayed the compiled data.

“First position, based on the initial investment right after the Brexit announcement.”

[First Investment - Short/Safe Assets]

• Short Position Investment: $25 billion

• Focus: Pound, FTSE100, European financial stocks

• Return: 138%

• Profit: $34.5 billion

• Safe Asset Investment: $10 billion

• Focus: Gold, U.S. Treasuries, Yen

• Return: 19.7%

• Profit: $1.97 billion

Lisa flipped the slide and continued.

“The total profit from the first phase is $36.47 billion. Based on your instructions, sir, we reinvested the full amount into long positions.”

“If we had bet the entire $10 billion in safe assets on shorts, the return would have been even higher. That’s a bit regrettable.”

I shook my head at Seong-hwan’s sigh, as if to say that wasn’t the case.

“Betting on safe assets was not only because we thought they would rise, but also because it served as a hedge for our positions.”

Even with my knowledge of the future, given the high leverage we used, preparation for short-term volatility was absolutely necessary.

“I know. I was just saying it’s a shame.”

“No need to feel that way. We made ample profits after switching to long positions.”

Everyone’s gaze once again focused on the screen.

[Second Investment - Long Position Switch]

• Long Position Investment: $36.47 billion

• Focus: European indices, major financial stocks, Pound, etc.

• Return: 57.8%

• Profit: $21.07 billion

In the silence that fell amid the overwhelming numbers,

Lisa displayed the final slide.

[Final Tally]

• Total Investment Principal: $35 billion

• Total Accumulated Profit: $36.47 billion + $21.07 billion = $57.54 billion

• Total Asset Valuation: $92.54 billion

• Cumulative Return: 164.4%

“Whoaaaaa!”

The room erupted in applause and cheers.

“Wow, over 160% profit in less than two days?”

“The assets have nearly tripled.”

Seong-hwan and Grant couldn’t contain their excitement.

I was just as astonished.

I had expected to make a lot of money from Brexit,

but I never imagined we could make this much so quickly.

“Many investors didn’t anticipate the Bank of England and the ECB would respond this swiftly, which worked in our favor.”

Right after the UK’s Brexit vote,

many self-proclaimed experts predicted chaos on par with a global financial crisis,

and indeed, astronomical amounts of money flowed into short positions after the vote results were announced.

“The speed at which the Pound was falling was truly terrifying.”

Even we, who were short, felt that way.

I couldn’t even imagine the emotions of those who were long.

Grant shook his head, still unable to believe it, and muttered,

“This return will go down as a legend on Wall Street… Over $50 billion in net profit from a single short-term variable like Brexit…”

Lisa nodded beside him and continued,

“Especially the timing of switching to long positions was… perfect. If we had hesitated any longer, the profit would have been more than halved.”

Seong-hwan looked out at the trading room beyond the glass and added,

“Brother, be honest. Did you know the Brexit vote result too?”

My heart skipped a beat for a moment.

I laughed and quickly shook my head.

“…What I knew wasn’t the vote result, but who would move next.”

“Who was it?”

Instead of answering, I pointed to the monitor displaying the breaking news from the ECB and the Bank of England (BOE).

“Those guys.”

Seong-hwan tilted his head but didn’t ask further.

And then,

another breaking news alert appeared.

[Bank of England: Short-term interest rates remain unchanged, additional liquidity supply announced]

[ECB: Liquidity support package for French and German banks announced]