Primus Fund (3)
The next morning.
The moment I got to work, Senior Dongho hauled me into the break room.
"Did you buy any of that RedHole Studio stock you mentioned back then?"
"Yes. I did."
"Seriously? Have you checked the price?"
"Not yet."
At the thought, I opened the OTC market on my smartphone and checked the quote right away. The stock I had bought at 6,500 won a share was already up to 134,000 won. In just a few days, it had gone up more than twentyfold.
Senior Dongho let out a scream of despair.
"I should have bought even a little when you told me!"
I looked at him, speechless.
"What are you talking about? When you asked me then, you told me not to buy that junk stock."
"Who could have known the new game would blow up this hard?! Everyone's saying it's a monster hit!"
"It is a monster hit."
RedHole Studio's game was Battle Island. In most FPS games, you complete a specific mission or fight one-on-one or in team battles. Battle Island, however, used a battle royale format: a crowd of players, not NPCs, fought until only one was left standing.
At launch, it drew plenty of criticism. It was a game for adults only, which was one problem, but the bigger issue was how absurdly demanding it was on hardware.
And then the new idea worked.
The arrival of an FPS that played by entirely different rules sent gamers into a frenzy. With almost no marketing at all, it became a runaway smash purely through word of mouth, knocked OverClock off the throne, and climbed to number one in PC café market share.
In the entire game industry, this was the kind of once-in-several-years monster hit people talked about for ages. And it had come not from a giant publisher, but from a small unlisted studio.
RedHole Studio was suddenly at the center of everyone's attention. A company that had been worrying about restructuring only a little while ago was now in a position where it needed to hire more people and throw a bonus party.
As a result, the stock price kept soaring, and shares of the unlisted company dried up on the private stock exchange. Nobody wanted to sell, and buyers lined up around the block.
"If you had inside information, you should've told me!"
"I did tell you."
"How much did you buy?"
"Five million won."
Senior Dongho's jaw dropped.
"H-Holy crap. Then you're already past a hundred million won now!"
These days, judging by the photos people post on social media, you'd think everyone had about a billion won sitting at home, but even a hundred million was a huge sum for an office worker.
Apparently, this was the thrill of investing in unlisted stocks.
"Who did you hear this from?"
I couldn't exactly tell him I'd seen it in the future, so I gave him a rough excuse.
"A friend who works at a game company."
"Then ask that friend whether it's still okay to buy now."
"Shouldn't customers be asking analysts that sort of thing?"
Senior Dongho shook his head hard.
"No. I know because I am an analyst, and every last one of these guys is a fraud. Hell, my own stocks are down forty percent right now. The stock I bought at 80,000 won has already fallen below 50,000! There's someone trapped on the eightieth floor, and the rescue team isn't even coming!"
People often think that if you're in finance, you must be good at investing in stocks. But that is a huge misconception.
If that were true, every securities employee would be a billionaire by now.
They said a famous analyst who appeared on financial TV every day, recommending stocks that kept soaring until people called him Midas's hand, had actually ruined his own investments and even sold his apartment.
Senior Dongho was still staring at me in disbelief.
"Man! How does five million won turn into a hundred million in just two weeks? I've never seen anything like it."
I patted him on the shoulder.
"You'll be seeing it a lot from now on."
I had made money, but I couldn't let myself celebrate. The more certain I became that I had truly gone back in time, the faster I needed to solve the Primus Fund problem.
After putting together my materials, I headed to the manager's office.
Yoon Yeong-cheol greeted me with a smile.
"Oh? So, have you finished the materials?"
"I think it'd be better if you took a look yourself first."
He took the papers I handed him and started flipping through them one by one. His expression changed with every page.
"What is this?"
What I had prepared was not a fund recommendation report, but a report pointing out a problem.
"I think there may be something wrong with Primus Fund."
"What kind of problem?"
"It claims to invest only in highly stable bonds, but the returns are far too high."
"Interest rates across the developed world have been falling for years. If a bond fund like Primus Fund is making decent returns, isn't that only natural?"
Bond yields and interest rates move in opposite directions. When rates fall, bond prices rise; when rates rise, bond prices fall.
"But it made the same returns even in years when rates were rising. It posted steady gains every year regardless of market conditions, yet the actual trading records aren't shown."
"That's only natural. No one wants to expose their positions."
That part was true enough. No fund manager wanted to reveal exactly what they had bought, when, and in what size.
"As you'll see if you look over the materials I organized, its returns are about one percent higher than those of other funds investing in similar products."
One percent might sound like nothing, but if another fund made five percent and this one made six, that was a twenty percent increase in relative terms.
In investing, it was common knowledge that safety and returns were inversely related. There was no such thing as a product that was both exceptionally safe and highly profitable.
Even if differences opened up temporarily depending on market conditions, they were usually closed again before long.
As he listened, Yoon Yeong-cheol's face gradually hardened.
He leaned back in his chair and asked, "So what are you suggesting we do about it?"
"I think we need to verify whether the asset manager really invested the fund's assets in those bonds, or whether they were inflating the returns."
"How? Should we ask them to submit their holdings and transaction history?"
What would a liar say if you asked him whether he'd lied?
He'd obviously say he hadn't.
"We need to check it ourselves."
"You want us to audit the asset manager? DA Securities is the seller, not the Financial Supervisory Service?"
"It's being sold exclusively through us, and the fund is huge. If there really is hidden trouble, the blowback could hit DA Securities."
Yoon Yeong-cheol gave me a cold look.
"Hey, Han Miru. How long have you even been here?"
"Six months now."
The moment I finished answering, he snapped, "A rookie who's only been here half a year thinks he knows enough to cause a scene? Just do what you're told. I asked you to make a fund recommendation report, so why are you doing something useless like this? Do you think this company is a joke?"
"Well... "
So he was still the same.
I had expected this from the start. There was no way he'd accept a report that had already been shredded back when the suspicion first surfaced.
I was practically thrown out of his office.
The shouting must have carried outside, because everyone stopped what they were doing and stared at me.
Senior Dongho at least got me out of there first.
"What did you say to make the manager that angry?"
"I only told him I thought there might be a problem with Primus Fund."
Senior Dongho looked startled.
"What do you mean? What's wrong with Primus Fund?"
"Its returns are far too high compared with other funds of a similar type."
I summarized what I had told the manager.
Senior Dongho tilted his head.
"Isn't it normal for asset managers to inflate performance before they start selling a fund?"
Who would want to subscribe to a fund that was losing money?
The better the performance looked, the easier the fund was to sell, so while gathering investors, asset managers did everything they could to mark their holdings as high as possible and inflate returns.
"I'm not just talking about inflated returns. There's also the possibility that Primus Fund is hiding bad assets."
Senior Dongho looked at me as if he couldn't make sense of a word I was saying.
"What are you talking about? They only invest in AAA-rated bonds issued by public institutions in developed countries. Are you saying those bonds are bad?"
If a bond was rated triple-A, it was generally safe unless the country itself collapsed.
"What if Primus Fund wasn't buying those assets in the first place?"
"Huh?"
"What if they claimed they were investing in receivables from public institutions, when in reality they were buying private placement bonds from failing companies and losing money on them?"
"Private placement bonds, not public ones? Why would anyone buy private bonds from companies like that?"
"Because the returns are bigger. In the case of mezzanine investments, there could be extra upside too."
Mezzanine usually refers to CBs, or convertible bonds, and BWs, or bonds with warrants attached.
They're bonds, but since they also grant the right to convert into shares later or receive new shares, they can generate huge profits when stock prices are rising. If an unlisted company goes public, making tens of times your money is possible.
After listening to me, Senior Dongho stared back with an expression of pure disbelief.
"What kind of nonsense is that? Does that even make sense?"
"... "
That was the normal reaction.
Everyone had thought exactly the same thing until it blew up. If I hadn't known better, I would have reacted the same way.
How was I supposed to get this across?
Honestly, I could always just quit the company and walk away. Since I hadn't written the fund recommendation report yet, I wouldn't be responsible for any mistake or fallout right now anyway.
But even if I quit, someone else would write the report, and Primus Fund would keep being sold.
Then the exact same thing would happen all over again.
I looked at Senior Dongho.
He had been the one to haul me through the smoke when I could barely keep myself on my feet. We had both survived because of that, but Senior Dongho had been left with a permanent disability he would carry for the rest of his life. If he had left me behind and escaped on his own, he wouldn't have been hurt.
I brought it up carefully.
"Senior, do you ever think about quitting the company?"
"Out of nowhere?"
"I'm just asking."
"Do you know what my goal in this job is?"
"What is it?"
"To work here until mandatory retirement and leave with everything packed tight."
It sounded modest, but in a way it was a harder goal than becoming a CEO. These days, unless you're a civil servant, it's not easy to retire at the mandatory age.
Senior Dongho drove the point home. "I'm going to die here."
"...Don't say that."
It might not have been a figure of speech at all. He could really end up buried at the company.
If the same thing happened again, there was no guarantee he'd survive this time. If I didn't want to see this senior die, I had to resolve this fast.
After being chewed out from the morning onward, I felt like going home and calling it a day. Fortunately, Yoon Yeong-cheol left on an external appointment right away. Back at my desk, I spun a pen around my fingers and thought.
Should I just expose it and walk away?
But to expose bad assets, I needed evidence strong enough to back it up.
Asset managers who made money through short selling or put options would churn out reports pointing to accounting fraud or hidden losses at specific companies and lower their target prices. Most of those reports, though, ended up buried without a trace.
Unless I was a department head, who would believe a lone rookie making noise?
In any case, if it was a scam, the problem was going to explode sooner or later. But there was no way I could keep working here until then.
After finishing my thoughts, I headed to the Risk Management Department on the seventh floor.
If there was a department that brought money into a securities firm, there was also one that backed it up and supported it.
If trading and research were the front line, risk management was the rear guard. Its main job was to monitor losses and transactions.
Because financial companies handled huge sums of money, accidents and scandals involving cash happened all the time. There was no place in the world quite as full of scammers as the financial sector.
To put it coldly, the line between an expert and a con artist was razor thin.
Some investment strategies were practically scams, and some traders even worked with market manipulators to rig stock prices.
Finding things like that was what the Risk Management Department was for.
Since that was its role, it didn't have much contact with the other departments. It wasn't even directly connected to Research.
In situations like this, the only people you could really count on were your peers, I supposed.
Peeking my head into the department, I caught the eye of someone I knew and gave a small wave.
"Yoon-ah."
Sung Yoon-ah looked up and smiled at me.
"Oh! Miru. What's up?"
She wasn't dressed up in any special way, yet she still managed to stand out. But that wasn't what mattered right now.
There were plenty of men and women in dramas who wasted their time on workplace romance; I had no intention of doing anything but working.
"Do you have a minute to talk?"
She glanced at her wristwatch and said, "It's almost lunch time."
"Then why don't we grab lunch together?"
As soon as I said it, I realized it might sound like I was hitting on her for no reason.
I hurriedly added, "Ah! It's not for anything like that. It's work-related."
She nodded.
"Sure. I get to choose the menu, right?"