Case Study Of The Investment Collective Trust Plan Of ZLC Xuchang Project

Since the promulgation of the “new specifications for assets management”(1)in March 2018,the trust industry has been confronted with the pressure of strict supervision and business transformation.The models of the traditional trust business have been challenged.How to transform trust business into the orientation such as active management,service-oriented trust,standard trust and high-end wealth management in line with trust ultimate source has become a problem that trust industry has to face and has to be settled urgently at present.Real estate trust business is one of the important businesses of trust companies.By the end of the year 2019,the balance of trust asset size invested in the real estate field was RMB 2.70 trillion,accounting for 15.07 percent(2)of the total size of trust assets.Since 2018,under the guidance of macroscopic readjustment and control in “housing residence instead of vicious speculation” and “de-leveraging”,particularly in May 2019,the release of A Notice on the Work of Carrying out “Consolidating the achievements of governing chaotic phenomena and facilitating the construction of compliance”(Called in the Industry as “No.23 Document”)of China Banking Regulatory Commission(CBRC)has further tightened financing policies for real estate enterprises.Equity investment has become the real estate earlier stage financing transaction mode of trust companies with the only compliance at present.The investment collective trust plan of ZLC Xuchang project(hereinafter referred to as this case)is both the first order equity investment collective trust product of ZY trust company and the first order real equity investment collective trust product of this trust company after the release of the “the new specifications for assets management”,with innovation and representativeness.Based on the description of the setting up background,trust plan as well as the object for this case,this article carries out detailed analysis on the project value,structure of deal,risk control measures as well as the process of the investment decision-making and so forth of this case.In this case,the equity investment method is fit for the real estate earlier stage financing market under policy of regulatory control,the counterparties with excellent credit and the object projects with better qualification;The deal structure design of trust plan is scientific and flexible,adopting the trust capital trading manner of the investment loan linkage,multi-trust deadline design and fixed plus floating trust income arrangement;the risk control measures are adequate and proper,the credit risk is adopted to control by multiple guarantees,the market as well as operational risk are controlled by closed-off management,the policy and operational risk are controlled by cautious execution of duties,and the risk control characteristics of debt financing with fully secured liability are obvious;the investment decision-making process is normative and the investment decision-making is rigorous and cautious.By means of the analysis and study on this case,this article comes up with some suggestions on the respects of enterprise development,professional ability building,the selection of the counterparties and product design.Trust companies should abide by the guidance of national real estate control and financial regulation,and vigorously develop the trust business of the real estate equity investment.Real estate trust financing should transform to equity value investing.We shall cultivate and promote the active management ability,and actively propel the real estate enterprises to take the initiative to deleverage;we shall strengthen the trust companies' professional ability building through cultivating the concept of equity investment,expanding the customer marketing capability and cultivating professional talents;to carry out the real estate equity investment,we shall lay emphasis on the selection of the counterparties,the point is to judge the operation keyboard,the project management level and the object project qualification of counterparties;in terms of the trust product design,we shall attach importance to the compliance of products,and the comprehensiveness and proportionality of product risk control measures.At the same time,we shall cater to the requirements of the customers.Equity financing will be the major development direction of real estate financing development and transformation in the future.The study on this case has important theoretical and practical significance for driving the standardized development of real estate equity investment trust business and promoting the business transformation and upgrading of trust companies.