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Mint
3 days ago
- Business
- Mint
Trump's old high school is in trouble (again). Can a Chinese businessman fix it?
For the second time in a decade, it is up to a Chinese entrepreneur to make President Trump's high school great again. Like some of the 20th-century American institutions whose decline Trump laments, the 136-year-old New York Military Academy is in bad shape. Roof tiles are broken on century-old buildings and, on one recent visit, a reporter spotted a family of vultures nestled atop a chimney. The academy sits on a forested campus in Cornwall, N.Y., a Hudson Valley town about 90 minutes' drive north of New York City that is popular for weekend getaways. It is one of the biggest properties in the town of around 13,000. NYMA, which has no government affiliation, is located 6 miles north of the U.S. Military Academy at West Point. The academy's cadets gave off a whiff of the school's glory days at Trump's inaugural parade Jan. 20, marching in their gray uniforms as the president clapped and smiled. But with enrollment of only around 50, it could muster up only about two dozen students for the procession. Now Allen Lu, who built a chain of private schools in China, has stepped in with plans to fix up the school. At a February town-council meeting in Cornwall, a person who identified himself as Linsen Zhang said that the school had a change of ownership and that the new owner was a 'visionary on education." He said the new leadership would eventually increase the student population to 1,500. Lu is the second Chinese magnate to attempt a turnaround at the school where Trump spent five years and graduated in 1964—and Lu will have to do it in the face of the worst U.S.-China tensions this century. Vincent Tianquan Mo, whose company in China operates a Zillow-like real-estate site, rescued the academy from bankruptcy a decade ago. A nonprofit controlled by Mo bought the land and buildings at the campus for $15.8 million, and Mo said in 2016 he was committed to making NYMA a 'super school again." But eight years after Mo's purchase, NYMA had racked up $7.8 million in liabilities, according to the latest tax filing by the operating entity of the school. The pandemic took a toll on enrollment and finances, previous years' filings show. The school's ownership structure is particularly complicated and opaque, involving money flows from China to the U.S. at a time when it can be challenging for a Chinese entrepreneur to take money out of his nation and where American regulations on tax and education invite their own complexities. Some in Cornwall have wondered about the future of the crumbling institution at the edge of downtown and whether its tax-exempt status is good for the town. 'I didn't like the idea that this large property is not contributing to the pie," said Ezra Zohar, who grew up in town and has told local council meetings that Cornwall should reap benefits from NYMA's tax breaks. Neither the school nor Mo or Lu, the tycoons who have run it and who are both on the board of trustees, responded to questions. NYMA said it is 'in the midst of a critical transformation" to revitalize its campus, enrich the curriculum and build a vibrant future under the direction of the restructured board of trustees. The 136-year-old New York Military Academy had more than 500 students in the 1960s compared with about 50 for the New York Military Academy at the edge of campus. The school has a storied history, having educated luminaries such as Broadway composer Stephen Sondheim and director Francis Ford Coppola, and in the 1960s it had more than 500 students. In 'The Art of the Deal," Trump said he wasn't thrilled when his father decided to send him to military school at age 13, but 'I learned a lot about discipline, and about channeling my aggression into achievement." Trump also referred to the school on Memorial Day weekend, delivering the commencement speech to West Point's 2025 graduates. 'This is a beautiful place,' the president began. He added, 'I have been here many times, going to high school not so far away. A good place. Also a military academy. Not quite of this distinction. But it was a lot of fun for me." Later in an email statement, White House communications director Steven Cheung said, 'President Trump is proud of his time at the New York Military Academy. He learned important virtues that helped him become one of the greatest businessmen in the world and ultimately president of the United States twice." One of the first press notices of the future president came in December 1963, when the front page of the Cornwall Local showed a photo of a U.S. Army major general visiting a group of academy cadets including 'Cadet Captain Donald J. Trump," shown in full dress uniform with thick white cross belts and white gloves. But the school suffered along with the declining popularity of military-style education. It filed for Chapter 11 bankruptcy protection in 2015 and was on the verge of closing permanently when Mo stepped in. The Chinese magnate was at the top of his career. Not long before his land purchase, he had made it to Forbes's billionaires list for the first and only time, with his net worth pegged at $1.9 billion in 2014. His New York Stock Exchange-listed company ran one of China's largest real-estate listing and search websites. Real-estate brokers say buying schools abroad is a popular way for wealthy Chinese to invest outside the country because it doesn't require the Chinese government review that commercial real-estate investments abroad would normally receive. Vincent Tianquan Mo, pictured in 2014, rescued the New York Military Academy from bankruptcy a decade ago. Mo said he intended to revive the school and brought in a new superintendent. In a roundtable discussion in China held in January 2024, Mo joked about the timing of his deal, a year before Trump was first elected. 'We bought the New York Military Academy. That's where Trump went to school for five years," he said. 'People said, 'You guys predicted it well.'" One nonprofit with Mo as head of the board has operated the academy, while an additional nonprofit, called the Research Center on Natural Conservation, owns the land and buildings at the academy. The latter nonprofit, which is controlled by Mo and his family, also owns the 100,000-square-foot Arden House on 450 acres in Harriman, N.Y., where New York's blue-blooded Harriman family long had its countryside estate. During the Mo years, the two nonprofits borrowed heavily from Mo's for-profit entities, according to an analysis of both nonprofits' tax filings. The nonprofit operating the school had negative net assets of $5.8 million as of June 2023, the most recent information available, meaning it had more liabilities than assets. The Research Center on Natural Conservation had negative net assets of $21 million at the end of 2023, according to a tax filing. Accounting specialists not involved with the school described the transactions as unusual. Most U.S. nonprofits avoid letting debt outweigh assets and rely on funding from donors. The Research Center on Natural Conservation has said in its Internal Revenue Service filings that it will research preservation of the environment, including issues like global warming, and promote environmental issues, though it is unclear how those goals are satisfied by owning historic properties. The IRS filing specifically says the center won't operate a school; and indeed, NYMA is a separate legal entity. 'Nonprofits, because of the public subsidies they receive, owe it to the public to be very transparent about what they're doing and why," said Thad Calabrese, a professor at New York University who specializes in nonprofit financial management, adding that tax breaks are a form of government support. The school drew a different kind of attention in Congress from then-Rep. Michael Waltz (R., Fla.), who expressed concern in a 2023 letter to then-Defense Secretary Lloyd Austin about activities at a Chinese-controlled school so close to U.S. defense installations. Waltz served briefly earlier this year as Trump's national security adviser. Under Mo, locals said the dilapidation of the school and its property continued, and enrollment fell even further during the pandemic. On visits this year, rusted army cannons marking the school entrance sat on deflated tires and a brick pedestal appeared to once display a statue. Grass sprouted through cracked tennis court pavement near the Troop D Stables where all cadets once learned horsemanship. Rusted flagpoles stood unused in front of the ashen walls of the 1970s-era Dickinson Hall. And the yellow paint was faded on the 275-foot long Jones Barracks built as a main campus structure after a 1910 fire. Dilapidated tennis courts at the New York Military academy says it is revitalizing its campus, enriching the curriculum and building a vibrant future under its new board. Lu, the new investor who is also known as Lu Yuzong, holds a Ph.D. in finance from China's Fudan University and founded Shanghai-based Guanghua Education Group. Unlike Mo, the 56-year-old Lu is a veteran school operator, owning more than a dozen private schools in China. In China, the overwhelming majority of students attend public schools, where the curriculum is approved by the Ministry of Education and directs the brightest students toward preparing for college entrance exams heavy on rote memorization. Lu's private schools instead say they aim to foster critical thinking that will help students excel at foreign universities, particularly those in the U.K. and the U.S. Lu's company said in February this year that its students had received 20 offer letters from the University of Oxford and 37 from the University of Cambridge in the past academic year. Lu has given almost no media interviews, even in China, but in 2017 he told a magazine featuring successful Fudan University alumni that he wanted to reform Chinese education and provide students and parents with alternatives to public schools. Lu is now chairman of the board of trustees at the New York Military Academy, according to its website. Two of his associates from Guanghua also hold seats on the five-member board, and Mo retains his trustee seat. The status of the transfer of power couldn't be determined, and county real-estate records don't show any transfer of the land and buildings at the academy from the nonprofit controlled by Mo and his family. Ahead of graduation in June, fresh indications of attention to the school grounds included new slats to repair a toppled section of fence. Posters advertised an athletic competition and drone training, carrying the tagline 'Inspire Leaders for Tomorrow." Zhang, Lu's associate, said at the February meeting: 'We are here to make the commitment to fixing everything." Write to Rebecca Feng at and James T. Areddy at
Yahoo
28-02-2025
- Business
- Yahoo
Hedge funds bet on turnaround in unloved China property sector
By Summer Zhen and Jiaxing Li HONG KONG (Reuters) - Some large hedge funds and investors are accumulating long-shunned China property stocks at low prices, anticipating lucrative returns when the sector recovers from its prolonged crisis. Investors said recent positive signs, from improving home prices in top cities to industry leader China Vanke's recapitalization plan, suggest this year will be the turning point for the real estate market. To be sure, they are selective and have set their sights on leading state-backed homebuilders and China's largest online property brokerage. "We have added some large state-owned developers recently, based on the logic of sector turnaround and winners take all," said Wang Qing, chairman at Shanghai Chongyang Investment Management, which runs $5 billion. "Land sales are recovering in first-tier cities, and we noticed that only these few real estate developers are still actively buying land," he said, adding that meant these builders were taking a larger market share. Chinese property has been a top short-selling target through the debt-ridden sector's downturn for more than three years and as a raft of privately-owned property giants, including Evergrande and Sunac China, went bankrupt. The shift in sentiment indicates investors are rebuilding confidence in the sector after the industry consolidation and massive measures introduced by China since September to stabilize the slumping housing market. Hong Kong-based Golden Nest Capital is also dipping into shares of some state-owned developers. "You could say that the sales volume of new homes has declined by half, but the number of developers has decreased even more," said Stanley Tao, CIO at Golden Nest Capital Management. As the sector stabilizes, the rebound in these overlooked stocks will be significant, Tao said. Hong Kong-listed mainland property stocks surged more than 15% this month, making it one of the top performing sectors just behind tech stocks. FUNDS BUY KE HOLDINGS KE Holdings, China's Zillow-like real estate platform, has become a darling among Asia's top hedge funds. Hong Kong's $9 billion Aspex Management built new positions in U.S.-listed KE Holdings by adding 6.51 million shares in the fourth quarter of 2024 with a market value of about $120 million as of the end of 2024, according to its filing with the U.S. Securities and Exchange Commission. WT Asset Management, which manages $4 billion, boosted its stake in KE Holdings by 2.2 million shares worth more than $40 million in the fourth quarter as well. KE Holdings is benefiting from robust sales of secondary homes in big cities after the Lunar New Year and tech advancements, Griffin Chan, a property analyst at Citi Research said in a note this week. Cash-strapped top homebuilder Vanke's bailout by the government in early February further boosted sentiment as many view it as a landmark event that greatly reduces the risk of defaults by another major developer. Shares of KE Holdings and property developers rebounded sharply in February, although many have lost more than 80% over the past three years. "I do think we are close to a turning point on property stocks," said Jon Withaar, head of Asia special situations at Pictet Asset Management. Jon said his entry into property stocks depends on whether there will be more government-backed restructuring and on property price trends. Obviously, the recovery is at the initial stage, and many smaller cities are still struggling with unsold homes. Investors remain divided on the outlook for real estate. "It's more about trading opportunities," said Wang Qi, CIO at UOB Kay Hian Wealth Management. "It's like a flash in the pan, but even a flash in the pan might present three to six months of opportunity. These stocks are very cheap and could rise 50% - that's normal," he said. Sign in to access your portfolio
Reuters
27-02-2025
- Business
- Reuters
Hedge funds bet on turnaround in unloved China property sector
HONG KONG, Feb 27 (Reuters) - Some large hedge funds and investors are accumulating long-shunned China property stocks at low prices, anticipating lucrative returns when the sector recovers from its prolonged crisis. Investors said recent positive signs, from improving home prices in top cities to industry leader China Vanke's recapitalization plan, suggest this year will be the turning point for the real estate market. To be sure, they are selective and have set their sights on leading state-backed homebuilders and China's largest online property brokerage. "We have added some large state-owned developers recently, based on the logic of sector turnaround and winners take all," said Wang Qing, chairman at Shanghai Chongyang Investment Management, which runs $5 billion. "Land sales are recovering in first-tier cities, and we noticed that only these few real estate developers are still actively buying land," he said, adding that meant these builders were taking a larger market share. Chinese property has been a top short-selling target through the debt-ridden sector's downturn for more than three years and as a raft of privately-owned property giants, including Evergrande and Sunac China, went bankrupt. The shift in sentiment indicates investors are rebuilding confidence in the sector after the industry consolidation and massive measures introduced by China since September to stabilize the slumping housing market. Hong Kong-based Golden Nest Capital is also dipping into shares of some state-owned developers. "You could say that the sales volume of new homes has declined by half, but the number of developers has decreased even more," said Stanley Tao, CIO at Golden Nest Capital Management. As the sector stabilizes, the rebound in these overlooked stocks will be significant, Tao said. Hong Kong-listed mainland property stocks surged more than 15% this month, making it one of the top performing sectors just behind tech stocks. KE Holdings , , China's Zillow-like real estate platform, has become a darling among Asia's top hedge funds. Hong Kong's $9 billion Aspex Management built new positions in U.S.-listed KE Holdings by adding 6.51 million shares in the fourth quarter of 2024 with a market value of about $120 million as of the end of 2024, according to its filing with the U.S. Securities and Exchange Commission. WT Asset Management, which manages $4 billion, boosted its stake in KE Holdings by 2.2 million shares worth more than $40 million in the fourth quarter as well. KE Holdings is benefiting from robust sales of secondary homes in big cities after the Lunar New Year and tech advancements, Griffin Chan, a property analyst at Citi Research said in a note this week. Cash-strapped top homebuilder Vanke's bailout by the government in early February further boosted sentiment as many view it as a landmark event that greatly reduces the risk of defaults by another major developer. Shares of KE Holdings and property developers rebounded sharply in February, although many have lost more than 80% over the past three years. "I do think we are close to a turning point on property stocks," said Jon Withaar, head of Asia special situations at Pictet Asset Management. Jon said his entry into property stocks depends on whether there will be more government-backed restructuring and on property price trends. Obviously, the recovery is at the initial stage, and many smaller cities are still struggling with unsold homes. Investors remain divided on the outlook for real estate. "It's more about trading opportunities," said Wang Qi, CIO at UOB Kay Hian Wealth Management. "It's like a flash in the pan, but even a flash in the pan might present three to six months of opportunity. These stocks are very cheap and could rise 50% - that's normal," he said.
