Larry Zhou shares Link Capital's vision and strategy as well as sensible investing advice
Link Capital Finance was founded only seven years ago, but the company’s success and managing partner Larry Zhou’s accolade as one of MPA’s Top Commercial Brokers in 2022 are sufficient proof of a remarkable ability to compete against older and bigger industry players. In this interview, Zhou said that the motivation for creating Link Capital was simply “to create a business environment where we can have customers for life”.
Link Capital’s flat structure, as opposed to the structure of corporate-sized brokerages such as those in major banks, ensures clients can prosper with the company instead of being transferred to a different lending division when they have achieved a certain level of growth. For Zhou and his business partner Jeremy, setting up their own brokerage means freedom from bank segmentation rules and having the opportunity to maintain relationships throughout their clients’ business lifecycles.
What differentiates Link Capital from its competitors? Zhou summed up a number of areas that the company excels in.
“Firstly, we have an excellent track record and help our clients grow quickly and sustainably. We identify with our clients’ core values and long-term strategies very early in the business cycle,” he said. “Our clients cut across [multiple] sectors. Property development is a great sector for us in terms of how many wins we’ve had. Medical industries have been great for us, [and so are] construction, manufacturing, and lately, professional services. [The] same philosophy extends to our commercial and residential investors.”
He added that having a simple approach to growth – that is, “to understand and be a part of our clients’ growth strategy” – has worked to Link Capital’s advantage. The company also delivers credit advice in a “succinct, digestible, and commercially practical” form instead of providing excessive information that leaves customers feeling frustrated and confused. In this particular aspect, less is more.
Considering current economic issues, Zhou noted how the public is much more aware of high inflation eroding the value of their cash and how investors are more drawn to alternative assets.
“In the current environment, you can’t play 100% safe and still expect to beat the impact of inflation. So, investors and businesses now are showing much stronger preference to hold asset classes like equities and property, and, as a result, much less cash,” he said.
As Zhou has observed, customers are much more willing to take on debt and credit leverage is often the key factor in their property transactions. The reason is that most commercial properties bring higher yields and the return on equity is better on a leverage basis. While cash is turning into a liability because of its decreasing value, debt is becoming an asset when structured and managed correctly, he said.
As interest rates move upwards and asset prices fluctuate, his advice for investors and enterprises is to “structure debts correctly and sustainably build a safety margin for rate rises”. Another suggestion is to have a long-term view and focus on the quality of the assets they are acquiring rather than simply trying to predict the market’s short-term direction.
“Ultimately, building a portfolio of solid assets through the right vehicles and making good investment decisions [in the] long term will beat any short-term gain from speculating in the market,” he concluded.
Watch the full interview here
