Clearly it’s my charisma. That and the fact that the world’s largest organised crime organisations are collectively raiding their piggy banks on a scale they’ve never done before.
I HAVE a date. Well, not exactly a date. I’m meeting Two Livers for drinks. This is potentially dangerous because I still don’t know what’s going on in her head. Besides, she can famously drink for England, whereas I can’t – I might manage Wales – and I’ve convinced myself that for the first time in my life I’m in love. I’ve also stolen her secretary.
I’ve decided that up to now I’ve been a user of women in the same way that I’m a user of Class A drugs – though arguably women do you more harm. Moments of ecstasy followed by huge downers, emotional and physical exhaustion, and a profound sense of emptiness. How many times have I asked myself: is that it? Is that what it’s all about? And then there’s that dangerous precipice, where you find yourself wondering if it could get any better – if you just went that little bit further, were a little more daring, greedier, more hedonistic – and of course you step forward and find yourself plunging into the void …
But now the scales have fallen from my eyes. I may have been an emotional cripple all my life, but suddenly I can walk, run, dance, sing and play the banjo. At least that’s how I’m feeling after snorting a couple of preparatory lines, washed down with half a bottle of Krug.
We’re meeting at Nah, a new club near Sloane Square started by a couple of ‘It girls’ who appear in all the right magazines but probably don’t have two brain cells to rub together between them. It claims to offer the finest selection of vintage champagne served by the glass anywhere in London. Stupid idea. Why would anyone want vintage champagne by the glass?
From the outside it looks like a disused vehicle workshop with doormen out the front and a crowd of paparazzi hanging around. On the inside it looks like a disused vehicle workshop with a bar at one end and a DJ at the other on a raised platform. The music is so loud that I wonder what we’ll actually be able to say to each other, but perhaps that’s the idea. It was her choice. Everywhere I look there seem to be teenage girls in pussy-pelmet micro skirts and crop tops, with spiky hair and unhealthily pale skin – must be the effect of the light – and guys with earrings in torn jeans and muscle vests, also spiky haired and pale skinned. Have I come to the right place? I’m still wearing my suit, never thought to change; I don’t think my skin’s pale enough and I have no hair gel. I wouldn’t normally care, but coming into this place makes me feel Jurassic.
I order a bottle of Cristal and two glasses, and place myself at a corner table overlooking the dance floor.
Two Livers keeps me waiting twenty minutes before appearing, wearing skintight leather pants, a white cotton off-the-shoulder blouse and bangles by Kiki. She’s had her hair cut radically short and it makes her look even younger. She kisses me on the cheeks when she arrives and I capture the briefest hint of Un Bois Vanille by Serge Lutens. I want to pull her to the floor and devour her, but this is not the place.
‘You look fantastic. Champagne?’ I have to raise my voice to be heard.
She nods and looks around. ‘Crap location. Won’t last. I give it three months.’
I nod back. There’s not much we can do besides nodding and shouting the occasional remark, and we default to looking at the dancers and people-watching as the evening warms up and a few well-known faces appear.
Since we aren’t really talking, I try to work out what we are doing. After a while I think I get it. We’re hanging out. Just being together. The way we used to. Sometimes we’d talk endlessly, other times hardly at all. We didn’t need to. Does it feel the same now? Not to me. I’m too nervous, sweating under my arms, my mouth a little too dry, and the champagne doesn’t really help.
After a while she stands and pulls me up on to the dance floor. It’s some techno number and I do my best to copy the kids but it really isn’t me. She loses herself completely in a routine I’ve never seen her do before and it only makes me realise the distance that’s grown between us.
When we get back to our seats she pulls me towards her. ‘You weren’t as bad as I thought.’ And she plants a moist kiss on my lips, then gets up again before I can respond and heads to the powder room.
When she returns she looks as if she’s done a couple of lines: her pupils are dilated and she has a slight delicious sheen of perspiration on her face – the sort I used to lick off her in the old days.
‘Do you want to eat? I booked a couple of places just in case.’
She shakes her head. ‘Let’s dance again.’
It’s not my sort of evening at all, but at least the second time we dance it’s a slower number and I get the chance to put my arms around her and we can move together and I can inhale her scent. We end up back at our table with a second bottle, and then, because she really can drink for England, a third. I finally get it. We’re hangin’ and chillin’ and seeing if the vibe is still there. After three bottles and quite a lot of coke, I think it is.
There’s a commotion at the entrance. I can’t hear what’s going on because of the music, but I can see a group of huge men in suits with dark glasses talking to the doormen and pointing towards me. The doormen aren’t small, but the new arrivals are a good head and shoulders taller.
Two Livers looks at them. ‘What’s going on over there? Who are those guys?’
‘DLR Strummer. They’re my lawyers.’
‘Your lawyers? Are you serious? What are you doing?’
‘We’ve done our first closing. I need everything ready for an investment committee tomorrow. My first.’
‘Your first closing? So soon? Fantastic. How much did you raise?’
‘Eighteen billion dollars.’
She looks at me, wide-eyed, amazed. ‘Eighteen billion? Dave, no one raises eighteen billion for a first fund. You’re lucky to raise anything.’
I shrug modestly. ‘I have friends. I know a few people. I got lucky.’
She’s eyeing me suspiciously. ‘No one gets that lucky. Where did that money really come from?’
‘Private banks, wealth managers, family offices, the usual.’
She’s looking at me differently now, and I don’t see this as positive. ‘So what are you really doing?’
The lawyers are moving across the dance floor towards us, the dancers parting before them like waves before a battleship.
‘What am I doing? Taking over the world. Well, the markets anyway. Global domination, starts tomorrow.’
I NEVER got to go back to her place. I knew I wouldn’t. But I had to hope. When my legal team reached us with a stack of documents urgently requiring my signature, she used the opportunity to say goodnight, gave me the briefest of kisses on the cheek and went, turning heads and twisting a dagger in my heart.
I’m tired, lovesick but determined, and I have convened my first investment committee.
The office is different now. The traders have all gone, fired on very attractive terms and released from their period of notice so they can start work straight away with Mike Fisher to set up Caveman II somewhere around the corner. I’d have liked to have kept them, or some of them at any rate, but I can’t have anyone on the inside that I can’t trust totally. So I set them loose to start again. It’ll take them months, maybe even a year, but I wish them well. I don’t have that kind of time to play with.
In the meantime, I have a newly assembled elite team selected from among the friends and family of my backers. I insisted they all have some kind of relevant financial background, ideally that they’d trained at a major firm and knew what they were doing. In the end I got some technically competent people, but most of all I got people I can trust, all of whom are overseen by Maria, who sits in my outer office, probably wondering what on earth is going on but staying focussed by thinking about that million pound bonus at year end.
Around the table in my office I have the members of my investment committee. Carlos, inevitably, has to be there himself. Beside hi
m, six others, ethnically diverse – we definitely tick the PC box big time – representing financial interests from China, the Middle East, Africa, Central and South America and Europe’s Garlic Belt. They don’t all look especially comfortable in suits and ties, and I’m not sure how great their understanding is of enterprise value or price earnings ratios, but their hearts – and wallets – are in the right place.
In a sense what we are going to do is the twenty-first century’s answer to the buccaneers of the Elizabethan age. But whereas they set sail with cannons and cutlasses, we have computer screens and networks of trusted associates. We don’t need violence. We just need money and brainpower. I guess it’s progress.
I take my place at the end of the glass table, look around and clear my throat. I feel something’s missing. Like a large, long-haired white cat sitting on my lap for me to stroke. Get a grip, Hart.
‘Gentlemen, welcome to the inaugural investment committee of the Salvation Fund. The first item to note is that we completed our first closing on Tuesday with eighteen billion dollars in the bank. We have arranged dedicated credit lines to be secured against the holdings we acquire, which should allow us to take very much larger positions than just eighteen billion. And, of course, we’ll be using derivatives and option strategies to maximise impact and achieve the greatest possible leverage.’ I’ve tried to
keep it simple but I can tell I’ve already lost most of them. ‘With the support that should be available to us from … associated funds and investors, we should be able to move most markets. So, the world is our oyster. Where shall we go first?’
It takes an hour, and it’s hardly the best informed discussion I’ve ever heard, but by the end we’re all agreed. We reject Li Bing’s proposal – short airline stocks and insurance companies and then start shooting down planes – and we turn down Pietro Valadoro’s variation on it, doing the same thing but with cruise ships. I remind them that we’re about investing for good and buying things, not selling them. And eventually, because I really can be quite persuasive, we get there.
I hit the button on the intercom.
‘Maria – we’ll need a smoker. I’m going on a business trip.’
I’VE BEEN to a dark place. Not a real one. A dark place in my mind. I was dreaming of all the lies I’ve told in my life. Well, not all of them. I couldn’t possibly dream about all of them in a single night. And I don’t mean the little lies that help to get you through life. ‘Of course I’m not married.’ ‘I won’t come in your mouth.’ ‘We don’t need a condom. I had a vasectomy.’ Just a few of the really big ones.
They say that communication is the sister of leadership, but I never tell anyone anything.
I certainly lied to Two Livers when I ran Grossbank. I told her I knew what I was doing. She was smart enough to know that no-one senior in investment banking really knows what they’re doing. People at the top get by as best they can, hope for the best, and at year end look back on what’s happened and call it their strategy. But when I said I knew what I was doing, I think she believed that I actually had a master plan. Because a lot of things did happen and they appeared to be intentional on my part and in the end they seemed to work out. Even though I rarely explained anything to her in advance, and a lot of the time was present in form only, having spent the previous night getting wrecked and lacking her constitution. But she showed faith in me. Faith that I didn’t deserve. This particular emperor has never been anything other than stark naked.
So should I be pursuing her now? Am I worthy? If I care for her, shouldn’t I just walk away before I fuck up again and hurt her, possibly destroy her?
Of course not. Idiot, Hart. Get a grip. I’m too selfish for that. And besides, she’s a grown-up. She can look after herself. Probably better than I can.
Phew.
Better get some stronger pills.
I LOVE the Fatherland. Germany is a great country, with a great people and a great history. Okay, so from time to time they go a bit crazy and start invading small nations and all that shit, but we all have our off days.
I’m in Munich, city of beer, beautiful buildings and wonderful naked students sunbathing in the park they call the English Garden. Besides my lawyers from DLR Strummer, I have with me my new head of trading, a big black bodybuilder called Happy Mboku. Happy is from somewhere in West Africa. He found his way to Sierra Leone as a young man, made his name smuggling conflict diamonds and then decided on a career change when the Brits sent the Parachute Regiment to sort the place out. He ended up working in Antwerp for Rom Romanov, trading diamonds at least semi-legitimately, and acquired a financial education of sorts.
He looks short against the guys from DLR Strummer, but in fact he’s six feet tall, weighs over two hundred and forty pounds and comfortably bench presses three times his own bodyweight. He could easily bench press me if he wanted. He doesn’t really have a neck, just sprouts a head on top of very muscular, very broad shoulders. And he looks odd in a suit, even a bespoke Savile Row number that does its best to smooth over the bulges.
But the most interesting feature about Happy is the tribal markings on his face. When he reached puberty he was scarred – without anaesthetic – down both cheeks, in three straight lines on either side. He wasn’t allowed to flinch or cry, because it was a rite of manhood. When the scars healed, they gave him the most ferocious appearance, which, combined with his natural tendency to frown, makes him the scariest man I’ve ever seen on a trading floor. He also has the widest smile, with perfect white teeth, which completely belies his normal appearance, but it is rarely seen.
We’ve come to visit yet another of those tired German family-run businesses that should never have had its shares listed on the stock exchange and is now paying the price, as perceived short-term under-performance over a couple of quarters is rewarded with an invasion of ‘activist’ shareholders and private-equity stalkers.
The company in question is called Meier Holding AG, and they’re one of those old-fashioned outfits that still makes things. In this case everything from bathroom fittings to pumps to vehicle components and back again, via garden furniture, kitchen appliances and a stack of other items that really don’t hang together and have no rhyme or reason, except the family that now only has a minority share in the business actually liked them – and still does. They’re also old-fashioned in owning all their factories and land, not having any debt – the old man who founded the company didn’t approve of it – and having never fired anyone except for just cause. Can you imagine? No employer provides jobs for life these days. But this company does, even if they don’t disclose it, and they train their people, redeploy them between businesses if times are hard for one area while another is doing well, and have a paternalistic attitude straight out of the nineteenth century. They also have an outstanding labour record, with no strikes, minimal absenteeism and high productivity. But who cares about that these days?
Clearly a business like this has a massive target on its back, and it hasn’t taken a genius at some investment bank or other to notice it and come up with a plan. The thing that corporate financiers have in common with hedge fund managers is that they are morally neutral. If, on the one hand, they could raise finance for a company, help it expand, make acquisitions, develop new products and create jobs and prosperity for the future, or, on the other hand, mount a hostile bid for it, sell off the most valuable parts of the business, asset-strip it, load it with debt and fire half the workforce, leaving it terminally ill, they’ll always be consistent. They’ll do whatever makes the biggest fees.
In the case of Meier Holding, an analyst working an all-nighter in the slave-labour camp known as the ‘associates pool’ at Hardman Stoney decided the biggest fee-earning potential lay in taking this company down. He (or conceivably she) would never have visited the company or met the management, let alone the workforce. It would have been a numbers-based decision. Everything in life comes down to numbers in the end.
So now the Meier family have the
Terminator Fund out of Chicago on their shareholder register. Terminator is a hostile ‘activist’ hedge fund that boasts of its ability to ‘shake up’ management in the interests of maximising shareholder value. They were started by some ex-Schleppenheim M & A bankers who lost their jobs when the firm went bust in the crisis and bounced back with their own outfit. In this case they’ve teamed up with a private equity firm called Night Fury LLP, named after a mythical fire-breathing dragon in a children’s film that never missed its target.
Well, maybe they never missed before. But that was before the good guys arrived. Or maybe I should say ‘the bad guys’. But aren’t they the bad guys? And if they’re the bad guys, who are we? We’re the even worse guys. Whatever.
We head off to the company’s headquarters in a couple of rented limos and pull up outside what are surprisingly pretty modest offices. I have a proposal to put to their board, which is having a last-minute meeting before going into an extraordinary general meeting of shareholders called by the activists who want to unlock all that wonderful value.
THE THING about shareholder meetings is that while you can prepare endlessly for them, rehearsing, brainstorming, war-gaming, doing dry runs in front of a ‘red team’ prepped to give you a hard time, you can never predict exactly what will happen.
So Guy Marshall from the Terminator Fund, a preppy, twenty-eight-year-old American with an MBA from Chicago Business School and enough arrogance for a whole auditorium full of people, looks around the conference room in the Hotel Plaza with quite a lot of disdain. It’s full of little people, ordinary shareholders, many of them retired employees of Meier Holding, local businessmen and professionals, a few institutional fund managers, but only one face he recognises. Matt Warner from Night Fury is also there. His frat buddy and fellow Chicago MBA. They are dressed alike, look alike, talk the same way, think the same things, have the same haircut, belong to the same club, probably married the same woman and will eventually have identical children. And they are members of the global elite who hover above the lesser masses and determine their fate.
The Ego's Nest (Dave Hart 5) Page 6