The Chairman Page 7

  “Thanks.”

  She turned so she was facing him. “I had a wonderful time tonight.”

  “Good.”

  “I want to get to know you better,” she said quietly. She kissed him deeply, then stepped back, slipped off her top, and tossed it over the railing. Allowing him a few seconds to see her breasts in the moonlight, nipples erect in the chilly November night, before putting her arms around his neck and kissing him again. “I don’t want to go home yet.”

  “And I don’t want you to see Jeremy Cole,” Gillette said firmly.

  She moved back again, stepped out of her jeans, and stood before him naked, arms at her sides. “Okay.”

  “Ready, Alpha?” The voice came crackling through the walkie-talkie.

  The man hesitated, making certain the sensors were online, making certain the laptops were picking up everything. He checked each screen to make absolutely sure that all of the sensors were transmitting data. He didn’t want to have to do this again. For some reason he had a bad feeling about being up here this time.

  “Affirmative. Alpha instructs you to blow the load.”

  Moments later, the Explorer shuddered as the dynamite detonated.

  6

  Allies. As vital in business as in war. Because business is war.

  “GOOD MORNING, CHRISTIAN.”

  Gillette rose from his chair at the head of the long conference table. He’d been waiting ten minutes. Typically, he would have walked out after five. But not with this man. “Hello, Miles,” he said, nodding respectfully.

  Miles Whitman was chief investment officer of North America Guaranty & Life. With more than three trillion in assets, it was the country’s largest insurance company. Whitman had sole authority over a trillion of that, making him one of the most influential people in the financial world. He could make and break Wall Street careers with his decisions, because an investment banker was nothing without a dependable flow of cash—and Whitman controlled the biggest river of all.

  For the most part, Whitman invested in liquid securities: bank deposits, federal and state debt obligations, and the stocks and bonds of highly rated public corporations. But, like most insurance companies and other big investors, North America Guaranty—known as “NAG” in financial circles—allocated a percentage of its portfolio to private equity firms like Everest Capital. To the gunslingers like Christian Gillette who were generating huge returns. Whitman and his staff didn’t have the expertise to buy and manage companies themselves, but, like everyone else, they salivated at the profits.

  “I see you’ve adjusted quickly to your new position,” Whitman observed drily, sitting down.

  “What do you mean?”

  “You’re at the head of my table.”

  “Donovan training,” Gillette replied unapologetically. “Always take the head of the table. Especially when it isn’t yours. Gives me an immediate edge. People assume I’m running the meeting, even when I’m not.”

  Whitman chuckled, running his manicured fingernails along the razor-sharp part in his snow-white hair. “That’s why we elected you chairman last week, Christian. Right here in this room.” He made a sweeping gesture toward the far end of the table. “Because you take control,” he said, adjusting his trademark bow tie. “I should be more specific,” he said, holding up a finger. “Those of us who know what we’re doing elected you.”

  “Thanks for hosting the meeting, Miles.”

  “Glad to. Hopefully, the speech I made right before the vote about backing you and not Troy helped sway one or two of the limited partners who were on the fence.”

  “Apparently you swayed just enough.”

  “Checked the results, did you?”

  Gillette watched the other man stretch, fingers straight out as he reached for the ceiling. Whitman was sixty-two but still very active. He played squash three times a week at the Harvard Club against men half his age—and won—and cross-country biked at least twenty miles each weekend through the Connecticut state forest adjacent to his Greenwich property. “Of course I did.”

  “Good for you. Always understand who’s with you.” Whitman finished stretching. “And, more important, who’s against you.”

  “I appreciate your talking to Ann Donovan, too. Without her 25 percent voting bloc, I would have lost.”

  “How did you find out about that?” asked Whitman curiously.

  “Ann told me at the funeral reception. She said she was going to vote for Troy but that you convinced her that wouldn’t be a good idea.”

  “I’m glad she took my advice. I felt strongly about that.” Whitman turned his head to the side and grinned. “You okay? You look a little tired this morning.”

  “I’m fine.”

  “Already feeling the stress of running the second largest private equity firm in the world?”

  After peeling off her clothes on his balcony at midnight, Faith had led Gillette to his bedroom and kept him up most of the night making love to him over and over until he’d finally ushered her down to the lobby and into a taxi at six this morning. He’d given her one of his shirts to replace the top she’d tossed over his railing, and he’d been relieved when they hadn’t been met by a mob of paparazzi. Faith was a popular target.

  “I’m not feeling any stress at all, Miles. I’m saddened by Bill’s death, but I’m ready to carry on the Everest legacy.”

  “Very good,” Whitman said approvingly. “Just the right amount of deference to the fallen leader, combined with energy for the future. Did you talk to a consultant or are you just a natural?”

  “My father was a senator,” Gillette reminded Whitman. “I know what to say and when to say it.”

  “Oh, that’s right.” Whitman’s expression turned serious. “How are the troops at Everest doing?”

  “What do you mean?”

  “Well, the general just died. You’ll have to be careful you don’t lose lieutenants. Especially the good ones. Marcie, Kyle. They may think their prospects for getting rich just took a hit, and they may consider going somewhere else. You have to convince them that Everest won’t miss a beat with you as chairman.”

  “I’ll take care of that in the next few days.” Gillette checked his watch. Today was jammed, but he didn’t want to rush this man. “I need to talk to you about Troy.”

  Whitman glanced up. “What is it?”

  “He’s gone.”

  “Gone?”

  “I fired him at the funeral reception.”

  “You’re kidding. Why?”

  “He was having sex with a woman who worked in the marketing department at one of our companies, a company Troy was chairman of.”

  Whitman rolled his eyes. “Oh, Jesus. So you were staring down the barrel of a massive sexual harassment lawsuit.”

  “Exactly.”

  “How did you find out?” Whitman asked.

  “You don’t want to know.”

  “As your biggest investor, I need to know. This’ll get out, and I need to be able to support you with evidence. People will call and ask me about what you did to him.”

  Gillette’s mind flashed back to the image of Mason on top of the young woman in the basement. “He invited her to the funeral reception, Miles. While you were talking to Senator Stockman on the first floor, they were in a basement bedroom.”

  “Christ!” Whitman banged the table. “What an idiot.”

  “Yeah. Like you said, that kind of crap could put us in court and cost us tens of millions of dollars.”

  “And a lot more than that in bad press,” Whitman agreed. “You had no choice. But how do you know he was having sex with her?”

  “I walked in on him.”

  Whitman stared at Gillette for a few moments without blinking. “How did you find out he was down there?” he finally asked.

  “One of my people tipped me off.”

  “Who?”

  “Kyle.”

  Whitman raised both eyebrows. “Really?”

  “Yes.”

&nbs
p; “You figure Kyle saw an opportunity, a chance to get one of you guys out of the way so he could move up?”

  “Probably.”

  “What did you give Mason in severance?”

  “A million.”

  “What about his ups? Did you let him keep any?”

  Gillette shook his head. “I don’t want him associated with Everest at all.”

  “That’s cold.”

  “He had it coming.”

  “Don’t go out of your way to make enemies, Christian,” Whitman advised. “You’ll have plenty without even trying.”

  “I already do, and it doesn’t bother me.”

  “A limousine blowing up doesn’t bother you?”

  “I’ll be fine.”

  Whitman grimaced. “Be careful.”

  “I am.” Gillette could tell Whitman wasn’t convinced. “Look, Tom McGuire has people with me full-time now.” As Everest’s largest investor, Whitman was familiar with the portfolio companies, so he knew about McGuire & Company. “They sweep the limousines every few hours and rotate the vehicles constantly. They check my homes, the boats. Everything. And they’re rerunning background checks on everyone at Everest. Tom’s taking every precaution. I’m satisfied.”

  “Do you trust Tom?”

  Gillette thought for a moment. “I have to trust someone.” But maybe Whitman had a point. Maybe getting someone from the outside as well wouldn’t be a bad idea.

  “What do you think Mason will do?” Whitman asked.

  “I don’t know. I didn’t talk about it with him.”

  “You should help him land on his feet. He’s got a lot of information about Everest stored up in his head. Some you’d probably rather have him keep quiet. You don’t want him showing up at one of your competitors spilling his guts. Remember, control every string. That’s the key in your world.” Whitman adjusted his bow tie again. “So, let’s get to the main attraction. What’s the real reason you came to see me this morning?”

  Gillette nodded. “Okay. Well, look, NAG has always been one of our biggest backers. You’ve been an anchor tenant in each of our seven funds.”

  “Yep. We committed three million bucks to the first fund Bill put together twenty years ago. I remember presenting that to the investment committee like it was yesterday.”

  “And now you are NAG’s investment committee. You make all the big decisions around here.”

  “Don’t remind me,” Whitman pleaded with a groan. “Why do you think my hair’s so white? What did I commit to your last fund? To Everest Seven.”

  “Four hundred million.”

  Whitman whistled and grinned. “Four hundred million. That’s a lot of money, Christian. Somebody might think I actually had faith in you guys.”

  “And now I’m asking you for more.”

  “What a surprise.”

  “At this point we’ve invested over half of the 6.5 billion of the seventh fund, so I’m getting ready to raise the next one. Our eighth.”

  “Didn’t Bill usually wait until the current fund was at least 75 percent invested before he started raising the next one?”

  “He did, but my target for this fund is ten billion,” Gillette explained.

  “Ten billion?”

  “Yes. I’m going to need extra time to raise that much.”

  Whitman hooked his forefinger over his lower lip. “That’s odd,” he murmured through his hand.

  “What is?”

  “Paul Strazzi was in here yesterday. He’s going to start raising his next fund, too. His target is the same as yours. Ten billion.”

  Paul Strazzi ran Apex Capital, the largest private equity firm in the world. Apex was also based in Manhattan. Apex and Everest had been rivals for years.

  Thirty years ago, Bill Donovan and Paul Strazzi had worked together at Morgan Stanley, a high-powered New York investment bank. They’d been in the same associate class and started out as friends, but the relationship had soured as they constantly competed for promotions, raises, and bonuses. Ultimately, they’d each gone off on their own in the early eighties to start private equity firms, guiding their respective entities to the top of the financial food chain, competing for investors and performance as viciously as they had for promotions and bonuses at Morgan Stanley. Now Apex and Everest were the number one and two private equity firms in the world.

  “Strazzi was here yesterday?” Gillette asked.

  “Yeah. He called me first thing yesterday morning. Wanted to see me right away. Took me to lunch and laid the same thing on me. Ten billion dollars of a new fund. Apex’s last fund was seven billion. We invested four hundred million in that one, too.”

  “Donovan wasn’t happy about that.”

  Whitman shrugged. “Hey, Strazzi’s performance has been excellent over the years. Just like you guys. There’s no rule against me investing with both of you.”

  Gillette thought for a moment. “That’s a hell of a coincidence. Strazzi coming in yesterday, I mean.”

  “Maybe it isn’t a coincidence.”

  “Maybe not. But, Miles, the question is at what level will you support my new fund?”

  Whitman hesitated. “I have an idea.”

  “What?”

  “Increase your target to fifteen billion.”

  “Fifteen?”

  “Yes.”

  Gillette clasped his hands together and rested them on the table. “Miles, that would be the largest private equity fund ever raised. By far.”

  Whitman’s eyes danced. “I know.”

  “Do you think there’s enough capacity in the market to fill a fifteen-billion-dollar fund and a ten-billion-dollar fund at the same time?”

  Whitman shook his head. “No way. There’s probably several hundred billion dollars committed to hundreds of private equity firms around the country, but there’s not enough in the institutional coffers for two funds that size being raised simultaneously. Our total portfolio here at NAG is three trillion, but we only allocate 2 percent of that to private equity. That’s sixty billion, and that’s the maximum we commit to the entire sector of private equity. Which is probably about a hundred funds right now.”

  “Then why are you suggesting I increase the size of Everest Eight to fifteen?”

  “Because I don’t think there’s enough capacity for two ten-billion-dollar funds, either. Not being raised at the same time, anyway. But there is capacity for one fifteen-billion-dollar fund. More important, I think it’s time for one of you to take over. Having two firms this size just bids up prices you both ultimately have to pay for the companies you buy. So make the play, Christian. Head-to-head with Paul Strazzi. Everest raises the largest private equity fund ever.” Whitman paused. “Or Apex does.”

  “I’ll think about it, Miles, but the question still stands. At what level will you support me.”

  “A billion dollars.” Whitman let out a heavy breath. “Along with our commitments to Everest’s other funds, that’ll be over two billion to you guys.” He looked up, his expression darkening. “That’s a lot of money for me to have with one private equity firm. Probably too much. The CEO will question me hard, but I have faith in your ability, young man.” He pointed at Gillette. “Don’t disappoint me.”

  “Don’t worry,” Gillette answered calmly.

  “Your portfolio companies will have to be squeaky-clean during the fund-raising, Christian. No bankruptcies or scandals of any kind.”

  “Of course.”

  “I can’t stress that enough.”

  “I hear you.”

  “How is the portfolio doing?” Whitman wanted to know.

  “Overall, fine. In line with our historical performance. We’re on track to generate 50 percent returns with the seventh fund. We’ve got a couple of investments that aren’t doing as well as we’d like,” Gillette admitted. “The power-tool company, for one. But that’s natural. You can’t bat a thousand when you control twenty-seven companies.”

  “Blalock Industries. That’s the power-tool compa
ny, right?”

  “Right.”

  “Roger Nolan runs it.”

  “Not anymore.”

  Whitman glanced up.

  “I fired him,” Gillette explained.

  “You’ve been a busy man. Do you carry an ax with you at all times?”

  “He never hit his budgets, Miles, and he whined about foreign competition. Yesterday I promoted Fred Cantwell to CEO. Fred had been the chief operating officer.”

  “Roger and Bill Donovan were good friends, weren’t they?”

  “I don’t care. I can’t let personal relationships influence my business decisions.”

  Whitman nodded approvingly. “Good for you, son. Too many people do. I think you’re going to do just fine as chairman.”

  “Thanks.”

  “But whatever you do, don’t let any of your companies fail while you’re raising this next fund,” Whitman advised strongly. “Keep them on life support if you have to. Put in more dollars even if you don’t think you’ll ever see the money again. Just don’t let a single company go down. That would spook the investors.”

  “I don’t believe in throwing good money after bad,” countered Gillette. “We’ve always been careful about that at Everest. We’ve only had a few companies go down in twenty years, which is damn good. But the reality of this game is if you’re in it long enough, sooner or later you’re going to have companies blow up. You know that, Miles. Fortunately, we’ve had a lot more winners than losers. As a result, you and our other investors have done well.”

  “Quite well,” Whitman agreed. “But this is fifteen billion dollars, Christian. Twice as much as anyone’s ever tried to raise for this kind of fund. Take my advice. Don’t screw up. No bankruptcies, no scandals, and keep the companies running at all costs. Once you’ve raised the fund, fine, back to financial Darwinism. But not until you have fifteen billion dollars of signed subscription agreements sitting in your lawyer’s office. Understand, amigo?”

  “I understand.”

  “How long do you think it’ll take to raise Everest Eight?” Whitman asked.

  “A year.”

  “That’s probably right,” the older man agreed. “Maybe a little faster with a break or two.”