Part 9 (1/2)
”A million.”
”What about his ups? Did you let him keep any?”
Gillette shook his head. ”I don't want him a.s.sociated 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 compet.i.tors 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 are NAG's investment committee. You make all the big decisions around here.” 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 a.s.sociate cla.s.s and started out as friends, but the relations.h.i.+p 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 ent.i.ties 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 h.e.l.l 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 and a ten-billion-dollar fund at the same time?” 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 inst.i.tutional 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 entire sector of private equity. Which is probably about a hundred funds right now.” 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?”