The Protégé (2 page)

Families were always full of secrets, Gillette knew. Especially wealthy ones.

“The pleasure’s mine,” Gillette said, motioning for Meade to sit back down. “I know you don’t talk to other firms very often, so I’m honored that you’re here.”

“Thank you.” Meade gestured at the young woman sitting beside him. “Christian, this is Allison Wallace.”

Allison was attractive, no two ways about it. Blond and slim, with pretty facial features: light blue eyes, a thin nose, full lips, and high cheekbones. Dressed conservatively in a dark blue skirt suit and a white blouse, top button buttoned. Late twenties, Gillette figured. “Hello.”

She gave him a slight nod.

“Allison’s on the board of the Wallace Family Trust,” Meade explained. “Along with her uncle and her grandfather. The trust is the vehicle the Wallaces make most of their investments with. I report to Allison.” His smile grew forced.

As if it were irritating to report to a woman half his age, Gillette thought. “Thank you both for coming. Like I said, I’m honored, but also curious,” he admitted, sitting at the head of the table. “You weren’t clear about what you wanted when you called, Gordon. Frankly, I don’t usually take a meeting without a specific agenda. But this is the Wallace Family.”

“Representing the Wallaces does have its advantages,” Meade acknowledged. “How much do you know about the family?”

“I know they’re hypersensitive about publicity. So hyper they don’t even have a Web site. Most family offices do.”

“I’ve tried to get them to set one up,” Meade responded. “Better to control the flow of information than have people guess. But they won’t do it. Are you at all familiar with the family history?” he asked.

“I know that Willard Wallace founded the Chicago and Western Railway back in the 1850s.” Gillette loved railroads, so the Wallace Family history had piqued his interest when Debbie dropped the prep memo on his desk yesterday. “The family sold it to what’s now the Burlington Northern in the early 1900s, but they kept a lot of the land Willard originally purchased for the railroad. They made a killing off it, too, selling it parcel by parcel for major bucks over the years. Then they struck gold again with the cell phone explosion.” Gillette could tell that Meade was impressed.

“Nice job, Christian. That stuff isn’t easy to find.”

Everest Capital owned an investigation and personal protection firm—McGuire & Company—that could dig up almost anything on anybody. McGuire’s CEO, Craig West, reported directly to Gillette. “I believe the family’s worth over twenty billion.”

“Can’t comment on that,” Meade said quickly, his expression turning serious.

“Which means I’m close.” Gillette glanced at Allison. She still hadn’t said a word—or taken her eyes off him.

“One thing you also figured out is the Wallace Family’s political affiliation.” Meade gestured at photos on the bookcases of Gillette shaking hands with both President Bushes, Rudy Giuliani, George Pataki, and several other Republican stars. “The Wallaces are big GOP supporters.” Meade smiled. “Is there a conference room with pictures of you shaking Democratic hands as well?”

“Both Clintons, Kerry, Cuomo, and a few others,” Gillette replied. “We have one for the independents, too.” He checked his watch: five after eleven. He was supposed to have met with the accountants in Conference Room Two at ten-thirty and the guy in Three five minutes ago. “So why did you want to get together?”

“You’ve become quite a story in the financial world,” Meade began. “A hot commodity.”

“We’re a
team
around here, Gordon, no stars. My
team’s
a hot commodity, not me.”

“That’s a nice piece of humble pie, Christian. Sincerely sliced, I’m sure. But you’re the chairman of Everest Capital. You take hell for everyone’s mistakes, so you get credit for their wins. That’s the way it works.” Meade eased back in his chair and crossed his legs at the knees. “How old are you?”

“Thirty-seven.”

“So young.” The older man sighed.

“I’ve done my time.”

“Oh, I know. I saw that
People
magazine article a few weeks ago. The top fifty bachelors list issue. They called you one of the hardest-working men in America.”

“I didn’t speak to anyone at
People
about that list,” Gillette said curtly. “They put it together on their own. They didn’t even give me a courtesy call to tell me the article was coming out. I don’t pay attention to that stuff, anyway.”

Meade chuckled. “I guess it doesn’t do much good to be one of the top fifty bachelors if you don’t have time to do the things bachelors do.”

“There’s never enough time, Gordon.”

Meade shook his head paternally. “I used to think that way, but I’ve learned to relax as my sun heads toward the horizon. Enjoy it while you can, Christian. Dust to dust, you know?”

“Uh-huh.”

Meade flicked a piece of lint from his pants. “I want to ask you a few questions about Everest before I get into specifics of why Allison and I are here.”

The people in the other conference rooms could wait. This man controlled twenty billion dollars, and Gillette smelled opportunity. “Go ahead.”

“You took over as Everest’s chairman, what? About a year ago?”

“Ten months.”

“How long have you been here?”

“Eleven years.” Gillette glanced over at Allison. She was still staring at him intently. “Before that I was with Goldman Sachs in their mergers and acquisitions department.”

“Bill Donovan was chairman of Everest before you, right?”

“Yup. Bill founded Everest back in 1984 and was chairman until last November, when I took over. The first fund he raised was twenty-five million. We’ve raised seven more funds since then.”

“Seven more?”
Meade asked.

“Yes, eight in total since 1984.”

“I thought Fund Seven was the last one you raised. That’s what it says on your Web site.”

“We just finished raising our eighth fund this morning. Literally right before I walked in here. The Web site should be updated by COB today.”

“How big is this one?”

Out of the corner of his eye, Gillette noticed Allison lean forward slightly in her chair. “Fifteen billion.”

Meade whistled. “Jesus, that’s got to be the largest private equity fund ever raised.”

“It is,” Gillette agreed. “We’re lucky.”

“You aren’t lucky,” Allison spoke up, finally breaking her silence. “You’re good. Investors don’t care about luck, they care about performance, and your performance has been outstanding. Your funds have done at least forty percent a year. I hear the return for Everest Six was over
fifty
percent a year. In the past nine months, you’ve sold your grocery store chain and your waste management company to industry buyers and taken two other companies public. Your information management business in Los Angeles and that chip maker in La Jolla. All at very fat gains. The profit on those deals alone was over three billion.”

“Closer to four,” Gillette corrected. Maybe there was more to Allison Wallace than just a bloodline. “It’s been a good run.”

“It’s been an
incredible
run, and you still haven’t sold your grand slam, Laurel Energy. That should be a four-to-five-billion-dollar profit by itself.”

Laurel Energy was a Canadian energy exploration and production company Everest had bought several years ago. Last fall, Laurel engineers had discovered a major oil and gas field on several option properties the company had acquired cheaply. Everest had put just three hundred million into Laurel, and Allison was right: According to the engineers, it was worth around five billion now. “How do you know about Laurel?” he asked.

“We have some oil and gas investments up there, too,” she explained. “People can’t keep their mouths shut. Everybody’s always got to tell somebody their secret.”

“Yeah, everybody wants to feel like they’re in the know.”

“Which you wouldn’t understand, Christian,” Meade observed, “because you’re
always
in the know.” His expression turned grave. “Let’s talk about what happened here last November.”

Gillette’s gaze moved deliberately from Allison to Meade.

“About how you became chairman of Everest. About Miles Whitman.”

Miles Whitman.
Gillette hadn’t heard that name in a long time.

A year ago, Whitman had been the chief investment officer and a board member of North America Guaranty—the country’s largest insurance company and Everest’s biggest investor. But Whitman had lost billions on some terrible investments he’d secretly made with NAG funds and was facing a long prison sentence if the internal accountants and the other board members figured out what he’d done. So he’d hatched a desperate plot to cover up his losses—which involved gaining control of Everest.

The plot hinged on Whitman having his own chairman of Everest, a puppet who’d do exactly what he was told. It had also hinged on getting Bill Donovan—
and then Gillette
—out of the way with help from the men who’d once run McGuire & Company—Tom and Vince McGuire. They’d gotten Donovan, but ultimately the plot had been uncovered and the conspirators had fled. The authorities had taken Vince in, but Whitman and Tom McGuire were still out there somewhere.

Donovan had been murdered on a remote area of his Connecticut estate. One hell of a way to get promoted, Gillette thought, shaking his head. “What happened last November was all over the news for weeks, Gordon,” he said quietly.

“Yes, but—”

“You can read all about it on the Internet.” Gillette could see that Meade wasn’t happy.

“Any hangover from all that as far as North America Guaranty goes?” Meade asked. “Did they invest in the fund you just finished raising? In Everest Eight?”

“A billion dollars,” Gillette replied. “We just got that commitment this morning.”

“Good. It’s important to have a relationship with the biggest pot of money around.”

“Believe me,” Gillette said firmly, “I understand.”

“How much of Fund Seven is left?” Meade asked.

“Two billion.”

“So you have seventeen billion of equity right now. Two billion from Seven and fifteen in the new fund.”

“Seventeen. Right.”

“How many companies do you own?”

“Thirty. We also own shares of other companies we’ve taken public but don’t control anymore.”

“What’s that in total revenues for the control companies?”

“About seventy billion.”

“How many of the thirty companies are you chairman of?”

Meade wasn’t going to like this answer. “Eighteen.”

“Holy crap!” the older man exclaimed. “Do you really have time to chair that many companies, chair Everest,
and
put seventeen billion dollars of new equity to work?”

“No,” Gillette admitted. “We’re going to hire at least two more managing partners in the next few weeks. We’ll probably open a West Coast office before the end of the year, too, and staff that up fast with experienced people we pick off from other private equity firms. It’ll cost more to do it that way, but it’ll save time.”

“L.A. or San Francisco?”

Gillette checked the clock on the wall. “Look, are you going to tell me why you’re here?”

“We want to coinvest with you,” Allison broke in before Meade could say anything.

Gillette considered her answer for a few moments. “What exactly does that mean?”

“We want you to call us when you’re about to buy a company and give us the option to invest in the equity alongside you.”

Gillette considered what she’d said for a moment. “What do I get for doing all the work? For finding the company and structuring the deal. For recruiting a management team to run the company after we take it over. What’s in it for me?”

“More equity,” Allison answered. “We’ll commit five billion dollars to you so you’ll have twenty-two billion instead of seventeen. You’ll be able to buy more and bigger companies.”

“It didn’t sound like you were giving me a commitment a minute ago.”

“Why not?”

“You used the word
option.
You said you wanted the
option
to invest with us.”

“If we don’t like the company you want to buy, we won’t invest.”

“That’s not how it works at Everest. If you commit to us, you
have
to wire your share of the money when we call it to buy the company. If you don’t, you forfeit what you’ve already invested. This is the big leagues. It doesn’t work for me unless I know you’re unconditionally committed. When I negotiate, I need to know I have firepower.”

“What’s the annual fee on Everest Eight?” Allison asked.

“One percent.”

“A hundred and fifty million a year?”

“Most funds charge at least one and a
half
percent,” Gillette pointed out. “As much as two, in some cases. You both know that. It’s just that we’re so big, we felt it was fairer to our investors to charge less.”

“We’ll pay a half a percent on our five billion,” Allison offered.

“I don’t cut special deals for anyone. I don’t have to.” Gillette looked at Meade, who was gazing down into his lap, then at Allison. She was staring straight back. So she was the decision maker after all. He hadn’t been sure until just now.

“All right,” Allison said deliberately. “We’ll invest five billion in Everest Capital Partners Eight under the same terms as everyone else.”

“I’ll have to go back to my investors,” Gillette cautioned, “to the limited partners who’ve already committed to Eight. I have to make sure they’re okay with the fund going from fifteen to twenty billion.”

“At five billion, would we be your biggest investor?” Allison wanted to know.

“By far.”

“Then I do want something.”

Gillette figured this was coming. You didn’t get five billion that easily. “What?”

“I want to be a managing partner here at Everest.”

Including Faraday, four managing partners reported to Gillette. Beneath that were eight managing directors, then a number of vice presidents and associates reporting to the managing directors. One thing he hadn’t anticipated from this meeting was adding anyone else to that pyramid.

“And I don’t care about getting paid.”