Chapter Four
Kent was having a wonderful recession. He was starting to make serious, life-changing money — the kind of money he’d always dreamed about.
Back in the boom years, the banks were all over companies like a rash, throwing cash at anyone with a pulse, but now, in the middle of the worst credit crisis in history, they were running scared. They’d turned off the taps, stopping all new lending, and were demanding their old loans back, and fast. Every week, Kent bore witness to their irrational behavior: pulling in lending lines; hiking up interest rates for no good reason; and depriving businesses, even great ones, of vital financial support. In the middle of all this madness, Kent was cleaning up. CBC, the private equity firm he’d founded a few years back, had cash, and plenty of it. Deals were flooding in, and Kent’s firm was completing as many of them as it could. Like the man with the only water in a desert, Kent could name his price on any deal he chose to do.
The quiet purr of the engine brought a smile to Kent’s face as he depressed the ignition button. He’d bought the top-of-the-line BMW a few months back, but there was still a strong smell of new leather. He slid the gearshift into drive, and the car crunched across the gravel, triggering the automatic opening of the wrought-iron gates. Not bad for someone brought up by a divorced mother on a Leicester council estate.
He glanced at his wrist. The Polar watch showed a steady sixty beats per minute as it picked up his heart rate from the chest band he was wearing. Kent had risen at four thirty and was on the treadmill in his home gym a quarter of an hour later. Five miles in forty-five minutes, every day, kept him in excellent condition. The exercise and his meticulous low-fat diet made him appear much younger than his forty-eight years. He’d seen many of his contemporaries in the private equity industry let themselves go; too many business lunches and dinners, alcohol every day, and no exercise. They’d become flabby.
In his rearview mirror, the security lights reflected across the yellow limestone of the Old Hall. Worth ten million pounds on a bad day. He’d acquired the private estate from a failed dotcom entrepreneur seven years ago in a typical Kent deal. The vendor had to get out before he went bust, which meant only one thing: Kent could buy the Rutland property at a massive discount to its real value because he was a cash buyer and able to move quickly.
He drove up the access ramp onto the A1 motorway then turned on his car radio to listen to the BBC’s regular six fifteen business news slot, a favorite program he’d guested on several times himself as an expert on investment matters.
Thirty minutes later, he exited the A14 dual carriageway and pulled into the Science Park on the northern outskirts of Cambridge. The city was an unusual location for Kent’s leveraged buyout firm. Most were in London, some sixty miles to the south. When he’d founded the firm ten years ago, he saw no reason to follow the herd. He didn’t have to. His reputation and moneymaking track record in the buyout market were so strong he could afford to be unconventional.
He drove into his parking space outside CBC’s building a little after seven and looked up at the four-floor glass structure. He smiled. Most of its lights were on, but he made a mental note of who wasn’t in so he could raise it with the people concerned later on.
The office building made a statement. It said serious money to management teams applying for investment capital, but it didn’t look too flash to CBC’s investors who, after all, were paying for it through the exorbitant fees they paid to the firm. Kent thought he’d struck the right balance. He could have afforded to spend a lot more on the offices if he’d wanted. CBC was collecting £300 million a year in management fees. With bonuses, the partners were taking home six to eight million each on average, with Kent taking out twice as much.
“Morning, Mr. Kent,” said Bill Chapman, the security guard who sat at the front desk. Chapman was an ex-army staff sergeant now in his sixties. He’d spent most of his career in the SAS and some time in military intelligence. Not much happened at CBC without Chapman knowing about it.
“Morning, Bill. What’s the gossip?”
“Haven’t seen Mr. Prentis yet. Not like him.”
“He’s stuck in New York. Anything else?”
“Not really. Do you want your car doing today?”
“Sounds good.” Kent threw over his car keys. Every Tuesday, CBC would have a car valeting firm spend a day at the office giving the partners’ cars a thorough clean.
Kent bounded up the four flights of stairs. Most of his forty-five staff members were in, though their contracts stipulated a nine o’clock start time. None of them watched the clock. If they did, they didn’t last long at CBC.
He walked into his corner office, put down his briefcase, and went over to the window. The morning sunlight lit up the old stone buildings in the center of Cambridge three miles away. He never tired of this view. It was the main reason he chose to locate the firm there in the first place. When he’d been a university student at Cambridge many years before, he’d grown to love the centuries old architecture and the sense of permanence. Unlike most buildings in London, he knew the stone buildings in town would still be there in a few hundred years’ time.
Kent sat at his desk, automatically reaching out for his mug of coffee with his right hand. No coffee. Where’s Tara?
An hour later she rushed into his office.
“Sorry I’m late, John,” she said.
“You look flustered,” said Kent, looking up from his screen.
“I had problems with my mum this morning.”
“How’s she doing?”
“It’s an awful disease. I told you she lives with me now?”
Kent nodded. “Does your sister still look after her during the day?”
“Normally, but she was delayed getting over to my place this morning. That’s why I’m late. I’m really sorry.”
“Don’t worry about it. I’d like you to look into some professional help for your mum in the mornings so you’re not worried about what time your sister arrives. CBC will pay. Would that be okay?”
“I really don’t know what to say.”
“You don’t have to say anything. I know how difficult it can be living with Alzheimer’s. My grandmother had it. Dreadful experience.”
“Thanks, John.” Tara’s eyes started to well up.
She returned to her desk and printed off a bundle of pages then took them through to Kent. “Here are your papers for the investment committee meeting.”
“Thanks.”
Kent picked up the papers and sank into one of the sofas. Tara came over to sit next to him. Every morning, he’d reel off a list of tasks for her before he became tied up in meetings and phone calls. She had the notepad ready.
Kent’s eyes drifted from his papers. Tara was twenty-eight with olive skin and a perfect figure and, as she sat next to him, he admired her long, smooth legs under a short skirt.
“Besides Paul, are all the partners here for today’s committee?” he asked, forcing himself to focus on the business in hand.
“Yes. I’ve checked their electronic diaries.”
The Tuesday investment committee meetings started promptly at nine a.m. Kent knew this would mean Prentis having to call in from New York at four a.m., his time, but he was certain he’d participate. All of the partners understood what Kent expected of them.
Shortly before the conference, Kent walked into the boardroom and sat at the head of the table, his usual spot. His colleagues were already seated. There were six partners, including Kent. Any new deal commitment required a majority to vote in favor, with Kent having the casting vote should he choose to use it. He never had. He made it clear during these meetings where he stood on any particular deal, and his partners were bright enough to pick up on his signals without putting a transaction to the vote.
Kent had surrounded himself with ambitious partners in their thirties and forties. He paid them well, but there was no misunderstanding. This was his firm, and he made all the big decisions. He owned eighty p
ercent of CBC with the remaining twenty percent split evenly across the other five partners.
“Paul’s still not back,” said Kirkland.
“Says he can’t get a flight,” said Johnson, who’d been Kent’s first senior hire shortly after starting the firm. They’d worked together at Kent’s previous company. “I’m not so sure. I heard he spent most of last weekend socializing with the Grampian team. He says he’s going to charge the entertainment cost to my investor relations budget. I think not.” Johnson had a big smile on his face, but Kent knew he meant it. Only his own costs were going to eat into his bonus calculation. For Kent, all that mattered when allocating bonuses each year was how much money each partner made for the firm. It was a transparent system, and he made sure peer pressure kept all the partners focused on making as much money as possible.
Kent had been waiting years for the economic storm clouds to arrive. He’d raised the latest fund so as to have plenty of dry powder ahead of the downturn. He’d seen it coming and knew it would create an excellent buying opportunity. Such smart thinking meant he was on his way to making his first one hundred million pounds. He could see the day rapidly approaching when he’d become the UK’s richest private equity investor.
Chapter Five
The convoy of vehicles pulled off the highway at Mazatlan, Mexico and drove through the security gates. At the end of the half-mile private road stood the white, twenty-bedroom summer residence. Felix Safuentes smiled. This was the favorite of all his homes. He never tired of its sweeping view of the Gulf of California, providing a blue backdrop to the property. He liked how the house was not visible at all from the highway. He felt safe there and could relax and unwind in its privacy. Like the CEOs of many large multinational organizations, he had huge responsibilities, and there were many demands on his time. He took every opportunity he could to visit his Mazatlan home to recover from the stress of his hectic schedule.
He spent much of his time away on business. Three weeks out of four he visited overseas subsidiaries, key suppliers and major customers. He’d founded the business twelve years ago. Now, it employed over fifteen thousand people, across six countries, and had annual revenues approaching fifty billion dollars.
Safuentes ran the Caruana drug cartel. Throughout his empire, he was known as “Jivaro.” Only close friends and family called him Felix. He was a giant of a man, six feet eight inches tall, with the physique of a honed bodybuilder. The shaved head made his bushy jet-black eyebrows the most prominent feature of his face, giving him a frightening intensity whenever he frowned, which was often.
Profit margins were high in the Caruana business. After allowing for raw materials and the cost of production, and then deducting overheads such as transportation, bribes, and seizures, Jivaro’s chief financial officer calculated that sixty percent of revenues dropped through to the bottom line. There was no other business like it. With net cash flows of thirty billion dollars a year and rising rapidly, Jivaro and his top lieutenants were billionaires, and with their wealth they bought influence and power in all the right places.
As a result, Jivaro did not fear the authorities. His only fear was being assassinated by a rival cartel. After all, he’d achieved his position by taking out his main competitors. He’d shown extraordinary brutality toward his adversaries over the years, always leaving his calling card; their mutilated, decapitated bodies would be left on show so as to discourage others from challenging him.
By now, he had many enemies. He employed an army of paramilitary enforcers for his personal protection, and even had staff on the payroll to taste his food in case it was poisoned. He rarely shook hands with, or came physically close to, strangers for fear of attack.
When the convoy pulled up outside the summer home, Jivaro waited with his young son inside the armored Mercedes S class. His guards climbed out of the other vehicles, and only when they indicated that the area was completely secure did he leave the car. He gripped his son’s hand until they were safely inside the house.
He was there to meet a close friend, Salvador Garcia, a Colombian producer of cocaine. Like Jivaro, Garcia had foreseen the decline of the Colombian cartels and forged an early relationship with the Caruana organization. This had paid off handsomely; Garcia was now, by far, Colombia’s largest grower and exporter of cocaine. He had only one customer, Jivaro, who for many years had taken his entire production. As a rule, Jivaro did not invite business contacts to Mazatlan, but he’d known Garcia for many years and their families had grown close. He was regarded as a good friend, a man who could be trusted.
Garcia was already at the house when Jivaro arrived. They greeted each other like brothers and briefly shared stories about their families.
Jivaro snapped his fingers, and the surrounding entourage left the room, moving outside onto the terrace overlooking the ocean. An armed guard remained standing in the corner.
“Jose, come join us,” said Jivaro as he beckoned his eight-year-old son to sit next to him on the leather sofa.
“He’s grown so quickly,” said Garcia, looking at the young boy from his armchair. “I remember him as a baby not that long ago. You must be very proud of him.”
“Yes, I like to involve him more now he’s growing up.” Jivaro smiled at his son then turned to Garcia. “Would you like another drink before we discuss business?”
“I’m okay.” Garcia held up his large brandy.
Jivaro settled into the sofa, crossing his legs. “Tell me, how’s the crop this year, Salvador?”
“Much the same as last year, perhaps a little poorer. We’ve suffered some pest damage at two locations, and this is bound to affect yields. I’m hoping this won’t prevent us from meeting your demand.”
“Pest damage?”
“You will understand this will impact prices next year.”
Jivaro frowned.
“I’ll do my best to contain the increase, of course,” said Garcia.
Jivaro stared out of the window for a while then shrugged his shoulders. “Actually, I’m relaxed about prices going up next year.”
“That’s a first.” Garcia smiled.
“It won’t affect my operation.”
“I don’t follow.” Garcia’s smile began to melt.
“I’ve decided not to buy your product next year.”
Garcia said nothing for a few seconds as he processed the news. “Felix, you can’t mean that, surely? You know all of my production goes to supplying your organization.”
“It’s already decided.”
“Have I offended you?”
“You’ve done nothing wrong. You’ve been a good supplier.”
“Then what is it? We’ve done business with each other for many years.”
“I’ve no longer any need to purchase your crop.”
“You’re not getting out of the business?”
“No, far from it.” Jivaro laughed. “And when I do, Jose here will take over from me.” He rubbed his son’s head.
“If it’s a problem with the quality, I can fix this. I only mentioned the pest damage because…”
“The quality is acceptable.”
“Have you found another supplier? I’ll beat any price. Nobody beats me on price.”
“There’s no alternative supplier.”
“I don’t understand?” The stress showed on Garcia’s face.
“Papa?” said the young boy at Garcia’s obvious distress.
“Jose!” said Jivaro as he placed his index finger to his lips. The boy looked down.
Jivaro walked over to a cabinet and retrieved an envelope. “I intend to buy your plantations.” He smiled at Garcia as though he was the bearer of great news.
“But my business is not for sale. What made you think it was, my friend?”
“It is now.” He handed the envelope to Garcia. “Here’s the number my brother has calculated I should pay you. More than fair, you will find.”
Garcia opened it, his fingers trembling. “But this is less than hal
f…”
“Think about it, Salvador. All of your hard work will now become part of an expanding, successful organization. You should be proud of your achievement.” He knew he was stealing the plantations from Garcia, but he also understood that without the demand from the Caruana cartel, Garcia would have no business.
Having wiped out most of the competing cartels in Mexico, Jivaro was expanding vertically into production. He was intent upon capturing the grower’s margin and, in order to acquire this at the right price, a little lost friendship wasn’t going to stop him. He now controlled the largest cocaine grower in the world.
“Come, Salvador, let’s join the others outside for a celebratory drink.”
Jivaro grabbed hold of his son’s hand and led him out to the terrace. Garcia followed. He was not about to put up a fight. He’d seen many Caruana suppliers wiped out so the cartel could take over their operations. He was one of the lucky ones. At least, he’d been paid for his business and was still alive.
Chapter Six
At seven p.m. the traffic leaving Cambridge was heavy, and most of the cars seemed to be heading toward the access ramp for the A14 West. It was pouring with rain, three lanes were merging into two, and the roadworks ahead were causing bumper-to-bumper chaos. Kent was cocooned in his BMW, listening to Classic FM. He was running through the new deals in the pipeline. One, in particular, was dominating his thoughts: Henderson Wright.
Kirkland had found the opportunity a few days back, and they’d already signed it in exclusivity. They now had a clear run at it.
Kirkland had been ecstatic when she first described the deal to him. “This recession is throwing up some great opportunities for us, and Henderson Wright is the best deal I’ve seen. There’s no way we could buy control of one of the Big Four global accounting firms in normal times. We stand to make a shed-load of money on this deal.”
If Kirkland was so excited by the transaction, he knew it was going to be a good one. She’d been with the firm just two years. After graduating from the London School of Economics, she took an MBA from Harvard, coming first in her class. Kent hired her from Gain, the leading global firm of strategy consultants. It was a major coup for CBC; she had offers from all the other major private equity firms, but chose Kent’s firm.
Martin Bodenham Page 3
