Another screen broadcast the value of Comstock Astor’s investment in the position. One minute earlier, the digits had blazed a healthy black and showed a $50 million gain. The digits were red now. All nine of them.
“Are we down a hundred million?” said Astor.
“Looks like it,” said Shank.
Bobby Astor was betting that the yuan would weaken against the dollar. He was sure that soon it would require more yuan to purchase one dollar. He wanted the number to increase. He had bet $2 billion of his fund’s money that he was right.
And then, before Astor could say another word, before he could blink, the digits turned black again.
6.30.
“We’re back in the black.”
Shank looked at the screen as if it had bit him in the ass. “What just happened?”
“No idea,” said Astor. “But I’m guessing it has to do with why the trade representative rescheduled the press conference.”
“Jeez-ya think?” said Shank.
For the past ten years, China had been allowing the value of the yuan to appreciate versus the dollar. The movements were slow and steady, just 1 or 2 percent a year. Five years ago, it had taken seven yuan to buy one dollar. Today it was only six and a third. This “revaluing” or appreciation of the yuan made Chinese exports more expensive and U.S. imports cheaper. The United States liked this. China did not.
“You want to give your guy a ring?” asked Shank. “Ask him what he thinks.”
“No,” said Astor. “I don’t need to bother him with this. He’s busy.”
“He’s the expert on these things.”
“We’re good.” Astor called his assistant. “Barb,” he said when she answered. “Push my meetings to this afternoon.”
“Septimus Reventlow is already here. Reception just announced him.”
“Marv can take him.”
“Me?” said Shank. “What am I supposed to say?”
“Tell him we don’t need his money right now. We’re fully invested. If that bothers him, he’ll have an opportunity to withdraw his funds after the next accounting period. I think that’s September thirtieth.”
“He won’t like that.”
“I imagine he won’t.”
“Too late, anyway,” said Shank.
“Why’s that?” Astor looked out the window and saw a tall, narrow-shouldered man in a three-piece suit crossing the trading floor. Septimus Reventlow spotted him and lifted a hand in greeting.
Shank shot Astor a look. “Hot money’s here.”
8
“Septimus, a pleasure.”
A soft hand, white as snow, gripped Astor’s. “Bobby, so nice to see you. Though I wish it were under happier circumstances. Have you learned anything more?”
“Only what I hear on the television.”
“The police haven’t contacted you?” asked Reventlow. “Or is the Secret Service heading up things?”
“I wouldn’t know. No one’s called yet. My father and I weren’t close. I’m the last person who could help.”
“What a shame. Family is precious. When’s the last time you spoke?”
“Actually, he-” Astor began, only to cut himself off. His personal affairs were none of Reventlow’s business. “It’s been years. Like I said, we weren’t close.”
Astor showed Reventlow to a chair in the corner of his office. Astor flew fixed-wing aircraft as well as helicopters, and the room had a sleek aeronautical feel to it. Stainless steel surfaces, a titanium-colored carpet, even a vintage poster for Pan American Airways.
“Marv’s bringing in a printout of your portfolio,” began Astor. “He’ll go over the positions and show you where we stand.”
“That won’t be necessary,” said Reventlow. “I’d prefer to speak with you. My family has decided that we would like to increase our holdings in Comstock.”
“I heard that. I appreciate your vote of confidence. If I’m not mistaken, you have one hundred million in the Astor fund. Are you looking to invest in one of the others? Our quant fund is having a spectacular year.”
“Actually, we’d prefer to stay in the fund you manage personally.”
Septimus Reventlow was a reed of a man. He had sharp cheekbones and dark hooded eyes, and his thinning black hair was meticulously combed and swept off his forehead with a generous dollop of pomade. He was impeccably dressed in a black suit, a bold checked shirt, and a maroon tie that he had knotted loosely, almost casually. He wore his wealth like a birthright, the lord to the manor born, and it never failed to rub Astor the wrong way.
“The Astor fund?”
Reventlow nodded.
“That’s a tough one. We’ve closed that fund. We’re a hundred percent invested as it is. Not much we can do.”
“We were hoping to deposit three hundred million dollars.”
Astor smiled inwardly. Three hundred million dollars was big money. There was a time not so long ago when he would have begged, beaten, and killed for half that amount. “As I said, Septimus, we’re not taking any more investors in that particular fund. It’s nothing personal. There’s no way I can add to my position for the time being. It’s more administrative than anything else. I’d be happy to revisit the issue in a few months.”
Astor’s excuse was not entirely truthful. In fact the reason was personal. Reventlow’s was a little different from other family offices. The source of his money was always a bit hazy. Reventlow claimed it hailed from a German industrial dynasty dating to the era of Bismarck and the first kaiser. Astor knew about the Krupps, the Thyssens, and the German branch of the Rothschilds, but he’d never heard of a Reventlow, except for an obscure count who’d married Barbara Hutton, the heiress to the Woolworth fortune. And of course there was the question of the man’s looks. It was not that he didn’t look German so much as that he didn’t look anything. He was some kind of strange Eurasian mongrel.
In the end, Astor couldn’t really care less where the money came from. It was Reventlow’s reputation as an investor who expected quick returns and who pulled his money if he didn’t get them that bothered him. The hedge fund business had a term for people like Septimus Reventlow: hot money. It was not a compliment.
“We’re set on investing now,” said Reventlow. “We sold some of our interests in the Far East and enjoyed a rather significant financial event. We don’t like our capital to lie fallow.”
And that was the problem with hot money, thought Astor. It was always chasing the highest returns, moving in and out of funds like some horny teenager rushing from bar to bar chatting up the girl with the blondest hair and the biggest boobs. If he got lucky in ten minutes, he stayed. If not, he moved on to the next one.
One stellar quarter did not a track record make.
Hedge fund managers liked continuity. They sought to build assets quarter after quarter, year after year. They preferred clients who shared their investment philosophy and were with them for the long term (barring a nuclear meltdown or the equivalent, say a loss of 10 percent or more in any one year). Reventlow was as rich as a Rockefeller, but he invested like a riverboat gambler.
“Look,” said Astor. “I understand your not wanting your money to sit around earning money market rates. I’m sure we can find an arrangement. All of my other funds would welcome your investment. I can get our managers in here in two minutes. I think it would be worth your time to hear what they have to say.”
“The Astor fund,” said Reventlow, as if stating a decree. “And yes, I’m sure we can find an arrangement.”
Astor smiled, if only to keep from punching Reventlow in the teeth. There was a method to his madness. Increasing his position in the yuan was not simply a matter of calling up his broker and buying another ten or twenty thousand contracts. Comstock Astor currently held $3 billion in its coffers, give or take. Of that, Astor had a billion down against the yuan, or had shorted it, meaning that he was betting it would depreciate in value versus the dollar.