into a separate entity called AmCor Alternative Investments, which is basically just an accounting trick to keep the regulators happy.’ Quarry had himself worked for AmCor in London for a decade, and he and Easterbrook went way back – ‘way, way back’, as he dreamily put it: too far to recall, he implied, through the haze of the years – all the way back to the coke-and-call-girl glory days of the 1990s. When Quarry had left AmCor to set up with Hoffmann, Easterbrook had passed them their first clients in return for commission. Now AmCor Alternative was Hoffmann’s biggest investor, with close to $1 billion under management. He was another attendee whom Quarry took the trouble to meet personally in the lobby.
And so they all came: twenty-seven-year-old Amschel Herxheimer of the Herxheimer banking and trading dynasty, whose sister had been at Oxford with Quarry, and who was being groomed to take over the family’s two- hundred-year-old private bank; dull Iain Mould of what had once been an even duller Fife building society, until it had taken itself public at the beginning of the century and, in the space of three years, run up debts equivalent to half the gross domestic product of Scotland, necessitating a takeover by the British government; the billionaire Mieczyslaw Lukasinski, a former mathematics professor and leader of the Polish Communist Youth Union, who now owned eastern Europe’s third-largest insurance company; and finally two Chinese entrepreneurs, Liwei Xu and Qi Zhang, representing a Shanghai-based investment bank, who arrived with no fewer than six dark-suited associates, whom they insisted were lawyers but who Quarry was fairly sure were computer experts, come to inspect Hoffmann’s cyber-security – after a furiously polite stand-off the ‘lawyers’ reluctantly agreed to leave.
Not one existing investor whom Quarry had invited declined the invitation. ‘They’re coming for two reasons,’ he had explained to Hoffmann. ‘First, because over three years, even as the financial markets have tanked, we’ve returned them a profit of eighty-three per cent and I defy anyone to find any hedge fund anywhere that has produced such consistent alpha – I mean, they must be wondering just what the hell it is we’ve got going on here, yet we’ve refused to take a single extra cent in investment.’
‘And what’s the second reason they’re coming?’
‘Oh, don’t be so modest.’
‘I don’t follow.’
‘It’s you, you daft bugger. They want to take a look at you. They want to discover what you’ve been up to. You’re becoming a legend and they want to touch the hem of your garment, just to see if their fingers turn to gold.’
Hoffmann was woken by Marie-Claude.
‘Dr Hoffmann?’ She shook his shoulder gently. ‘Dr Hoffmann? Mr Quarry says to tell you they are waiting for you in the boardroom.’
He had been dreaming vividly, but when he opened his eyes the images vanished like bursting bubbles. For a moment his assistant’s face bending over him reminded him of his mother’s. She had the same grey-green eyes, the same prominent nose, the same anxious and intelligent expression. ‘Thanks,’ he said, sitting up. ‘Tell him I’ll be there in a minute,’ and then he added impulsively, ‘I’m sorry about your husband. I get’ – he twirled his hand helplessly – ‘distracted.’
‘That’s quite all right. Thank you.’
There was a washroom across the passage from his office. He ran the cold tap and cupped his hands beneath it. He splashed his face again and again, flailing his flesh with the icy water. He had no time to shave. The skin on his chin and around his mouth, normally bland and smooth, felt as bristly and textured as an animal’s. It was a curious fact – no doubt an irrational swing of mood brought on by his injury – but he was beginning to feel exuberant. He had survived an encounter with death – exhilarating in itself – and now he had a boardroom full of supplicants waiting, in Hugo’s words, to touch his hem, in the hope that his genius for making money would rub off on them. The rich of the earth had bestirred themselves from their yachts and pools and racetracks, from the dealing rooms of Manhattan and the counting houses of Shanghai, and had gathered together in Switzerland to listen to Dr Alexander Hoffmann, the legendary – Hugo’s word again – creator of Hoffmann Investment Technologies, preach his vision of the future. And what a story he had to tell! What a gospel he had to preach!
With such thoughts surging through his damaged head, Hoffmann dried his face, pulled back his shoulders and headed off to the boardroom. As he passed across the trading floor, the lithe figure of Ganapathi Rajamani, the company’s chief risk officer, moved smoothly to intercept him, but Hoffmann waved him out of the way: whatever his problem was, it would have to wait.
6
No doubt wealth when very great tends to convert men into useless drones, but their number is never large; and some degree of elimination here occurs, for we daily see rich men, who happen to be fools or profligate, squandering away their wealth.
The boardroom had the same corporate impersonality – the same soundproofed glass walls and floor-to- ceiling venetian blinds – as the managers’ offices. A giant blank screen for teleconferencing took up most of the end wall, looking down on to a big oval table of pale Scandinavian wood. As Hoffmann entered the room, all but one of the table’s eighteen chairs was occupied either by the principals or their advisers; the only spare place was next to Quarry at its head. Quarry’s gaze followed his progress round the edge of the room with evident relief. ‘Here he is at last,’ he said, ‘Dr Alexander Hoffmann, ladies and gentlemen, the president of Hoffmann Investment Technologies. As you can see, his brain’s so big we’ve had to let out his head to give it some breathing space. Sorry, Alex, only joking. I’m afraid he took a bit of a knock, hence the stitches, but he’s fine now, aren’t you?’
They all stared. Those nearest to Hoffmann twisted in their seats to look up at him. But Hoffmann, hot with embarrassment, avoided eye contact. He took his position next to Quarry, folded his hands on the table in front of him, and stared fixedly at his interlaced fingers. He felt Quarry’s hand grasp his shoulder, the weight increasing as the Englishman rose to his feet.
‘Right then, we can at last get started. So – welcome, friends, to Geneva. It’s almost eight years since Alex and I set up shop together, using his intelligence and my looks, to create a very special kind of investment fund, based exclusively on algorithmic trading. We started with just over a hundred million dollars in assets under management, a big chunk of it courtesy of my old friend over there, Bill Easterbrook, of AmCor – welcome, Bill. We made a profit that first year, and we’ve gone on making a profit every year, which is why we are now one hundred times larger than when we started, with AUM of ten billion dollars.
‘I’m not going to boast about our track record. I hope I don’t need to. You all get the quarterly statements and you know what we’ve achieved together. I’ll just give you one statistic. On the ninth of October 2007, the Dow Jones Industrial Average closed at 14,164. Last night – I checked it before I left my office – the Dow closed at 10,866. That represents a loss over more than two and a half years of almost one quarter. Imagine that! All those poor saps with their retirement plans and their tracker bonds have lost about twenty-five per cent of their investment. But you, by placing your trust in us over the same period, have seen your net asset value increase by eighty-three per cent. Ladies and gentlemen, I think you’ll agree that bringing your money to us was a pretty smart thing to have done.’
For the first time Hoffmann risked a brief glance around the table. Quarry’s audience was listening intently. (‘The two most interesting things in the world,’ Quarry once remarked: ‘other people’s sex lives and your own money.’) Even Ezra Klein, rocking back and forth like a student in a madrasa, was temporarily still, while Mieczyslaw Lukasinski simply could not keep the grin off his plump peasant face.
Quarry’s right hand continued to rest on Hoffmann’s shoulder; his left was thrust casually in his pocket. ‘In our business we call the gap between market performance and fund performance “alpha”. Over the past three years, Hoffmann has generated alpha of one hundred and twelve per cent. That’s why we’ve twice been voted Algorithmic Hedge Fund of the Year by the financial trade press.
‘Now,’ he went on, ‘this consistency of performance is not, I can assure you, a matter of luck. Hoffmann spends thirty-two million dollars a year on research. We employ sixty of the most brilliant scientific minds in the
