The Fear Index

three ultra-high net worths, two family offices, and a partridge in a pear tree.’
    ‘A partridge?’
    ‘Okay, not a partridge. There is no partridge, I concede that.’ Quarry was in great high spirits. If he was three parts gambler he was also one part salesman, and it was a while since that crucial part of him had been allowed its head. ‘Ground rules are: first, they have to sign a non-disclosure agreement regarding our proprietary software, and second, they’re each permitted to bring in one designated professional adviser. They’re due to arrive in about an hour and a half – I suggest you have a shower and a shave before they get here: the look we require from you is brilliant but eccentric, if you don’t mind me saying so, rather than sheer bloody crazy. You walk them through the principles. We’ll show them the hardware. I’ll make the pitch. Then we’ll both take them out to lunch at the Beau-Rivage.’
    ‘How much are we looking to raise?’
    ‘I’d like a billion. Settle for seven-fifty.’
    ‘And commission? What did we decide? Are we sticking with two and twenty?’
    ‘Don’t you think?’
    ‘I don’t know. That’s your call.’
    ‘More than the going rate looks greedy, less and they won’t respect us in the morning. With our track record it’s a seller’s market, but even so I say let’s stick with two and twenty.’ Quarry pushed back his chair and swung his feet up on to the desk in a single, easy fluid motion. ‘It’s going to be a big day for us, Alexi. We’ve waited a whole year to show them this. And they’re gagging for it.’
    A two per cent annual management fee on a billion dollars was twenty million dollars, just for showing up to work in the mornings. A twenty per cent performance fee on a billion-dollar investment, assuming a twenty per cent return – modest by Hoffmann’s current standards – was an additional forty million a year. In other words, an annual income of sixty million dollars in return for half a morning’s work and two hours of excruciating small talk in a smart restaurant. Even Hoffmann was willing to suffer fools for that.
    He asked, ‘Who exactly have we got coming?’
    ‘Oh, you know – the usual suspects.’ For the next ten minutes Quarry described each in turn. ‘But you don’t have to worry about them. I’ll handle that side. You just talk about your precious algorithms. Now go and get some rest.’

5

    Hardly any faculty is more important for the intellectual progress of man than ATTENTION. Animals clearly manifest this power, as when a cat watches by a hole and prepares to spring on its prey .

    CHARLES DARWIN, The Descent of Man (1871)

    HOFFMANN’S OFFICE WAS identical to Quarry’s except he had no pictures of a boat, indeed no decoration of any sort apart from three framed photographs. One was of Gabrielle, taken over lunch on the Pampelonne Beach at St-Tropez two years earlier: she was laughing, looking directly into the camera, the sun on her face, a white filigree of dried salt on her cheek from a long sea swim that morning – he had never seen anyone look so vitally alive; it raised his spirits every time he saw it. Another was of Hoffmann himself, taken in 2001, wearing a yellow hard hat and standing 175 metres below ground in the tunnel that would eventually house the synchrotron of the Large Hadron Collider. The third was of Quarry in evening dress in London receiving the award for Algorithmic Hedge Fund Manager of the Year from a minister in the Labour government: Hoffmann, needless to say, had refused even to attend the ceremony, a decision Quarry had approved of, as he said it added to the company’s mystique.
    Hoffmann closed the door and went around the double-glazed walls of his office lowering all the venetian blinds and closing them. He hung up his raincoat, took the CD of his CAT scan from the pocket and tapped the case against his teeth while he considered what to do with it. His desk was bare except for the inevitable six-screen Bloomberg array, a keyboard and mouse and a telephone. He sat in his two-thousand-dollar high-backed orthopaedic swivel chair with pneumatic tilt mechanism and oatmeal upholstery, opened a bottom drawer and thrust the CD inside out of sight, as far as it would go. Then he closed the drawer and switched on his computer. In Tokyo the Nikkei Stock Average of 225 companies had closed down 3.3 per cent. Mitsubishi Corporation was off by 5.4 per cent, Japan Petroleum Exploration