Stephen W. Frey - The Protégé

ACKNOWLEDGMENTS

A special thank you to Dr. Teo Forcht Dagi, a very busy man who was always available to talk and to offer tremendous help with technical guidance; Mark Tavani, my editor, for his tireless efforts; Cynthia Manson, my agent, for her tireless efforts; and Matt Malone, my great friend, for his suggestions on this book.

Thank you also to my daughters Ashley and Christina, whom I love very much, and to those who have always been there to answer questions and give encouragement: Stephen Watson, Kevin Big Sky Erdman, Gina Centrello, Jack Wallace, Bob Wieczorek, Scott Andrews, John Piazza, Kristin Malone, Gordon Eadon, Chris Andrews, Andy Brusman, Jeff Faville, Marvin Bush, Jim and Anmarie Galowski, Courtney, Walter Frey, Tony Brazely, John Grigg, Bart Begley, Barbara Fertig, Pat and Terry Lynch, Chris Tesoriero, Baron Stewart, Gerry Barton, and Mike Pocalyko.

And to Diana. I love you, sweetheart. Youre my angel.

ALSO BY STEPHEN FREY

The Takeover

The Vulture Fund

The Inner Sanctum

The Legacy

The Insider

Trust Fund

The Day Trader

Silent Partner

Shadow Account

The Chairman

WRITERS NOTE ON NANOTECHNOLOGY

I first heard of nanotechnology from a great friend of mine, Matt Malone, who is a top middle-market private equity professional. He reads more than anyone I know, and hed recently seen an article in a popular national magazine on nanotech related to potential military applicationsi.e., creating super-warriors who would be able to do physical things that even the strongest men and women of today couldnt dream of doing.

After Matt alerted me about it, I did some research and found the subject absolutely fascinating. I then called another friend, Teo Forcht Dagi, who is a neurosurgeon turned venture capitalist. Teo provided excellent technical assistance and introduced me to other specialists in the field; and soon I was off and running with the book.

Its incredible to think about it from a biological perspective (which is really all we can do right now), but if nanotechnology will ever be perfected to become available and allow us to live decades, maybe even centuries, longer, it will pose some terribly traumatic social questions. The weightiest of them will be: Who gets to take advantage of it? Only the wealthy? Because, like any technology, it will be extraordinarily expensive at first. Or will the government try to make it available to everyone? That, of course, would be incredibly costly. And what will happen when nanotechnology gets cheap and nearly everyone can afford it? Will funeral homes and cemeteries go out of business and beachfront property get really pricey?

If youre inclined to delve further and do some of your own research on the subject, here are some excellent websites to start with:

www.nanotech-now.com

www.nano.gov.com

www.nsti.com

www.nasatech.com

Enjoy!

Stephen Frey
June 2005

ABOUT THE AUTHOR

STEPHEN FREY is a principal at a northern Virginia private equity firm. He previously worked in mergers and acquisitions at JPMorgan and as a vice president of corporate finance at an international bank in midtown Manhattan. Frey is also the bestselling author of The Chairman, Shadow Account, Silent Partner, The Day Trader, Trust Fund, The Insider, The Legacy, The Inner Sanctum, The Vulture Fund, and The Takeover.

CHRISTIAN GILLETTE strode purposefully down the long main corridor of Everest Capital, the Manhattan-based investment firm he ran.

Christian.

Gillette ignored the voice calling him from behind.

Christian!

Louder this time, but Gillette still didnt stop. He glanced over at his assistant, Debbie, pen and pad in hand. She was struggling to keep up.

Mr. Chairman! Faraday huffed, finally catching up with Gillette, and grabbing him by the back of the arm. Faraday was second in command at Everest. A talented money raiser from Great Britain who had an Outlook full of high-level connections in the Wall Street world. His accent was heavy, though hed been in the States for fifteen years. Wait a minute.

Morning, Nigel, Gillette said politely.

A fucking magnificent pleasure to see you, too, Faraday muttered, breathing hard. He inhaled ice cream constantlyto fight stress, he claimedbut hed been thirty pounds overweight since graduating from Eton. Long before hed ever dealt with the pressures of a private equity investment firm. I sent you three e-mails this morning, he grumbled. You havent replied to any of them.

No time.

One of them was extremely important.

Ill get to it when I can.

Faraday scowled. Im the number two person here, Christian. I need access to you.

Gillette jabbed a thumb over his shoulder. Ive got three conference rooms waiting for me. A guy representing the Wallace Family in One, one of our accounting firms in Two, and

The Chicago Wallaces?

Yeah.

Jesus, theyre worth like twenty double-large.

Following Gillettes lead, people at Everest sometimes referred to a million as large and a billion as double-large.

More than that.

But they keep to themselves, Faraday continued. They dont talk to other investors. Ive been trying to get to them for years, to have them invest with us. But nothing, not even a return phone call. Theyre very secretive.

I know.

Faraday hesitated, waiting for an explanation that didnt come. Well, what do they want?

To hire you.

Really? Faraday leaned back, putting a chubby, pale hand on his chest.

No, not really, Gillette answered, grinning.

Faraday sighed. Well, what do they want?

Ill tell you this afternoon at three, when were scheduled to meet.

But I have to talk to you now.

All right, Gillette said, giving in. Talk.

Hey, its fucking good news. I thought youd want to hear right away.

Good news was always a welcome interruption. What you got?

Two more commitments to the new fund, Faraday explained. I got an e-mail late last night from the California Teachers Pension. Theyre in for six hundred large. And North America Guaranty agreed to invest one double-large five minutes ago. Faraday broke into a proud smile. Were done, Christian. Everest Eight now has fifteen billion dollars of commitments. Im happy to report to you that weve raised the largest private equity fund in history.

Incredible, Gillette thought. And fifteen billion of equity could be leveraged with at least sixty billion of debt from the banks and insurance companies that were constantly begging to partner with them. Which meant he had seventy-five billion dollars of fresh money to buy more companies with. To add to the thirty Everest already owned.

What do you think? Faraday asked. Great, right?

It took a while.

Faradays expression sagged. It took ten months. Thats pretty fucking good.

Eleven years Gillette had known Faraday, and he was still amazed at the Brits language. He didnt care if the guy dropped the F-bomb when it was just the two of them, but there were others around now.

The original target was a year, Faraday reminded Gillette. We beat that by two months!

Gillette spotted one of the receptionists coming up behind Faraday, a middle-aged woman who was waving, trying to get his attention. Yes, Karen.

Mr. Gillette, the commissioner of the National Football League is holding for you.

Gillette watched Faradays face go pale. Theyd been waiting a long time for this call. Two years of work lay in the balance. Transfer Mr. Landry to my cell, he instructed calmly, pulling the tiny phone from his pocket.

Right away, Karen called, hurrying off.