|BERKELEY SQUARE, MAYFAIR|
Have you ever wondered what a hedge fund is? I mean, I can tell you that a hedge fund is a company registered in the Cayman Islands, and that people around the world put money into it, and then it uses that money as collateral to borrow a bunch more money, and uses that to bet on various things like company shares, commodities, bonds, and derivatives…
But does that really tell you what a hedge fund is? To know what a hedge fund is, you should try run your hand over the golden plaques on the doors around Berkeley Square. The names seem unfamiliar, but this is a ring of fire, and these companies are sorcerers channeling enormous circuits of cash. The old facades hide computer networks sending orders to transact in every market on the globe. In fact, I’d give you 2:1 odds that there’s someone in that inconspicuous building over there that’s about to execute a trade that will affect the value of Russian mining companies in Siberia.
But where’s my good coffee? I know where it is. Lansdowne House, 57 Berkeley Square, houses one of the world’s largest private equity companies – The Carlyle Group on floor 3. Those guys must have good coffee. Have you ever wondered what a private equity company is? I mean, I can tell you that a private equity company runs private equity funds, registered in the Cayman Islands, and that people around the world put money into those funds, and then those funds use that money as collateral to borrow a bunch more money, and use that to buy and sell companies.
But would that really tell you what a private equity company is? To know what a private equity company is, put on a heavy Russian accent, walk in and tell the Carlyle Group that you’ve got an ailing Siberian mining business that needs restructuring – they’ll take you to their meeting room and give you good coffee.
|LANSDOWNE HOUSE, COFFEE SHOP FLOOR 3|
Then you can head back to Green Park tube via Berkeley Street. You’ll pass Glencore. It’s Swiss, and it’s one of the world’s largest privately owned companies. The UK office is by the Sainsbury’s on the corner. They’re huge in the global commodity scene, and they’re only about to get bigger, with a gargantuan IPO* planned. They’ve historically not been too transparent, and, word on the street is that commodities can be a dirty business at times, with all that Siberian mining. This area looks posh, but it’s not – it’s all cowboys, assassins, and oligarchs.
*(refers to initial public offering: selling shares of ownership to raise money)