The Valley (11 page)

I helped Max untie our moorings and stash the ropes away in the holds. Back in the control room, he showed me how to turn a key and press a button on the dashboard, so the diesels fired up instantly. With Max standing over me, I reversed out of our berth, swung the boat round in a circle, then motored out of the marina and down a narrow channel that led to a much larger seaway. There were just three gears – forward, neutral and reverse, and the throttle was a simple lever. Only the steering took some time to get used to, because of the delay between turning the wheel and the boat altering course.

Max gestured behind us. ‘That’s Southampton back there. Ahead of us is the Solent.’

I glanced down at a GPS screen on the controls.

‘Don’t look at the instruments,’ he said. ‘It’s like driving a car. If you look at the speedometer every two seconds, you’ll crash.’ He pointed to the buoys ahead of us that marked the deep water channel. ‘Keep to the left of them and you’ll be fine,’

‘Who’s Gerry?’ I asked again.

Max looked at me pensively ‘How much do you know about Alpha Tec?’

‘It’s a hedge fund. Originally George set it up. He funnelled clients into it from England and you managed it from the Caymans. It did well. George left and then you did even better.’

‘Why do you think we did so well?’

I paused. ‘I reckon you took some big gambles and your bets paid off,’ I said eventually.

Max laughed. ‘That’s true. We only used derivatives so every time an underlying share price rose or fell by more than 10%, our value doubled, and we were right more often than we were wrong.’

‘So you coined it in?’

‘The fund did. I didn’t. The person who really cleaned up was George Colebrook.’

‘And that’s why you split with him?’

‘He was supposed to be supplying us with a regular stream of clients. At the beginning, he roped in a few of his relatives and some clients from his old stockbroking firm, but that was it. We had the best performance of any hedge fund, but hardly any funds. And I couldn’t do anything about it. All our clients had to come through FSA-approved advisers like George. I wasn’t even allowed to talk to them. Eventually he brought in Lucy to help. She improved things but we were still sub-scale. And the more she did George’s job for him, the more he had time to question my investment decisions.’

Max ran his hands through his hair.

‘I promise you, John, if I had to explain option pricing theory to George once, I had to explain it a hundred times. Eventually I could not take it any longer, so we split off and set up our own fund.’

‘We?’ I said. I knew perfectly well who he was referring to but I wanted to hear it from Max.

Max lowered his voice. ‘Lucy took my side. Then George found out we were seeing each other and that made him even more difficult to deal with, because he’d always fancied her.’

‘Is that why George didn’t come to Lucy’s memorial service?’

Max flinched. ‘You’d have to ask George. I tried to patch things up with him. I gave him a stake in our fund, so financially he’s done very well. But he took it all personally. He had a bit of a breakdown in the end.’

Max’s voice tailed off. The sea lane was widening now and in the distance I could see the grey outline of the Isle of Wight. Max slid the window across and cold, wet, salty air streamed into the cabin. Leaving me at the wheel he went down to the mess and returned a few moments later with a large paper chart.

‘You turn left here,’ he said, pointing first at the chart and then at an open area of sea that lay ahead. ‘Then keep going for fifteen miles, staying midway between the Isle of Wight and the South Coast. That brings you out of the Solent and into Spithead.’

He prodded the chart again. ‘These are the best landmarks. They are old Napoleonic War forts. You’ll easily see them on a day like this. Keep equidistant between Spitbank Fort and No Man’s Land Fort. Then when you see Horse Sand Fort in front of you, turn thirty degrees so you pass midway between it and No Man’s Land Fort, and hold that course for forty-five minutes until you reach here. That’s where Gerry and I will do our sailing whilst you put the lunch out. It’s all ready. All you have to do is boil the potatoes. Now let’s turn around the boat or we’ll be late.’

He put his hand on the wheel. But I put my hand on top. ‘You haven’t told me who Gerry is,’ I said, keeping the boat on its current course.

Max looked at me. ‘He’s someone we needed at the time.’

I did not turn the wheel an inch.

‘John, you’ve got to understand, hedge funds are all about scale. We were small to start with and the fight with George cost us half our clients. Lucy tried to spread a story that we were shrinking the fund deliberately and that there was a waiting list of investors trying to get in. That gave us some mystique. But the truth was that we were desperate. And then Lucy found Gerry.’

The boat bumped up and down as the sea became choppier.

‘John, I don’t want to tell you too much about Gerry, because then you’ll have no choice except to get involved. But he showed us how we could get rich whilst staying small.’

‘How?’

Max did not say anything.

‘I need to know Max.’

He waited a long time, and then looked me in the eyes. ‘Insider trading,’ he said, his voice barely audible above the engine noise.

I eased back on the throttle and finally turned the wheel. ‘What inside information did Gerry give you?’

‘He didn’t give us any. All he gave us were some pay-as-you-go mobile phones. He had four informants who supplied the information. But they had no idea who we were and we had no idea who they were. They just texted us a simple coded message when they knew a share was going to rise or fall. Afterwards we destroyed the SIM card and threw away the phone.’

‘How many tips did you receive?’

‘Between four and eight a year. That was the whole beauty of Gerry’s system. Each insider was limited to a maximum of two tip-offs per year, so there would be no pattern of leaks. And on our side, I only ever dealt in derivatives so our name never appeared in any register of shareholders.’

‘And you could make serious money on just a few tips?’

‘With derivatives you can, especially if you can predict what will happen not just to the company you have the inside information on, but all its competitors. And all the additional trades make a wonderful smokescreen. Sometimes you would have needed a good maths degree just to understand the position I had taken.’

We were entering Southampton Water again. Max reached across me and eased the throttle back. ‘There are speed restrictions here,’ he said.

‘How much did you pay for this information?’

‘Half a million pounds per year per tip, plus another half million to Gerry for organising everything.’

I whistled softly. Then I looked at Max. ‘How did you hide that sort of money in the fund’s trading book? Even in the Caymans they audit accounts, don’t they? ’

‘The fund didn’t pay it. Lucy and I did, personally. Every year Gerry would give us the name and number of an offshore bank account, and we would transfer the money into it from our joint account in the Caymans.’

‘Jesus Christ! How much were you paid?’

‘In salary, a dollar a year, but if the fund beat the market, we got 20% of the difference as a performance fee. So as long as the hedge fund made at least three million pounds from each tip we were quids in. Lucy and I also owned shares in the fund and they went up in value too. That was another of Gerry’s conditions: we had to keep almost all our wealth inside the fund, so we could never afford to come clean.’

I pointed at the various gauges lining the control room. ‘So how did you buy all this?’

Max smiled. ‘I didn’t. I lease it from a South American oil trader. I pay a bit extra for temporary naming rights, so I can call it the
Glen Avon
, but I don’t own it. The estate in Scotland and the houses in Spain and Chelsea are 90% mortgaged as well. I lied to you when I said I wanted to invest in PropFace in stages for tax reasons. I could no more have written a seven-figure cheque than you could have.’

Max must have seen the concern appear on my face.

‘Don’t worry,’ he said. ‘I can borrow enough against my shareholding to pay the instalments. I’m still a wealthy man, just not quite as wealthy as everyone thinks.’

As we motored into the marina, Max moved behind me, showing me how to guide the boat into its berth. Afterwards we sat on the locker that ran along the outside of the control room and kept talking in the sunshine.

‘So what went wrong in the end?’ I asked.

He shifted in his seat and I saw him glance around at the other yachts moored alongside us, checking that there was no one within earshot.

‘Lucy never liked the Caymans so we started spending time apart. Then she got it into her head that having children would make everything better. It was a crazy idea in the first place, but it got even worse when she couldn’t get pregnant. She did a course of IVF and that made her sick. Eventually she conceived – and everything was wonderful – until she had her miscarriage. Then the black mist really descended, and that’s exactly when the authorities really started sniffing around.’

He lowered his voice. ‘They couldn’t prove a thing but they still hauled us over the coals. And then she received a text from one of the informants. He said he had a really big tip but this time he wanted £1 million up front for it. And it ended with a nasty “I know who you are” message, which really spooked her.’

Below us, I could hear the water splashing against the hull as we bobbed up and down on our moorings.

‘I went to see Gerry,’ Max said. ‘He told me he’d sort it out, but a week later he came back to me saying there was nothing he could do. The price was now £1 million a tip for all the informants.’

‘That would have killed your profit.’

‘Not quite. The fund had more than doubled in size, so my bonus was twice as large as well. But we could see the way things were heading. In a year’s time the fees would probably double again. For Lucy and me, it was time to get out whilst we were still ahead. We gave Gerry one hour’s notice, then we held a press conference and announced we were closing the fund. We went home, Lucy gave me all the pay-as-you-go phones she had left, and I destroyed them all. Or at least that’s what I told her. In fact I kept one: the mobile she’d received the threat on.’

‘Why?’

‘I knew the informant would contact us again, and I wanted him to deal with me, not Lucy. She was already a bundle of nerves. And, sure enough, two days later he sent a text demanding a £10 million termination fee. I ignored it. A couple of days after that, the phone actually rang. I nearly jumped out of my skin. It sounds odd, being surprised by a phone ringing, but this was the first call we’d ever received on any of them. The man on the other end had an Irish accent and he didn’t waste any time. He demanded his termination fee and I told him to go to hell. Then he said “that’s exactly where you and your wife are going Mr Grainger if you don’t pay up.” ’

‘So he did know who you were?’

‘Yes.’

‘And you think this man killed Lucy?’

Max scrunched up his face. ‘After she disappeared, the police showed me a record of the calls made to our house. Just before she set off to meet you in Earlsfield, she received a call from an unregistered pay-as-you-go mobile.’

‘The same one you received the threat from?’

‘Yes. The call lasted for less than a minute and it was Lucy who hung up first. She then tried to call me in Malaga but I’d already gone out.’

I looked straight at Max. ‘Is that all the evidence you have?’

‘There’s something else as well. When I went to talk to Gerry about the informant asking for more money, I realised that Gerry was terrified of him. And then after Lucy was killed, Gerry behaved strangely. Until then, he’d always kept his distance but suddenly, he was very supportive. He took me out to dinner, asked me to go sailing – all that sort of thing. And he kept asking me lots of questions about what the police thought had happened and seemed incredibly relieved when I told him that everything pointed to a ballsed-up burglary.’

‘Have you told any of this to the police?’

‘What’s there to tell? It’s all circumstantial. If I go to the police, Gerry will deny everything. The only guaranteed result is that I will go to prison for insider dealing. And you, my friend, will lose your company.’

‘What do you mean?’

‘My assets will be frozen immediately’ Max said. ‘Correct me if I’m wrong, but aren’t I supposed to be making two more payments to you to pass on to the owners of the company you bought?’

I nodded.

‘Well, you can kiss them goodbye. And the fact that I can’t pay you doesn’t change PropFace’s obligation, personally underwritten by you, to pay them the money. And if the payments are late, they’re allowed to charge interest at 5% a month. You’ll have gone bust by Christmas.’

We looked at each other. ‘Come on,’ Max said. ‘It’s time you went to pick up Gerry.’

‘Aren’t you going to meet him?’

‘Not unless you know how to prepare a boat for sailing.’

‘But he’s expecting you, not me.’

‘That’s easily corrected,’ Max said, and pulled out his mobile phone.

I raised my hand. ‘I haven’t said I’ll do it, yet.’

Max put the phone down very slowly. I knew he was watching me but I gazed out over the jetty. The marina was on the edge of a small town. On a Friday morning, its residents would be living normal lives and doing normal things. Somewhere in the skies above us, Angela might even be on a plane, heading into the UK, so we could spend a weekend together.

‘Please,’ Max said.

I turned towards him. He was resting his chin on his fists, which were clenched tight.

‘I can’t bear it any more,’ he continued. ‘I know she won’t still be alive but…I just want to know what happened, that’s all.’

For a long time, I did not say anything. And when eventually I spoke, it was in little more than a whisper.

‘Okay, but no guns, Max. If it gets nasty, we stop and go to the police. Immediately. Is that understood?’