As Sam trembled against me, unsuccessful in her attempts to stifle the sobs, I said, “Let’s grab a conference room.” We walked. And I cradled Sam’s waist, acutely aware of her need to be held. I had been eager to speak with her after the party, all those phone messages. Presented with the opportunity now, I doubted the right words would come.
“I’m sorry to surprise you like this,” she volunteered.
“Come on, Sam. You know better,” I whispered gently. With the meat of my palm, just under the thumb, I wiped a tear from her cheek. “I’ve been worried sick about you.”
“I know.”
“I’ve been trying to reach you all week.”
“I know.”
Sam was monosyllabic. I was one big knot. Humor, my standby for releasing tension, was no help now. It was hardly the time. Ever since Charlie’s funeral I had agonized over what to say, how to soothe my friend from college, a woman who had pulled me back from the brink.
“Sam, I’ve been through this,” I said, helpless and frustrated. “I wish I could say something to make you feel better. But I never heard the words myself, and I doubt they exist. Just tell me how to help. I’ll drop everything, any time, any place.”
“I need to ask you something.” Sam trembled.
Her eyeliner had smudged, but she still looked every bit the Siberian husky. Those blue eyes. That black hair. With my thumb this time, I wiped another errant tear from her cheek.
“It’s weird,” she added, her voice quivering from fear or hesitation or both. “Maybe it’s a favor.”
“Name it,” I replied, empowered by Sam’s request for help. “What can I do?”
“I’m not sure where to start.”
“Just spit it out.”
“I feel so stupid,” she confided uneasily.
“Come on, Sam. It’s Grove, remember? I wrote the book on stupid.”
“Charlie handled all our money,” she began. “Every dime, every dollar, went into the Kelemen Group.”
CHAPTER TWELVE
In finance lingo the Kelemen Group was a “fund of funds.” Charlie invested in hedge funds and charged an annual fee of 1 percent on assets. He also kept 10 percent of profits. If the portfolio grossed $10 million, his shop earned $1 million in participation fees. Not a bad payday.
The company was nothing if not successful. Crunch once told Charlie, “If I had your money, I’d burn mine.”
There was no need. My friend, the fat man with the lean childhood, torched cash. He spent freely, almost drunkenly, flashing and flushing and frivoling away his funds as though the markets would always cooperate. During lavish nights in New York City, Charlie picked up tabs without fail. Dinner for ten at Le Cirque or tickets to the hottest shows on Broadway made no difference. He paid for everyone and everything with crisp hundred-dollar bills. I never saw him use a credit card. Not once.
At times the gaudy display made me uncomfortable. But Charlie told me to lighten up. “Sales 101, Grove. Gotta spend money to make money.”
The marketing budget may have been boundless. In all other ways Charlie ran a tight ship. Modest office on Broadway. Basic computers. No flat-screen televisions tuned to CNBC or Fox Business. The Kelemen Group never
hired MBAs to cull through market-neutral or long-short funds. Nor were there teams of quant jocks building 10,000-line Excel spreadsheets that optimized the right mix among convertible-bond, event-driven, and other money management styles. There were just two employees at the Kelemen Group, Charlie and his fifty-something receptionist named Martha.
“Size doesn’t matter,” Charlie once explained. The comment was no joke. It was the cornerstone of his investment philosophy. “Access to the best managers is what’s important.”
He was right in one sense. The best hedge funds enjoyed more demand than supply. Drawing on provisions from Section 3(c) of the Investment Company Act, hedgies minimized regulatory oversight by limiting the number of their investors. As a consequence, top-performing funds became the Studio 54s of finance. They granted admission or turned away investors from the performance-hungry crowd. Hedgies based their decisions on what people brought to the party—like the size of their checkbooks or whether investors could drive investment performance through industry knowledge.
Charlie celebrated this supply-demand imbalance. “We get into the funds you can’t.”
He used the extravagant parties and charity benefits to build relationships with elite money managers. And it paid off. “For years,” Charlie often said, “my company has been generating twenty percent after fees. Like clockwork.” It never surprised me when hedge fund legends, Alex Romanov or Jason Tropez, showed at Kelemen functions. Both had attended the ill-fated party at the New England Aquarium, Tropez with wife and mistress in tow.
Charlie rejected analytical tools like Sharpe ratios. “Excess return per unit of risk,” he mocked, “give me a break. Math works in the rearview mirror. All the analysis in the world won’t tell you when a manager is about to suck.”
Due diligence was neither heavy nor light at the Kelemen Group. It was unorthodox. Competitors ran numbers trying to identify hiccups in investment strategies, whereas Charlie tried to burrow inside the heads of his managers. “It’s how we make money and keep investors safe.”
During the countless Kelemen soirees, I observed Charlie’s knack for ferreting out information. He knew when husbands or wives were having
affairs. He could detect subtle behavioral twitches, doubt in their speech, the way they fiddled their fingers. He knew who was struggling with their career, who was suffering from substance addiction, and who was hiding some deep, dark secret. Charlie knew the closet sexual preferences among New York’s beautiful people, even the kinky things that reached well beyond the straight-versus-gay question, spankings to wit. He knew who farted at black-tie parties, and he carried matches just for those occasions. He knew where emerging artists found their inspiration, be it Picasso or Monet, and he knew whether anyone had left home in too big a rush to brush. Charlie saw, felt, smelled, heard, and tasted everything.
He just knew stuff. I had no doubt that he brought the same powers of reconnoitering to investment decisions. Sometimes with a few glasses of wine under his belt, Charlie would take a long pull from his glass and say, “You can’t kid a kidder.”
“At least I think all our money went into the Kelemen Group,” Sam said. “Do we keep an account with SKC?”
“You’re kidding, right?” It was not one of my more ambassadorial questions.
“No, Grove,” she barked. “I’m not joking.” And for the first time in my life, I bore the chill wrath of those Siberian-husky eyes.
“Believe me, Sam. I tried to sign you up as clients. I thought you knew.”
“No.”
“I told Charlie to pull a few dollars out of the Kelemen Group. I’d put it into bonds, something safe. But he said it would screw up our friendship.”
“Charlie said that?” Sam asked in disbelief.
“I told him it would screw up our friendship if you didn’t invest with me.”
“What did he say?”
“Doesn’t matter. There’s no account at SKC. I let it drop.” In my profession it was important to know when to back off from friends.
Sam’s eyes softened, and trouble replaced the blue ice. “How long will it take to pull money out of the Kelemen Group?”
“It depends. Who’s the executor?”
“I don’t know.”
“What do you mean?” Money was my turf. My professional instincts were taking charge, chasing the overhang of sorrow.
“I’m not sure we had a will.”
My eyebrows arched, but I said nothing.
Sam noted the reaction. “What good was a will?” she stammered defensively. “We don’t have kids.” She bit her bottom lip, perhaps an unconscious mechanism to hold back tears.
Just as I feared. Kids are always the catalyst. They get parents off the dime.
“Without a will, it may take a while to pull your money out of the Kelemen Group.” I spoke softly but professionally. Now was no time for an emotional response. “The timing depends on ownership. If Charlie owned everything, the state courts will decide what to do with the assets.”
“I spoke with Ira yesterday.” Ira Popowski was New York’s most preeminent trust and estate attorney. For nine hundred dollars an hour, he counseled clients how to die with their affairs in order. His rates provided good reason to live longer.
“But you don’t have a will?” I objected, confused by the revelation.
“His firm filed the paperwork to create the Kelemen Group.”
“Gotcha.”
“He knows nothing about the operations, just that the company was an LLC. And it was in Charlie’s name. He offered to help.”
“Good, we may need him.” It was time to take charge. “Have you called the accountant yet?”
“Crain and Cravath audits the Kelemen Group. I left a message yesterday.”
The joys of small audit firms
.
“Good start,” I said. “What about your personal accountant?”
“Like I said, Charlie handled everything.”
“You don’t know your accountant?”
Sam shook her head no, and in that instant a more immediate concern struck me. “Where’s your checking account?”
“Chase.”
“How much do you have?”
The question hit a raw nerve. Sam hesitated and said, “Charlie deposited
money into a house account every week. We used it to pay miscellaneous bills.”
“How much, Sam?”
“You won’t laugh?” she asked hesitantly.
“Of course not. Just tell me how much.”
CHAPTER THIRTEEN
“Six hundred, give or take.”
“Okay, then. We can work with that.” Sam had prepped me for a modest number. But not that low. Hopefully, my faint Southern accent hid what I was really thinking.
You mean $600,000, right?
“Didn’t you hear me, Grove?” she demanded. “All I have is six hundred dollars. That’s it.”
Sam could not buy lunch for six hundred dollars. The Kelemens had sallied through life with no pretense of fiscal restraint. A party here meant a $50,000 bauble there, or some modest such trifle. There was always a reason to dine at the most expensive restaurants or decorate Sam in the latest haute couture.
“What’s a girl to do without her Birkin?” Charlie once observed, referring to his wife’s five-figure handbag.
Don’t get me wrong. Sam never wallowed in Charlie’s benders of conspicuous consumption. Not at first. She endured it. She was, after all, the product of a frugal Yankee childhood. It took years for Charlie to wear her down, years before she stopped resisting every time her husband uncorked his vintage bottles of excess.
______
“Come on, Sam,” Charlie hollered. “We have to go.” The Kelemens had been married about a year. The four of us were convening inside their apartment before heading to a party in the Hamptons.
Moments later Sam appeared in a crisp blue blouse, designer capris cut just right, and espadrilles. It was a simple look, but flattering and fresh and right for the season.
“You’re not wearing that,” he declared, somewhat aghast. “Not to a tented lobster picnic, for Chrissakes.”
Sam trooped back to her closet and reappeared moments later in a short, almost sheer, safari-style shift, the perfect foil to her runner’s legs. She pirouetted in her bare feet, sarcastically to be sure, but she looked stunning in the wisp of a dress. No doubt, Sam would turn heads.
“Better.” Charlie nodded approvingly.
“I’d rather wear shorts and a T-shirt,” she said. “Don’t blame me if the claws shoot lobster juice all over my dress.”
“What about the shoes?” he asked, ignoring the wisecrack, sending her back to the closet with Evelyn close behind. To me he boasted, “I found that dress at Bergdorf for forty-three hundred dollars.”
“You picked it out?”
“That and most of the other good stuff in her closet.”
After a few minutes Sam returned in a pair of flats that appeared ordinary, nothing special. Charlie believed otherwise. “A woman needs her Chanel,” he crowed.
“I’d be so much happier in fuzzy slippers,” she replied, indifferent to the fashion statement on her feet.
Charlie ignored the wisecrack. “Come with me,” he told Sam. “I know the perfect pièce de résistance.”
The two disappeared. I turned to Evelyn and asked, “What’s the big deal with the flip-flops?”
“Those flip-flops,” she explained, “probably cost four figures.”
“Are they air-conditioned?”
“I love Charlie,” Evelyn confided in a hushed tone, “but he would drive me fucking nuts.” She reconsidered almost immediately. Upon spying the
pièce de résistance, Sam’s chunky cord of pearls, Evelyn admitted, “Maybe I could get used to it.”
Charlie appraised Sam head to toe—the stylish haircut, the pearls, the $4,300 shift, and the four-figure flip-flops. Approval filled his eyes. Exasperation filled hers. Awkward discomfort filled ours.
“Now we’re ready,” Charlie pronounced in triumph.
Those tiffs ended years ago. Sam settled, however grudgingly, into Charlie’s big lifestyle. Over time she even embraced the parade of personal services. My Yankee friend never missed her weekly sessions with Gilberto, the family masseur, or Dagmar, the therapist who had once been a dominatrix. The basics with Crunch, five hundred dollars every other week, seemed downright reasonable. Of course, the pedicures, the highlights, and the facials, even the bikini waxes, were all extra at the salon. All it took was money.
