Mr. Grady used to tell Lenny: “Value is not what something is worth, kid. That’s a fairy tale. Value is what someone is willing to pay. Or be paid.”
Lenny Brookstein had no respect for Mr. Grady, as a person or a businessman. But the truth of those words stuck with him. Later, much later, they became the foundation for Lenny Brookstein’s fortune and Quorum’s sensational success. Lenny Brookstein understood what ordinary, poor people were willing to accept. That one person’s concept of “value” was different from another’s, and that the market’s could be different again.
I owe the old bastard for that.
The story of Lenny Brookstein’s rise from pawnbroker’s lackey to world-respected billionaire had become an American legend, part of the country’s folklore. George Washington could not tell a lie. Lenny Brookstein could not make a bad investment. After a successful run of bets on the horses in his late teens (Jacob Brookstein, Lenny’s father, had been an inveterate gambler), Lenny decided to try his luck on the stock market. At Saratoga and Monticello, Lenny had learned the importance of developing a system and sticking to it. On Wall Street, they called a system a “model” but it was the same thing. Unlike his father, Lenny also had the discipline to cut his losses and walk away when he needed to. In the movie Wall Street, Michael Douglas’s Gordon Gekko had famously declared: “Greed is good.” Lenny Brookstein profoundly disagreed with that statement. Greed wasn’t good. On the contrary, it was the downfall of almost all unsuccessful investors. Discipline was good. Finding the right model and sticking to it, through hell or high water. That was the key.
Lenny Brookstein was already a millionaire many times over by the time he met John Merrivale. The two men could not have had less in common. Lenny was self-made, confident, a walking ball of energy and joie de vivre. He never spoke about his past because he never thought about it. His brilliant amber eyes were always fixed on the future, the next trade, the next opportunity. John Merrivale was upper class, shy, cerebral and prone to depression. A skinny, redheaded young man, he was nicknamed “Matchstick” at Harvard Business School, where he graduated top in his class, as his father and grandfather had both done before him. Everybody, including John Merrivale himself, expected he would go into one of the top-tier Wall Street firms, Goldman or Morgan, and begin his slow but predictable rise to the top. But then Lenny Brookstein burst into John Merrivale’s life like a meteor and everything changed.
“I’m starting a hedge fund,” Lenny told John the night they met, at a mutual acquaintance’s party. “I’ll make the investment decisions. But I need a partner, someone with a blue-chip background to help bring in outside capital. Someone like you.”
John Merrivale was flattered. No one had ever believed in him before. “Thank you. But I’m not a marketing guy. T-t-t-trust me. I’m a thinker, not a s-s-salesman.” He blushed. Goddamn stammer. Why the hell can’t I get over it already?
Lenny Brookstein thought: And a stammer, too. You couldn’t make this guy up. He’s perfect.
Lenny told John, “Listen. Salesmen are a dime a dozen. What I need is someone low-key and credible. Someone who can get an eighty-five-year-old Swiss banker to trust him with his mother’s life savings. I can’t do that. I’m too…” He cast around for the right word. “Flamboyant. I need someone that makes a risk-averse pension fund manager think: ‘You know what? This guy’s honest. And he knows his shit. I like him better than that sharp, cocky kid from Morgan Stanley.’ I’m telling you, John. It’s you.”
That conversation had been fifteen years ago. Since then, Quorum had grown to become the largest, most profitable hedge fund of all time, its tentacles reaching into every aspect of American life: real estate, mortgages, manufacturing, services, technology. One in six New Yorkers—one in six—was employed by a company whose balance sheet depended on Quorum’s performance. And Quorum’s performance was dependable. Even now, in the worst economic crisis since the 1930s, with giants like Lehman Brothers and Bear Stearns hitting the wall, and the government bailing out once untouchable firms like AIG to the tune of billions, Quorum continued turning a modest, consistent profit. The world was on fire, Wall Street was on its knees. But Lenny Brookstein stuck to his system, the same way he always had. And the good times kept rolling.
FOR YEARS LENNY BROOKSTEIN BELIEVED HE had everything he wanted. He had bought himself homes all over the globe, but rarely left America, dividing his time between his mansion in Palm Beach, his apartment on Fifth Avenue and his idyllic beachfront estate on Nantucket Island. He threw parties that everybody came to. He donated millions of dollars to his favorite causes and felt a warm glow inside. He bought a three-hundred-foot yacht, interior-designed by Terence Disdale, and a private Airbus A340 quad jet that he flew in only twice. Occasionally he slept with one of the models who made it their business to be around him, should he suddenly find himself in the mood for sex. But he never had “girlfriends.” He was surrounded by people, many of whom he liked, but he did not have “friends” in the traditional sense of that word. Lenny Brookstein was beloved by all who knew him. But he didn’t “do” intimacy. Everybody knew that.
Then he met Grace Knowles.
MORE THAN THIRTY YEARS LENNY BROOKSTEIN’S junior, Grace Knowles was the youngest of the famous Knowles sisters, New York socialite daughters of the late Cooper Knowles. Cooper Knowles had been a real estate guy, worth a couple hundred million in his heyday. Never as big as “the Donald,” Cooper was always far better liked. Even business rivals invariably described him as “charming,” “a gentleman,” “old-school.” Like her elder sisters, Constance and Honor, Grace adored her father. She was eleven years old when Cooper died, and his death left a void in her life that nothing could fill.
Grace’s mother remarried—three times in total—and moved permanently to East Hampton, where the girls’ lives continued much as they had before. School, shopping, parties, vacations, more shopping. Connie and Honor were both pretty and much sought after by New York’s eligible young bachelors. It was generally accepted, however, that Grace was the most beautiful of the Knowles sisters. When she took up gymnastics competitively at thirteen in an attempt to distract herself from her ongoing grief for her father, her elder sisters were secretly relieved. Gymnastics meant training, and traveling out of state, a lot. Once they were safely married off, it would be fine to have Grace come to parties with them again. But until then, Connie and Honor heartily encouraged their baby sister’s love affair with the parallel bars.
By the time she was eighteen, Grace’s days as a competition-level gymnast were over. But that was okay. By then Connie had married a movie-star-handsome investment banker named Michael Gray, a real up-and-comer at Lehman Brothers. And Honor had hit the marital jackpot by landing Jack Warner, the Republican congressman for New York’s 20th Congressional District. Jack was already being hotly touted as a candidate for the Senate, and perhaps even one day for the presidency. The Warners’ wedding was all over Page 6, and photographs of the honeymoon appeared in a number of national tabloids. As the new Caroline Kennedy, Honor could afford to be gracious to her little sister. It was Honor who invited Grace to the garden party where she first met Lenny Brookstein.
In later years, both Lenny and Grace would describe that first meeting as the proverbial thunderbolt. Grace was eighteen, a child, with no experience of the world outside her cosseted, pampered East Hampton existence. Even her friends from gymnastics were wealthy. And yet there was something wonderfully unspoiled about her. Lenny Brookstein had grown used to what his mother would have called “fast” women. Every girl he’d ever slept with wanted something from him. Jewels, money…something. Grace Knowles was the opposite. She had a quality that Lenny himself had never had and wanted badly. Something so precious and elusive, he had almost given up believing it existed: innocence. Lenny Brookstein wanted to capture Grace Knowles. To hold that innocence in his hands. To own it.
For Grace, the attraction was even simpler. She needed a father. Someone who would protect her and love her for herself, the way that Cooper Knowles had loved her when she was a little girl. The truth was, Grace Knowles wanted to go back to being a little girl. To go back to a time when she was totally, blissfully happy. Lenny Brookstein offered her that chance. Grace grabbed it with both hands.
They married on Nantucket six weeks later, in front of six hundred of Lenny Brookstein’s closest friends. John Merrivale was best man. His wife, Caroline, and Grace’s sisters were the matrons of honor. On their honeymoon in Mustique, Lenny turned to Grace nervously one night and asked: “What about children? We never discussed it. I suppose you’ll want to be a mother at some stage?”