He applied the Page 69 Test to his new novel, The Navigator, and reported the following:
The contrarian way to look at the Page 69 Test is this: If you tore that page out of the book, would you miss anything important? Viewed that way, all I can say is . . . Wow. I could not have selected a better page for you to meet Warren Hunter—at a moment that’s critical to the plot of The Navigator, a literary financial thriller whose marketing tagline is “Wall Street Comes to Washington.”View the video trailer for The Navigator, and learn more about the book and author at Michael Pocalyko's website.
Warren is the reigning master of the financial universe, the dealmaker at Compton Sizemore, Wall Street’s last real partnership left standing after the financial crisis. He’s about to close ViroSat, the world’s first trillion-dollar deal. On page 69 he’s explaining the state-of-the-deal to his team.“This deal breaks out to be twenty-one percent equity, making our leverage ratio less than four to one. The number is two hundred eighty-seven point seven billion in cash equity at the closing valuation. The remainder is in the debt issues, comprising all of that wide range of legal types you’re so concerned about. The debt encompasses the national contributions and the big bonds. Equity ownership of ViroSat, however, is more closely controlled. All of the required cash is in the assembly process. It will be aggregated in our house account through a rather elegant limited partnership arrangement. So it’s appropriate for me to review with you how we do a limited partnership here at Compton Sizemore. The limited partners hold limited partnership shares. They own the entire economic interest of the partnership, which is just a fund, a collection of cash. The general partner— who is here also a limited partner— manages the fund, investing it, charging just a minimum fee until the project is harvested. In this case, that harvest will happen when we sell ViroSat, because our limited partnership will own one hundred percent of the equity in this deal.”The beauty—and the challenge—of writing a financial thriller is that this form of the novel is intrinsically technical and high-risk, just like the deal world where I live professionally. All of the pieces have to fit together, just like Warren’s ViroSat deal has to coalesce precisely, with tight tolerances.
He let that part sink in. The gang of fourteen here, as the entire investment banking team at Compton Sizemore called them, had not yet heard about the equity funding, the ownership of ViroSat. Until this moment, Warren Hunter had brushed aside all inquiry.
“The moment ViroSat closes,” he continued, “we begin immediately to execute our harvest strategy. No hesitation. After the sale— and I expect a significant run- up in value—we distribute the proceeds. First the limited partners get paid back their original investment. Then the remainder, the gain in the investment, the value we create, is split eighty-twenty. Eighty percent to the limited partners, twenty percent to the general partner. “This is precisely why ViroSat is and will remain a private transaction. This is also why our present structure of closing this preliminary financing, rather than making a direct offering to the public, is critical. No one needs to know the least bit of information about the composition of our ViroSat limited partnership. It is immaterial.
“You may, however, want to know one important feature about the management of this funding mechanism. The general partner, especially with skin in the game, has an incendiary motivation to do well. He also controls each of your personal destinies in the entire financial services industry. That general partner would be me.”
The news took a long moment to digest.
Warren Hunter, limited partner and general partner, was backing ViroSat himself. The deal was brilliant, innovative, and amazing to all of them, it was perfectly legal. He was right. Whoever else he might have in the deal was immaterial. He was not only running it, he was also owning and controlling the biggest deal on the Street. And the Street had become a planet.
This page also showcases one of The Navigator’s most important big themes: The Street has become a planet.
As a reader, it makes you think as you dream, as you’re entertained, as you escape.
The best fiction does that. It’s what I was aiming for right there on page 69.