Finance attracts the mother of all bullshitters. The most skilled you’ll find anywhere. That’s because in this sector the bullshit often – though not always – needs to be polished like a diamond to work. That is, to get people to part with their money. And the sums are higher than most other sectors.
These scumbags in question hail from all over the world. Mayfair, where I spend most of my days, sees them all. Every day. In all colours. All sizes. You find them here in London because the city is one of the biggest pools of capital. The world’s richest families if not based here will very likely have a branch in the Capital. London has been a magnet for money for many years. Several months ago I was on a phone call with a long time friend from Turkey. It was a personal catch up. At some point in the conversation when speaking about domestic politics he said, “Two of the 10 largest families have moved assets to London.” Not the first time I heard something similar. Whenever the shit hits fan somewhere around the world, money tends to flow towards this island.
So this story takes place one afternoon this past Spring in an office close to Regent’s Park belonging to a friend of mine, who once served as CEO of a GCC bank and then later as the right hand advisor to one of the wealthiest families in the region. Presently, he is helping a vehicle belonging to a few GCC royals and several major family offices invest in Real Estate across Europe. He called me up that morning and asked if I could attend a meeting. Let’s call him Ahmad.
“As you know, we are always looking to meet new investors who can invest alongside us and I met these guys who claim to have unrivalled access to capital currently looking to co-invest into Office, Student and Industrial properties across Europe,” said Ahmad. “Could you join me?”
“Sure,” I said.
The reason he asked me to join was not because I’m a real estate guru, though it is a sector I know a little about. Instead, he wanted someone he trusts to be there with him.
A few hours later
“This is my colleague Ali” said Ahmad, introducing me to two very sharply dressed male individuals, Raphael and Mike.
I said a few words about myself, purposely keeping it very brief and vague.
Raphael was the younger one of the two. He had short dark hair and wore a grey suit without a tie. He had a thick French accent and was in his mid-30s. On his left wrist he sported a watch the size of a tea saucer. It was meant to give onlookers the impression that he was hot stuff.
His partner Mike was English and in his late-40s. He conserved his words but when he spoke it was with gravitas. I preferred him.
Raphael did most of the talking. Even as Ahmad spoke about the vehicle’s investment criteria for assets in Europe, surely one of the most critical things to pay heed to, the Frenchman kept interrupting to make points related to how many investors he knew and how many deals he’d done. He was in ‘show off’ mode.
I don’t claim to be good at many things but one of the things I am halfway decent at is smelling a bullshiter. And sitting there across the table from me was a bullshitter. I sensed it the moment our eyes met. His mouth later confirmed it.
It was clear Raphael liked to talk, mainly about himself. And I let him indulge himself.
Sometimes it’s best to hand the podium over to suspected bullshitters. They dig their own grave.
About halfway into the meeting, Ahmad asked Raphael to give an account of some of the recently deals he’d successfully raised capital for. Raphael, unsurprisingly, jumped at the opportunity.
“The last transaction I did was a co-investment deal into a UK hotel” said Raphael. “My investor put in approximately £25 million.” He went to describe to provide an overview of the deal and the structure of the investment.
“Thanks,” said Ahmad. “That useful. Could you tell me about a larger deal you’ve worked on? To be frank, we tend to target large assets or sizeable portfolios, which can require anywhere from 50 to 100 million pounds in equity. Maybe more.”
Raphael spat out the next sentence rapidly.
“I helped XYZ from Chicago, raise half a billion dollars from investors in Europe,” said Raphael, firmly. Afterwards his face broke into a wide smile.
The words had come out without the slightest hint of hesitation.
Ahmad raised an eyebrow, impressed. He had little experience with US-based real estate players and had, in fact, not heard of XYZ before.
I, on the other hand, knew XYZ. Coincidentally, I had just had breakfast with the owner of the firm, the President and also the head of investments at the Four Seasons the week prior. On top of that, XYZ was speaking to me about helping them access some of the Scandinavian pension funds I know.
I kept quiet. While Raphael carried on bullshitting, I took out my phone and sent a message to the head of investments, who I knew was engaged in all conversations with external capital partners. I sent the message, “Have you heard of Raphael XXXX from firm XXXX. Apparently, he raised you USD500m.”
Ten seconds later my phone went beep. I looked down. The message read. “Never heard name.”
The meeting came to an end and we said our goodbyes. I rushed off to my next meeting on Conduit Street.
Later that day
In the evening I rang Ahmad and told him what I’d learned.
“I even spoke to them on the phone and had them ask around” I said. “Nobody has heard of Raphael.
Ahmad was taken aback.
“Don’t waste your time with him,” I said. “He’s a bullshitter.”
Look, some level of bullshit or flavouring to show off a little is natural. Everyone wants to look good. And there are times when people exaggerate a little and it is benign, even amusing. But when you tell people you’ve raised half a billion dollars single-handedly for someone and led the transaction, that’s a bit much!
I try to remind myself of it often: just keep working hard and add value and everything will work out. Sure, there are bullshitters like Raphael who have people occasionally fall for their lies and traps, and they may occasionally profit from it. Maybe even make lots of money in the process. But from my experience that will only work a limited number of times because eventually word gets around. And when it does, your reputation goes down the toilet. Then, it’s practically impossible to change people’s perception of you.
There was a time I used to get real annoyed at a Raphael type. Now, when I see one I smile and view them as sad characters on stage in a play that will end poorly for them.