Page 302 - James Caan - The Real Deal

The Real Deal

more I thought about it, the more I thought it was a very good
idea. For starters, I wouldn’t need to raise the money from
investors; I would just use my own cash, which would mean I
could make quick decisions and seize opportunities that other
firms couldn’t. Sure, I didn’t have the necessary legal and banking
experience, but I certainly knew how to hire the best people with
those skills. In fact, I had met many of the best people in the past
couple of months, and I started seriously to think about which of
those professionals I wanted to employ.
I was so excited about the idea – which is the way you ought to
feel when you think you might be about to start a new business –
that I had to talk to someone about it. I approached a number of
the top accountancy and legal firms in an attempt to understand
the structures and legalities of setting up my own fund. While I
was sitting with one of the best accountants in the field I told him
to come up with all the reasons why I shouldn’t do it.
‘It’s pretty complicated, James. To set up a fund, you’ve got be
regulated. There’s a specific legal framework you have to adhere
to.’
‘That all sounds perfectly understandable, but you could do that
for me, couldn’t you?’
‘It’ll cost you.’
‘How much? Ballpark. Just give me an idea.’
‘At a guess, anywhere between £100k and £500k.’
‘OK, now why else wouldn’t I do it?’
‘Well, most people don’t do it because you have to wait for a
return. The typical time horizon on a private equity investment is
between three and seven years, which means you’ve got to be able
to live on something in the meantime.’
‘Not a problem for me. What else should I know?’
‘You’ll have a lot of costs besides your living expenses. You’ll
have rent, salaries, and the kind of people you’ll need to employ
won’t come cheap.’

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