The Counting House

by Gary Sernovitz

The Chief Investment Officer of a prestigious university sits at the center of modern hundreds of hedge funds, venture capitalists, stock pickers, bond traders, and private equity managers visit him every year, asking for money.

He helms the engine room of the modern the six-billion-dollar endowment he presides over allows the school to compete for students, faculty, prestige, moral purpose―and solvency. The CIO is a winner in bourgeois America's highest "doing well by doing good."

And then all that he thinks he understands―about investing, about his own talents, about every choice and non-choice that brought his life to where it is―begins to fall apart. At first, slowly, amid endless fascinating conversations with his staff, his wildly talented (and sometimes hilarious) trustees, and the motley money managers that march through his office. And then quickly, in an epic showdown with a reclusive, legendary hedge fund manager, his university's richest and most stingy billionaire alumnus.

With its wry appreciation for the absurd, The Counting House lays claim to the title of funniest novel about American business. Underneath the humor, however, is an unprecedented, necessary story of the inner life of a story that reveals how the workings of our daily lives rest upon the market's unforgiving truths.

"Gary Sernovitz, long one of my favorite writers, has very few literary parallels or precursors. A novelist who writes about the world of big-money finance, but who's also funny, observant, and emotionally acute? Nevermind that he's also a first-class storyteller with a peerless ear for dialogue, The Counting House takes its place alongside William Gaddis's JR and Richard Powers's Gain as one of the most absorbing and entertaining novels about American business ever written." – Tom Bissell, author of Magic Hours

"Not since Liar's Poker has the lowdown on high finance - its hustlers and hucksters, its VCs and B.S.D.s - been delivered with such insider's knowledge or such human comedy. Better this one's a novel! In the university mega-endowment and its beleaguered team of managers, Gary Sernovitz finds an ingenious metaphor for the corrosions of American the 'growth' that crowds out growth, and all the pretty things the money underwrites so long as you're willing to trade away your soul."― Garth Risk Hallberg, author of City on Fire

"Beautiful, very funny and oddly inspiring. A true and hilarious account of what it is like at the coal face of modern high finance, and also a lovely portrait of what it is like to care very much about doing something very hard." ― Matt Levine, Bloomberg Opinion

Gary Sernovitz has spent the last quarter-century working in and observing how money works, from Goldman Sachs to nearly twenty years at a private equity firm where he is now a managing director. He has also brought his keen writer's eye to America and business through two previous published novels, a non-fiction book, and numerous essays and reviews in The New York Times, The New Yorker online, n+1, The Wall Street Journal, and elsewhere.

Genres: Fiction, Business, Finance, Contemporary

285 pages, Kindle Edition

Published November 14, 2023

About the author

Gary Sernovitz has spent the last quarter-century working in and observing how money works, from Goldman Sachs to nearly twenty years at a private equity firm where he is now a managing director. He has also brought his keen writer's eye to America and business through two previous published novels, a non-fiction book, and numerous essays and reviews in The New York Times, The New Yorker online, n+1, The Wall Street Journal, and elsewhere.

A native of Milwaukee and longtime resident of New York, Gary now lives in New Orleans with his wife and daughter.

Reviews

[Grant Mulligan · Rating 5 out of 5]

Genuinely funny. I laughed out loud at scenes where GPs come to make their pitch knowing exactly what it feels like to be the LP in the room. The author captures so many of the GP archetypes perfectly.

As a relatively novice investment professional, the details were educational and the profound questions familiar. The chapter about not re-upping with a past partner for poor performance struck a chord. I’m keenly aware that people are pitching me on their life’s work, and I have to say no 99% of the time. I wish it was possible to say yes or at least be encouraging more often.

I won’t address some of the philosophical questions here to avoid spoilers, but I did write out my own personal answers to the questions raised as a read the book. Not many novels I read over a couple days have that effect. Highly recommend.

[july z. · Rating 4 out of 5]

first office book club read! fascinating because of our direct connection to the subject. i'm going to jot down what i roughly remember from the conversation for future memory-jogging; def losing a lot of nuance / detail! layer 1: is the CIO any good? if performance is a function of intuition and personal experience, what does it mean when performance is mediocre? layer 2: personal purpose: why does anyone do this? this, as in investing — direct and otherwise. what meaning, really, do people find in being an actual cog in the machine of the financial system vs. creating other value separate from the machine but still being dictated by it? yes, capitalism as a method of capital allocation is essential, but to what extent is the financial system, with all its artificial complexities and "rent-collecting," actually necessary? to what extent is this work purposeful? how much impact, really, can one person have, and does that absolve us? the CIO seems to be searching for some complex, meaningful answer; michael hermann delivers something simple and unsatisfying. layer 3: on an economic level, the fundamental misalignment between a truly long-term time horizon (indefinite) and humans' short term existence, which manifests (professionally) in pride / the need to prove oneself and track record-building / fund size-growing. layer 4: different perceptions of wielding privilege and power based on personal background — the "come-up" mitigates the moralizing that leads someone to despise the power they have. layer 5: circles of care, who do you include in your circle of care? and how does drawing that circle of care become a tool for resolving contradiction? michael hermann is a distillation of finance for finance's sake. his circle of care is a pinprick because to draw it any wider — to include a family, his own life, pride & fame, society, the impact of his practice & wealth, firm-building, even — is distracting. he has no contradiction because his motivations, goals, views, etc. are simplified and "pure." but to what extent is this possible, replicable, desirable? an the end (spoiler alert), the CIO chooses to embrace the contradictions and existential crises, coming to believe that we cannot expect these things to be resolved without losing humanity. he returns to where he began, but with new acceptance. joe ended with a perfect quote of walt whitman's song of myself: Do I contradict myself? / Very well then I contradict myself, / (I am large, I contain multitudes.)

[Jessica Wilson · Rating 3 out of 5]

A very accurate recollection of the emotions that accompany a job in investment/ asset management. Loved the dark finance humor. I suspect I will revisit this book in the future and like it more than I did the first time.

[Juan Luis · Rating 5 out of 5]

Funniest book I’ve read in a while. Also really accurate

[Victor Porras · Rating 4 out of 5]

It's hilarious and very well written, but despite having a lot in common with the characters I struggled to make myself care about them. I feel a bit sad knowing that this isn't the author's full time job: he definitely could write better novels than this if he didn't have a day job. The whole book feels like a darkly funny, cynical mid-life crisis.

[Jonathan Hall · Rating 5 out of 5]

Campus novel cum finance novel. Couldn’t have been more tailored to my taste. Guy who might not have the chops or maybe is just subject to external market conditions of chance yet waxes eloquently about it? Boy can I relate (optimistically).

[Omar Ali · Rating 1 out of 5]

Not a fan. I guess I'm not a fiction kind of guy.

[Max Ohnesorge · Rating 4 out of 5]

A fairly dramatized view into the world of endowment investing. The name drops and references are fun. Sernovitz seems to have a bone to pick with LPs lol. Kinda lost me in the back have but finished strong. Worth reading if you want to know what it’s like inside an endowment office.

[Lac · Rating 5 out of 5]

I feel so seen

[Frank Glover · Rating 5 out of 5]

This was a very fun read. I worked on a pension for 10 years and could really relate to many aspects of the book.

[Spencer Wootten · Rating 4 out of 5]

I read this just after Private Equity by Carrie Sun and I think this was considerably more contemplative with respect to why one would choose to enter this line of work. Its less the work/life balance but more the issues associated with having your intellectual capabilities, oftentimes implying your self worth, quantified and compared against your peers every single day.
The story itself necessitates an incredibly niche background in investment -- I would not recommend this to a friend but perhaps a colleague in the same industry -- but is a fun read.
This is a book one needs to read every few years to make sure they are okay with the track they are on. Also, it shows the importance of approaching something incredibly serious with a light-hearted attitude. Work should be fun, at the end of the day.
I look forward to reading it again.

[Duncan · Rating 3 out of 5]

This is a truly niche book, about the inner monologue and daily meetings of the Chief Investment Officer (CIO) of the endowment of a prestigious US university. The material is pretty impenetrable for anyone not intimately related with the world of finance, its lingo, its personalities, and its preoccupations (who John Bogle is, valuation arbitrage, BDS, etc.). The book is absolutely chock-full of references to current events, people and organizations, from most of the top private equity and hedge fund honchos (Pershing Square, Ackmann, Simons, Griffins, Dalio, etc.) to Jay Gould's punctuated equilibrium theory of evolution. In some cases it melds them into the fiction, as when one of the characters (an egomaniacal Silicon Valley founder) is supposed to be dating Emma Watson.

If this is your world, then the book can be very entertaining and funny. Sernovitz has a quick wit and moves very quickly. Despite this, I found the second third of the book a little repetitive, I got tired of the main character's preoccupation with the tension between his perceived job performance, the meaning of his job, and his guilt.

Despite this, the last chapter is genius. I won't spoil it for you; I now really appreciate Sernovitz' ability to carry through with the main character throughout to then have that finale...

[Dee-Dee · Rating 4 out of 5]

Matt Levine-pilled and so when he mentioned this in his newsletter, I knew I had to read it. It's good to know that coming-of-age happens in multiple moments in what is hopefully a long life. Lots of this CIO's doubts and aggravations about the seeming senselessness of finance and yet this strong desire he has to "do well by doing good" that enables him to push past his own internal humiliation is relatable. The book is definitely inside-baseball. I still appreciated it for how it shows how crazy (but also focused) you can get once you really fall into the rabbithole of managing and investing a crapload of money and not fully knowing how you accrete value to the world and to your fund/institution. I think that having this guy be an endowment guy was a good lens for the book because manager selection is a really great area of finance where you can talk for hours about humans vs funds and intuition vs diligence and why investing feels so personal and passionate but can also just be sourced from wanting to make a crap ton of money and seem smart.

[Tab Williams · Rating 3 out of 5]

I honestly don't know if I loved or hated this book. It is very niche focused and the writing style is somewhat schizophrenic and I found it very hard to follow. But the CIO's inner monologue hits the nail on the head.

The book dragged for me - and maybe that is the point with all the pointless meetings. When Michael Hermann enters, it won me back. I cannot help but wonder if that is because his advice aligns with my thinking. That said, the points Hermann brought up were highly uncomfortable to me. Overall, the book hits very close to home. It is hilarious, it is thought provoking, it also hits on any investor's deepest fears.

Overall, I enjoyed the book but would only recommend to a tiny subset. Most won't get it.

[adam · Rating 3 out of 5]

This was the internal dialog of an Investor at a University Endowment going through a mid-life crisis of confidence. It includes humorous indictments of what's wrong with American universities, Wall Street investing, the corporate ladder, "doing well by doing good." Some chapters felt like stand-alone short stories of "the day in the life an investor." This book felt a bit like a made-up, satirical memoir of all the day-to-day, month-to-month, year-to-year, and decade-to-decade silliness of building the "right" portfolio to get "alpha" returns with "managed" risk. If America's business is business (and it is), what a sad state we're in (and we are). At least, we can poke some fun as we go down together.

[Arun Solanky · Rating 4 out of 5]

Interesting, but self-indulgent

fascinating exploration of all the character archetypes you meet in finance: The breezy charlatan-y VC, the doughy LMM PE bro, the furious Goldman Guy

The CIO’s self-indulgent monologues are supposed to be confusing, I get it. The point is that finance is hard, no one actually knows how to consistently make money, and the vanishing few who do are inhuman creatures you don’t want to ape. But it’s fucking *work* to read the CIO’s rambling by the end.

It’s narratively effective, but the prose is honestly questionable.

All in all, an excellent read - if and only if - you work in the industry

[Michael J · Rating 3 out of 5]

It was a tough read for me. The protagonists’ obsession with his colleague’s otherness in the first half of the book was very, very tiring, and almost made me put it down for good, unfinished. It struck me right away that the author was being pretty honest about their own thoughts and experiences in finance through the book, which only made this issue more awkward. The first half is also quite slow, I think there’s some great stuff, like the lie, but I would prefer things got going more.
I thought the final dialogue of the book was pretty good, though, as was the tension through the second half. Don’t regret persevering to the end for it.

[Nicknjeffers · Rating 3 out of 5]

It was funny, and it was mildly intersting, but it was just not, like, that interesting. Not a bad read if you want something funny and financey, but it's not gonna be the best book you read all year or anything. Emotional struggle of the main character was hard for me to care about or relate to, idk, how many crazy workaholics who tie their entire self worth into their jobs do you actually know? do you care that much about them? I dont care about millionaire's prolems, maybe thats myopic of me, idk. funny book though

[Todd Wood · Rating 5 out of 5]

I loved this book. First half of the book was hilarious with its scathing and spot on GP pitches. Then things got a little dark and sad for our CIO protaganst as he grappled with confidence and issues around his abilities to truly generate returns. Then the final meeting with Michael Hermann is a tour de force finale. Overall, the book is not going to be as enjoyable if you aren't directly in the industry (as you may miss a bunch of the funny/hidden references), but still worth reading if you have even a modicum of interest in the world of finance.

[Ray Kluender · Rating 5 out of 5]

Ingeniously funny and incisive portrayal of the CIO of a university endowment enduring a down year. The novel is spilling over with humanity and cutting criticism of the financial system, but also grapples with the meaning of success in our "meritocracy" and the self-doubt that comes when forced to reevaluate your success.

Pretty technical if you're not involved in finance, but Sernovitz respects and rewards his reader.

[Henry Pendergast · Rating 5 out of 5]

This book provides an impressively realistic lens into the allocator world and overall is an entertaining, informative and enjoyable read. Anyone in finance or the asset management space will be thoroughly entertained by this one. The protagonists’s cynicism and frantic compulses are a bit exhausting, but overall this was an awesome read.

[Robby Mitchell · Rating 3 out of 5]

- Good easy read. Definitely written for a small audience but I am that audience. It was fun to read the interactions between the investment team and the fund managers.
- Writing style wasn’t quite my type, quick sentences and paragraphs and hard to tell who was talking sometimes.

[Denise · Rating 4 out of 5]

The last chapter in Hermann's office docked a star for me as it was really too long for life, but overall I loved this book. I live in the investor relations world so it felt relatable and interesting to see from a potential investor perspective on the myriad funds they hosted.

[Wesley Domsalla · Rating 4 out of 5]

This is a really clever and well done book but definitely feels very inside baseball at times. There were some parts that were so specifically funny that I felt like it had been written for me in particular. Really accurately captures high finance in the late 2010s imo.

[Kumar Ayush · Rating 5 out of 5]

Too real, and well rounded story telling. I am glad I came across this.

[Robert O'Reilly · Rating 2 out of 5]

Didn’t read well at all, too much in guys head thinking… didn’t like at all, have to be in finance, asset management world to understand anything

[Michael Ferranti · Rating 4 out of 5]

An endowment fund CIO tries to answer the big question - what’s it all mean? Very financey. Very well written. As Matt Levine said - it made me feel something.

Would recommend.

[Itay · Rating 3 out of 5]

הומלץ על ידי מאט לווין. חמוד, שונה, אבל רפטיטיבי ומעייף מהר מאוד.

[Andrew Epperson · Rating 3 out of 5]

Really entertaining, fast-paced book. Glad I know a little about personal finance…if I didn’t, I could see myself liking this less.

[Nicolas C · Rating 1 out of 5]

Pretentious trash if you are not the target demographic