How Private Equity Works
Steak 5,000 won
Makgeolli 3,600 won
Chamisul 3,500 won
Beer 3,500 won
Just one word had vanished.
That alone was enough to send customers surging in like a flood tide.
"Steak, please!"
"Whoa……."
"This actually looks like proper steak?"
"At least it looks delicious~."
Steak.
Nobody hates it. Preferences aside, there is pure satisfaction in sinking your teeth into a mouthful of meat.
Chomp!
Happiness.
The only problem is that the weight of the wallet you trade for that happiness is usually more than most people can handle.
"It's so good."
"Honestly, I was looking down on it……."
"They're selling this for five thousand? Is that even allowed??"
When the price is this low, there is no reason not to eat. Even if you are not particularly hungry, you still want to fill your stomach to the brim.
Meat is expensive, after all.
This price shattered that common sense. They called it one serving, but—
"How can they sell it for five thousand? Aren't they losing money?"
"Maybe they're running a high cost-of-goods ratio."
"Is that it? So that's how it's possible?"
At a Korean meat restaurant, two hundred grams is the standard for one serving. What they were plating easily surpassed that generous size. The quality was on par with a dedicated steakhouse.
The only blemish was that they still cut it with scissors like cube steak.
Snip! Snip!
As time passed, even that improved. Once they switched to a kitchen knife and sliced each piece carefully, the presentation looked the part.
"What the hell are those guys doing?"
"Steak?!"
"No matter how badly you want to win, this is going too far!"
It was only a matter of time before the customers gathered. And once that happened—
…….
The competing booth naturally took the hit. Especially when they were selling the same item.
"How are they even selling steak? Those bastards are just thrashing around trying to screw us over!"
"Agreed."
"This is ridiculous. We know the unit costs better than anyone."
ETSD went into emergency mode. Their rivals had suddenly started selling high-end steak. Cube steak no longer even registered on the radar. Customer numbers plummeted.
This is just bad business ethics!
Food prices were left to each club's discretion—but only within the range where you could still turn a profit. Steak for five thousand won? It looked like nothing more than dumping money just to get revenge on them.
"Us?"
They went over to protest. Yujun and Juha.
Sora stared back at them with a completely blank expression, as if she had no idea what they were talking about.
You know damn well!
As club vice-president she was involved in every single ingredient purchase. Money was being spent, so of course she was. She knew exactly how much the meat cost and where to buy it cheapest.
Even if they had somehow secured a cheaper supply route than ETSD—
"That doesn't look like cheap pork neck or chuck eye. Five thousand for this? The cost alone has to be over five thousand."
"What cut is it, oppa?"
"Strip loin!"
The price bracket was completely different. Because he had researched every cut's price while trying to make the best possible cube steak, Yujun recognized it instantly.
We're barely scraping by with hanger steak ourselves.
Best cost-performance. The absolute limit. Raise the grade any higher and you could not even cover the cost of goods. They had managed to bring it in cheap only through bulk buying. Strip loin was not a cut that allowed cost-performance.
"I-I wasn't going to say this, okay?"
"What is it?"
"Once the festival ends we have to submit the purchase ledgers and receipts to the student council. Think you can handle that?"
That was why he was certain this was a bleeding competition. Yujun had not walked into enemy territory without something to lean on. There were rules. This kind of precedent was not unheard of—club grudges that escalated into open fights.
"You know the cost-of-goods ceiling is set at fifty percent, right?"
"Yes, we know."
"W-what?"
"That's why we were selling our cube steak for sixty-five hundred."
The rule had been created precisely to prevent this kind of stunt. He had brought it up as half a threat.
…….
They had done the exact same thing themselves. In truth their own cost ratio was skirting just over fifty percent. They had set the price at five thousand to match the pajeon booths. If someone really set out to cook the books—
"Oppa, what's going on? Why are they so confident?!"
"Ah, shit, I don't know. Let's go."
"What did you just say?"
"What else can we do?! We'll dig into it later. Right now…… there's nothing we can do."
There was no way. Dig too deep and they would be just as screwed. For now they had no choice but to back off.
Damn it, just you wait!
First place in Daedong Festival sales was the club's tradition and pride. More importantly, activity funds were on the line. If that record broke, membership would drop, and they would no longer be able to go out and play as freely as before.
Gulp.
And for it to happen under his watch. He would never be able to face the seniors. That was absolutely unacceptable.
"Drop the alcohol prices."
"From where they are now? Then there's nowhere left to take margin……."
"I don't care, just lower them for now!"
They had to win by any means necessary. Yujun ground his teeth and cracked the whip on the club members, but—
"Work, you slaves."
"Hai, Goshujin-sama!"
Business was flowing smoothly. Compared to before, the number of customers had more than doubled. Of course it had—steak. Even at the absolute minimum it was worth over twenty thousand won.
I'd pulled the classic deal-first bait.
Selling it for five thousand. It would have been stranger if people did not buy.
"Senior."
"What? I told you to work."
"No, it's just…… I have a question."
The customers were not the only ones harboring doubts. Sora seemed to have picked up on something from the earlier conversation as well.
She could think that.
The uninvited guests' point. Thinking it over calmly, it was reasonable. The "steak" really did seem far too cheap.
"Twelve hundred won."
"The cost? We spent over three thousand……."
"Making the numbers work is a manager's job."
The difference between you and me. No need to add the rest out loud. Her puffed-out cheeks said everything. She whipped her head around and went back to work.
There was one thing he had not told Sora.
I said the cost was twelve hundred, but—
That figure did not include his own labor. If he had taken this job as a private equity fund, he would have extracted at least a sevenfold return.
Gulp.
There was no time to light a fire. Instead he had brought whiskey. He pulled out the hip flask and twisted his neck back.
For outdoor drinking, bourbon was still best. The most common Wild Turkey 101. The one difference was that this was the 99 formula.
Ahh~! This is what Wild Turkey is supposed to taste like.
The real Wild Turkey that master distiller Jimmy Russell pursued. Low aging plus intensity. Later, flavor would be sacrificed for mass production. If that was a pity, then it was a pity.
Gulp.
The 99 was rich. A sharp burst of vanilla fragrance exploded through his nostrils.
Same price.
If you put in even a little legwork you could find it and drink it—provided you had the eye to recognize the value of a thing.
Same principle.
Even a restaurant on the verge of collapse could be saved depending on the manager's skill. A stone rolling in the dirt could become a diamond rough for someone. If they had the ability to cut it.
Gulp.
Capitalist society paid corresponding compensation to people like that. A sevenfold margin was by no means excessive.
But he was a student. Being a student had its advantages, and therefore its drawbacks that had to be endured. He decided to treat it as an investment in the future. This club needed to exist so that employees would appear.
"You grilling?"
"Ah, senior!"
"Give me a piece of meat. I'll show you something fun."
"Something…… fun?"
He did not particularly like their attitude either—the uninvited guests. It was not that he cared that much; it was just…… just.
I personally jumped into this petty little job.
Private equity was naturally the lower tier. What people without enough credit did when they wanted to move big money. Once you became famous in the industry, once you had confidence in your skill, you jumped into the bigger pond of hedge funds.
And yet here he was.
Sizzle……!
Doing summer work for the first time in a while. He did not like that the opposing business was hanging on in a half-assed way.
"I can grill the meat myself now. I've got the hang of it!"
"I'm sure you do."
"Senior, you can go rest……."
"But you don't have any sense of style."
He laid the meat on the grill. Temperature a little high. He could handle a strong flame just fine, and—
Fwoooosh……!!
He could play around too. He poured whiskey. A light touch with the torch. Flames roared up wildly, seizing the eyes of everyone inside the booth and every passerby on the street.
"Whoa……."
"What is that? Are they doing a fire show?"
"They're selling steak. The price is five thousand!"
First come, first served. Everyone started running over. From here on, business would only grow more lively.
In reality, doing this doesn't soak the whiskey flavor in or improve the chew in any dramatic way.
The effect was not zero, but it was minimal. Pure performance to draw a crowd. The public enjoyed the image of themselves eating something delicious more than the delicious thing itself.
It raised the restaurant's value.
"It's dangerous and the whiskey is too good to waste, so you guys just use the torch."
"Y-yes, senior!"
"Thank you, senior!"
"Yeah. Good work."
Receiving the changed gazes of his juniors, he returned to the plastic chair.
The method for normalizing a failed business was these three things.
Simplification, profitability, premiumization.
He had put the finishing touch on it with the final fire show. At this level he could easily dominate an entire commercial district.
Gulp.
He rested comfortably. He started drinking again. Suddenly an old memory floated up.
This is why they called me a legend.
Any franchise that passed through his hands was guaranteed to explode. After building it up, he resold it. Fundamentally no different from stocks. Buy what is undervalued and sell it back at its true value. The differences were that he got involved in operations, and that it actually affected reality.
Which is why small problems arise.
In truth it was not a nickname with good connotations. Private equity's image was not good. Prejudices were not created without reason. There was naturally a reason it had become that way.
"We stole all their customers!"
"If steak is five thousand I'd buy it too."
"What are those guys gonna do with leftover ingredients? They'll have to throw it all away, kekeke."
Reality was competition. One restaurant doing well meant someone else was not. He could not claim ignorance. He knew full well it would affect the competing booth's sales.
If the other side goes under, just acquire them again.
Repeat. That seemed to be the process by which he had become a legend. Roughly twenty percent of all the curses he would eat in his lifetime had been eaten then.
He paid no attention to competing businesses or the surrounding commercial district. He pursued only profit. No wonder the image was bad.
Which is why some people called private equity funds this:
Dead (死).
Mother (母).
The motherfucking fund.