I didn’t realize Bloomberg was running it today! It’s called How to Make Private Equity Honest. We argue that public pension funds have done such a lousy job of negotiating and overseeing private equity investments that they should lose their accredited investor status if they don’t shape up pronto.
Here’s the opening:
The people who manage some of the country’s largest public pension funds — money that ensures the retirements of teachers, police officers, firefighters and other state employees — say they want government regulators to help them avoid getting ripped off when they invest in private equity firms.
Instead, regulators should push them to do a better job of monitoring the investments on their own.
In a letter last month to Securities and Exchange Commission Chair Mary Jo White, 11 state treasurers, plus the New York state and New York City comptrollers, asked for “better disclosure” of expenses at private equity firms, which typically generate returns by buying companies, restructuring them and selling them at higher prices. The officials’ complaint: The firms have been levying all sorts of suspicious fees without their knowledge, effectively siphoning money away from future retirees.
The accusations are well-founded….
Read the rest here. Enjoy!