Category Archives: Private equity

CalPERS Chief Investment Officer Defends Tax Abuse as Investor Benefit

CalPERS Chief Investment Officer made statements to the Investment Committee that are demonstrably false. As a video of the August Investment Committee meeting shows, Eliopoulos apparently does not grasp how a common tax avoidance scheme by general partners is not beneficial to limited partners. Even worse, he failed to mention that the IRS has recently proposed rules to end this tax abuse.

CalPERS Staff Demonstrates Repeatedly That They Don’t Understand How Private Equity Fees Work

The oversimplifications, mistakes, and refusals to answer basic questions by CalPERS staff members at the last Investment Committee meeting of its board suggest that CalPERS has so little understanding of private equity that it cannot responsibly invest in that strategy at all. These errors related to concepts that are fundamental to understanding the economics of a private equity investments and hence to negotiating them.

Senior Private Equity Officers at CalPERS Do Not Understand How They Guarantee That Private Equity General Partners Get Rich

Over the course of the last Investment Committee meeting of the CalPERS Board of Directors, many of the statements made by senior members of CalPERS’ investment staff showed a lack of understanding of basic issues, such as the industry’s economics and how widely-used contract terms operate.

CalPERS’ Private Equity, Exposed: Executive Summary

Senior private equity professionals at CalPERS do not understand the economics of private equity funds, raising questions about the staff’s competence.

Yet More Private Equity Grifting: The SEC Enables “Broken Deal Expense” Con

There’s so much chicanery afoot in private equity that I sometimes don’t write about important aspects on a timely basis. One of the big ones that most investors manage to kid themselves about is how the general partners’ fee structures really work. The widely-cherished fantasy is that the prototypical 2% annual management fee (the “2” […]

You Don’t Need to Hire Rapacious Private Equity Firms to Get Their Returns

A new paper by Brian Chingono and Dan Rasmussen shows how to beat the average private equity fund’s return by a solid margin.

Our Bloomberg OpEd on Public Pensions’ Failure to Stand Up to Private Equity Stealing and Other Abuses

Bloomberg runs our op ed on how private equity investors have been so feckless that they deserve to lose their accredited investor status.

Leading Pension Consultant PCA Shills for Private Equity Firms in CalPERS/CalSTRS Carry Fee Row

Pension consulting firm PCA tells some real howlers in trying to defend the failure of public pension funds like CalPERS to report the “carry fees” they pay.

Dutch Pension Fund Escalates War Against Private Equity Secrecy, Won’t Invest in Funds that Fail to Disclose All Fees and Costs

By challenging the private equity secrecy and fee-gouging regimes, a major Dutch pension fund shows how craven its US counterparts are.

Another Private Equity Scam – Tax Receivable Agreements

As one tax expert put it, “Private equity is a tax gimmick with an acquisition attached.” We’re going to discuss a very big tax gimmick that virtually no private equity investors seem to be aware of. The failure of private equity general partners to publicize a tax scheme that on paper should benefit their limited […]

Winning in Maui: TPP Ministerial Negotiations Fail, with No Date Set for the Next Round

Winning a battle in the long campaign against TPP: It was “domestic politics” that preserved our national sovereignty

Private Equity Shills Resort to Ludicrous Arguments to Try to Deflect “Carry Fee” Reporting Scandal

The scandal over CalPERS’ failure to track “carry fees” has the industry worried enough that it is offering up ludicrous rationalizations.

CalSTRS Doubles Down in Private Equity Carry Fee Reporting Scandal

Memo to CalSTRS: When you are in a hole, stop digging.

State Officials Try to Hide Their Private Equity Oversight Failures by Asking the SEC to Exceed Its Authority

Nothing like elected officials using letter-writing to a weak agency and asking it to exceed its powers to hide the fact that they aren’t willing to do their jobs. And this shirking of duties is particularly grating since these officials, most important of all John Chiang, the State Treasurer of California, Thomas DiNapoli, the New York State Comptroller, and Scott Stringer, the New York City Comptroller, are powerfully positioned to propose legislation to solve the problem they are trying to fob off on the SEC.

IRS Cracks Down on Private Equity Management Fee Waiver Tax Abuse

The IRS has finally decided to crack down on an not-well-known but flagrant private equity tax abuse, management fee waivers. State and local tax officials enabled this practice, which lowers Federal tax receipts and thus hasthe effect of shifting the tax burden off the 0.1% of private equity kingpins to small fry like you and me.