Category Archives: Private equity

SEC Official Effectively Thanks Gretchen Morgenson and Mark Maremont for Embarrassing Private Equity into Cleaning Up a Tad

The SEC’s acting director of examinations gave a progress report a year after his predecessor exposed widespread misconduct in private equity. But is the agency goingfar enough?

Private Equity Standard-Setter Confirms That Investors Have No Idea What Firms Charge Them

Investors keep their heads deeply in the sand as far as the true cost of investing in private equity is concerned.

Control Fraud and For-Profit “Universities” (Et Tu, Bill Clinton?)

Bill Black’s formula for accounting control fraud applied to for-profit universities like Corinthian and Laureate, with a swipe at Laureate’s Honorary Chancellor, Bill Clinton.

We Made an SEC Private Equity Whistleblower Filing

We made an SEC whistleblower filing based on an astonishing admission by a private equity firm, Riverside Partners.

Carlyle’s Private Equity Secrecy Overreach

Carlyle pushed a private equity investor to redact large sections of a private equity agreement before releasing it. You can see those redactions exposed.

More Barbarians at the Gates: Private Equity Puts Primary Care in Play

Via the work of the Health Care Renewal website, we’ve warned of the push for corporatized medical care and the danger that poses to patients. Here is another push to extract profit from bodies, that of private equity’s new appetite for primary care practices.

Investors Like CalPERS and New York City in the Dark About Private Equity Fees

This anodyne-seeming section from a video at Privcap on The Future-Proof LPA [Limited Partnership Agreement] contains a real bombshell

The SEC’s Andrew Bowden to Leave the Agency

From the SEC this morning:

The Securities and Exchange Commission today announced that Andrew Bowden, Director of the Office of Compliance Inspections and Examinations (OCIE), will leave the agency at the end of April to return to the private sector.

Rahm Emanuel and Rick Perry Hold Public in Bipartisan Contempt

Lambert here: This post is short and sweet. It’s worth reminding ourselves that on some axes of evaluation, Republicans and Democrats are far more alike than different.

SEC Starts Issuing Wells Notices to Private Equity Firms (Updated)

We tweeted last week:

Rumor from a private equity source: "Heard a bunch of alts firms got Wells notices from the SEC"

— Yves Smith (@yvessmith) April 2, 2015

Our source was correct.

Ex-TPG Employee Adam Levine Countersues, Charges Private Equity Firm With Cheating and Misleading Investors, Retaliation

Adam Levine’s whistleblower suit against TPG has the potential to do real damage to the giant private equity firm.

Presentation Shows Private Equity Investors Knowingly Sign Contracts With Waivers of Fiduciary Duty, Other Terms Stacked Against Them

We’ve pointed out that private equity investors, known in the trade as limited partners, enter into agreements with private equity firms that do a terrible job of protecting the investors’ interests. That sad reality is contrary to the urban legend propagated by the general partners, that the agreements are negotiated, that the limited partners are sophisticated and understand full well what they are getting into.

The evidence on the ground strongly suggests otherwise. Today, we’ll go through a document presented by a top lawyer for limited partners that shows how the general partners continue to skew the agreements even more in their favor, yet the outside legal guns fail to beat back these terms.

SEC Regulatory Capture Scandal: Andrew Bowden’s Fawning Over Private Equity Was No Mistake

Two weeks ago, we discussed how the head of the SEC’s examination unit, Andrew Bowden, gushed about the private equity industry at a conference at Stanford Law School, including joking about how he’s told his son to work in the industry.

Defenders of Bowden might argue that he had the government official version of a bad hair day, attempting to inject some levity in a dry conference and having the remarks go wildly off the rails.

But it turns out that Bowden has been making the same type of statements, save the “Gee it would be great for Cole to work in private equity” part since at least last fall.

Los Angeles Pension Fund Gives Up to $40 Million Approval Authority to Hopelessly Conflicted Consultant, Hamilton Lane

It often seems hard to fathom is how supposedly sophisticated investors like public and private investment funds give private equity firms so much discretion with inadequate oversight and controls. Try as they might, it is impossible for limited partners to find seasoned advisors, such as pension fund consultants and attorneys, who are not beholden to private equity sources of income.

We’ll look at a case study today, that of a top pension fund consultant and one of its clients, the Los Angeles City Employees’ Retirement System, or LACERS. As you will see, the Hamilton Lane reports do not contain sufficient business and financial analysis for a potential investor to make a reasoned decision whether to risk a substantial equity investment. Their role is to provide due diligence theater.