7 Ways Private Equity Is Gaming Your Pension

Discussion in 'Wall St. News' started by Banjo, Mar 24, 2015.

  1. Banjo


  2. newwurldmn


    Private equity is a such a shady industry. Carried interest tax benefits, hidden fees, self-dealing, opaque transactions....
    blakpacman likes this.
  3. nursebee


    Pensions are going away.
  4. zdreg


    do you mean the government, when in desperate financial straits, will seize private pensions a' la argentina?
  5. The article is ridiculous and is clearly written to drum up emotion with the average mom and pop investor. Most of the stuff covered is common knowledge for institutional investors and actually not that big of a deal. I work for a pension fund and we invest in a lot of private equity funds, and this article got a good laugh around the office. Yes PE firms can value their own assets during the investment period, but most investors require independent auditors to do their own valuations and all incentive payments can be repaid via clawback provisions if the valuations don't make sense. Side letters are common to almost every investor who has a decent lawyer who knows what they are doing. Just a lot of fluff.
  6. newwurldmn


    Are your realized returns consistent with the posted returns of said funds and the industry?
  7. Returns are consistent between reported returns and audited returns. The only issue i have seen with valuations was self reported by the PE firm. My issues with Private Equity revolve more around the engineering of IRR numbers for portfolio investments for future marketing purposes, which don't necessarily hurt current investors.