28 December 2014

Private Equity getting less 'Private'

I always argued that Private Equity was anything but private. The funds were managed on behalf of the Public who was invested in the funds via fiduciaries in the large pension funds, insurance companies and private banks. That the industry is only now paid more attention (Enter the Secret Garden of Private Equity, NY Times) by the regulators is indicative of the fact that no investor should ever rely on bureaucrats to protect his interests. So the blame should really be laid at the door of the supposed 'fiduciaries' who were - and to a large extent - still are asleep on the watch. Should they not have long ago raised all the points about expenses, fees, performance calculations, conflicts of interest etc.?

11 December 2014

You are not a 'Client' but 'Strategic Money'

If ever you were called a 'client' by your financial 'adviser' at BankAmerica's Merrill Lynch unit you should think about this for a moment: how can you be a 'client' and 'Strategic Money' at the same time? The word client means that you should be protected by the adviser. But if this Adviser is acting as a commissioned salesman it is difficult to think that he will always put your best interests ahead of a sales commission he or she can earn by proposing a financial product or transaction.