Do you understand the fees that you pay for Private Equity?

If even very large institutional investors have difficulty understanding the various fees that are charged by Private Equity firms it should be obvious that any investor should have intense scrutiny performed before allocating any funds.

Oil won't hit $80 for decades?

Prediction is very difficult, especially if it's about the future. A useful reminder for this Strategist. (CNBC)

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.?

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.

Are IPO's more than Get-Rich Scheme for the Promoters?

Looking at valuations imputed by the pricing of new issues one can only wonder if saving to invest in Equities can really ever provide a solution to the looming retirement crisis or the widening wealth gap between the rich and the rest of the population. What is really sad is the willingness of the media to be nothing but a marketing platform for the promoters of new issues. Case in point: The listing of Fever-Tree, a producer of drinks. This company sports a turnover of £28 million on an annualised basis but the IPO values the company at £154 million. This may or may not be the right valuation for this company (the backers had even hoped for £200 million!) but it is beyond me why respectable publications abstain from giving an opinion on the merits of this valuation. If anything, that is the most important piece of information that readers would deserve to find. More than 5 times revenues needs more justification than a homely write-up about how the founders started the business.

Are you paying for Broker Junkets in Hawaii?

A clear sign that the Brokers (as well as Private Bankers) are above all else supposed to generate commissions. That is how they are measured, not how well they manage their clients' portfolios. Have you ever tried to get a clear performance statement before engaging someone to run your money? It compares with having your teeth pulled out. If you get a decent performance for your portfolio you should also check whether it was pure luck or real skill that was behind the numbers.

For Top Brokers, Junkets are back, Hello Hawaii (Wall Street Journal)

The bad guys are after your Money!

It just so happens that the bad guys are (in no particular order) regulators, politicians and bankers. All the people that you think are employed to look after your interests! But in reality they need someone to pay for the bankruptcy of their policies while at the same time receiving generous pay from the taxpayer/customer.

Different types of Financial Advisers

This article may not be all that helpful for anyone who is not a finance professional but it contains some useful pointers that shed some light on the choices that investors have when selecting a financial adviser. (NY Times)

14 Questions to ask your Financial Adviser

Not all of these questions can be answered easily and detailed analysis may be required, but they are a useful start when looking for an Adviser.

S&P Studies on Investment Fund Performance

http://us.spindices.com/resource-center/thought-leadership/spiva/

http://www.spindices.com/resource-center/thought-leadership/research/