Wednesday, 17 September 2014
Last updated 30 min ago
Apr 9 2010 | 1:23am ET
The Blackstone Group is putting its considerable weight behind an effort to ban alternative investment firms from paying contingency fees to placement agents.
The New York-based private equity giant, which owns its own placement agency, the Park Hill Group, has hired a California lobbying firm as part of its bid to see the bill defeated in the California Legislature. Despite the recent pay-to-play scandal at New York’s main public pension fund, Blackstone says that placement agents, which typically get between 0.5% and 3% of the mandates they win for clients, are getting a bad rap.
“It’s just like the state of California looking to sell bonds,” Blackstone spokesman Peter Rose told Bloomberg News. “They would hire a middleman”—a municipal bond underwriter—“to market those bonds to whoever buys bonds.”
But California’s treasurer and the country’s largest public pension fund, the California Public Employees’ Retirement System, which proposed the bill, disagree.
“The contingency fees are too much of a jackpot for placement agents” and “invite corrupt practices,” California Treasurer Bill Lockyer told Bloomberg.
And Lockyer warns that Blackstone and other placement agents should be careful of what they wish for. If the current bill fails—it requires a two-thirds majority vote by the Legislature—he said he will propose a bill to ban placement agents from both CalPERS and the California State Teachers’ Retirement System, the second-biggest public pension fund in the U.S.
Aug 25 2014 | 11:21am ET
As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…
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