Fees for Free
How similar is this to what's happening in Chicago? This is in New York:
- Wall Street managers were paid an astounding $708 million in fiscal year 2015 to handle the city’s pension system — but did such a terrible job that taxpayers were forced to cough up $9.9 billion to make up for their shortfalls.
Most of those costs, moreover, were kept secret.
Management fees jumped by $178 million from $530 million the year before. But Comptroller Scott Stringer says the “vast majority” of the increase stems from the discovery of previously undisclosed “incentive fees.”
These up front fees, non-performance based fees, would appear to be a major drag on pensions. And if history is any indicator, the "managers" are surely connected to New York politicos, and we can't imagine the same thing isn't happening here, right down to connected firms getting their fees up front.
Labels: pension
posted by SCC at 12:11 AM
24 Comments:
Did Vanecko and Davis relocate to New York?
That's why a 401k plan is a rip off. Too many fees when you want to cash out.
Gold, silver, and land are better long term investments.
Geeze... It isn't the fees that make these guys filthy rich.
It is the stock sales ad manipulation. If one of their friends has a stock he knows will tank he up the price and sells it to the pension fund. So who gets the loss.
The same goes true with our deferred com.
In this day and age a computer could be programmed to manage these portfolios.
Municipal employee pension monies are the last
of the relatively unmolested, un-fucked-with, "sweet honeypots"
of money left in this nation.
And it's driving "financial experts" like You-Know-Who
crazy that they can't steal it all in one fell swoop.
The Wall Street and LaSalle Street bunch are on a BIG nation-wide
push to bust-out defined benefit Police and Fire pensions and dump
them into "financial vehicles" (mis-) managed by THEM for tidy remuneration.
Hmmm...
Doesn't Rahm al-Ghoul have an interest if not actual investment
in the muni employee pension management racket via Rauner?
What about the other members of the North-Shore/Gold Coast
Cocktail Party & Progressive Political Fundraiser set?
No wonder Rahm The Lick-Hitter moved Heaven, Earth and a few
of the more upscale precincts of Hell to have himself established
as a Chicago resident so he could run for and win the mayoralty...
Buccaneers seeing where the "X" is on the map...
By the time anybody with a large enough and compelling
enough fuck finally gives it, Rahm will have pirouetted his
maniacal ass back to D.C., there will be a smoking crater
where our pension USED to be and Policemen will be fighting
the rest of everybody else for the last passable onion to mince
into that 3rd rate can of tuna...
Oh yeah.
Meanwhile... The Chronic Non-Contributor class of people & folks
are being waved ahead by Hollow Dude in the Oval Office.
The "Fundamental Change In America" that willfully ignorant m/fers
voted for...
All the hateful shit-talk about Police pay and benefits started because
there was a great need to separate Policemen from the public good will.
Seriously... Supposedly enlightened and politically savvy people
are giddy at the prospect of our pension system being intentionally
imploded beneath our feet.
Remember all the media chatter about "All the cops get sweet early
retirement in their 50's with cush $100K pensions at taxpayer expense!"
The air was thick with outraged but misdirected screams of "Shared
Sacrifice" and "Give Some of That Money Back You Lazy Bums" etc, etc...
Why do you think Rahm fought to hold off on making the overdue
balloon payment?
He was hoping that "reform" (cuts, legal ass-coverage to further
delay/avoid making payment) would already be in place.
Long game...
Burning rail cars of taxpayer money to steal from people who
patrol the tribal areas of Chicago for 20, 25, 30 or more years.
You know... Where the bloody shit-mud runs
through the streets thick, fast and deep.
"Why are you Cops always so mean, angry and hateful?
Aren't there rules against that? You should act more like
humble and lovable public servants instead of a bunch of
pissed-off some-kind-of-phobes..."
De Blasio has a bunch of people to pay off, and based on HIS piss poor performance, he will not get a second term to spread the payoffs out.
In the old days, they'd at least try to hide it.
Now it is blatantly in your face and F-You! Do something about it if you can peasants!
And we just suck it up and take it.
The common, very well known to anyone who deals with hedge funds fee structure is "2 and 20." Meaning 2% annual management fee and 20% of new profits beyond their previous "high water mark." Managers always report performance net of fees so those who are evaluating their performance can compare apples with apples. Incentive fees are by their very nature performance based and not "upfront."
Keep up the good work.
-Appreciative citizen.
does Ari Emmanuel Pension Mgmt LLC have the NY contract? The Rahm Crime family is now expanding all the way east
And what was Police and Fire turnout at the last election? 10%? You get what you ask for.
I'd like to see Rahm's books. I've seen just about everything else.
Now, kees me you fool!!!!
Wall street says "heads we win, tails you loose."
No pork there....some folks are getting rich, sure the hell isnt anyone I know.
Don't have to go to Wall St. for ridiculous performance bonuses.....our own federal gov't pays them out to complete fuck-ups who can't even do what they are employed to do:
http://www.usatoday.com/story/news/politics/2015/11/11/veterans-affairs-pays-142-million-bonuses-amid-scandals/75537586/
Your tax dollars at work.
The greatest financial years ever and they lost money, we are screwed.
Maybe the occupy people aren't wrong.
We should find out who all of our enemies are, individually, by name, the ones who would despoil us, and act in our own defense against their machinations. All within the bounds of the law, of course. Knowledge is power, lads. Our enemies have their vulnerable points, undoubtedly they are guilty of some form of chicanery that could lead to them getting busted out upon being revealed or charged. News reporters, aldermen, judges, mayors, commissioners...
Or we can continue to be complacent sheep waiting for the slaughter.
The time is coming brothers when we will have to organize and act, not in our own individual self interest, but for the good of us all.
By our lawful actions, we can send these faithless manipulating criminals packing. It would do good not just for us, but for the public in general.
more free stuff "Million student march" walking out of college!
http://www.breitbart.com/big-government/2015/11/12/live-updates-campus-crazies-on-million-student-march/
Enough of this garbage revoke the aid from all of them, tired of taxpayers helping these idiots, but they have "demands" mommy and daddy taught you well!
Yet like when the pension board gave 60 million to daley/vanecko and they lost all of it no one went to prison! The feds really need to gut the pension board to find out what morons threw our money away, was there a "kickback?" Or just blunt stupidity? Mike Lappe you won again, maybe you could look into this and advise who did this? 60 million now that is real money it is "our money!"
How can u expect to get your money invested without paying a fee
This is how The Daley Family made its fortune. Use city money to invest, collect your fee, the fund tanks, you already got paid. The investment firm moves on without scrutiny for years, pyramids a few good portfolios, sells its successes (like a Rauner) then dumps everything (LLC) and starts up under a new corporation.
Anyone without an inkling of plumbing or general labor experience can form a municipal Sewer inspection company or WiFi service provider and make a pretty good living parlaying each and every sham company they can think of...and then going out of business to start a new venture. Not much has been reported about Cardinal Growth has it, even Rauner had some of that action.
When Rahm says Ohare Airport is an economic engine, he ain't shittin'. There's a perfect example of cronyism, corruption and unaccountable revenues that only a very few get to partake. It's creative accounting could make City Hall look like a Fortune 500 operation.
So the next time you here how the city is broke its bs. Profits are plenty and that bounty is lining the pockets of some politician.
Whomor What does it take to have a connection to the big deals like Byrd-Bennet or Amir Ahmad?
Ask Rahm, your choice for mayor, again.
What a sick and disgusting story! You can bet there is just as much waste in Chicago. If Charles Schwab Merrill Lynch etc.etc. operated like that there would be no one investing with them. How sad. Scum bag politicians and their pals at work.
As 'Appreciative citizen' noted above, hedge funds fees are typically 2 and 20. However, investment performance is reported to the institutional databases both gross and net of investment management fees. Gross performance - not net - is used for comparisons because clients typically negotiate lower fees and different clients pay different amounts.
Most pension money is not invested in 'alternative investments' aka hedge funds, rather it's managed as a separate account - in a manner similar to other clients' with similar objectives - by an institutional money manager. While the stated investment management fee may be 1% per year, the negotiated fee earned by a bond manager is often only 10 to 15 basis points (0.10% - 0.15%) and a stock manager, 25 to 35 basis points - with $100+ million accounts though the fees add up.
So where's the 'fraud', its (a) hiring unqualified / under-performing friends of friends and / or not terminating them in a timely manner and (b) in 'finder's fees' paid to solicitors that raise money for the large money managers. Money managers can't legally raise fees to compensate for a finder's fee; however, they do indirectly reduce the bargaining power of the client. And, often, the reason for using a finder is that they're connected and the client will therefore easily pay a higher than average (negotiated) fee.
Another appreciative citizen that's also a money manager
"Wall Street says "heads we win, tails you lose."
11/12/2015 10:00:00 AM
...or "It doesn't matter whether it's going up or down as long as it's going." No money in stability -- constant churning and turmoil are what is required.
Get a good bar fight going -- "I just saw this b__ch slash your tires out back!" and then stand clear so you don't get hurt, and maybe you can slide a dropped wallet away with your foot, or lift an expensive leather jacket off a stool and stroll out the door while the fools pound on each other...
Great economic model, huh?
Bad sign -- scrap metal yard here shut the gates and put up a sign, "CLOSED DUE TO MARKET CONDITIONS." Noon biz report today, "consumer holiday spending is not going to be able to pick up the slack for the China-triggered industrial recession."
Don't worry, be happy.
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