Do ‘ethical’ pension funds have a private equity problem?
By Brett Arends
The people running public pension plans these days like to boast about their “ethical” investment policies, for example when it comes to the environment or “diversity, equity and inclusion.”
Meanwhile they pour billions of dollars into secretive private-equity funds in pursuit of extra profits.
Now comes yet more evidence that some of those private-equity managers in turn are using that money for the opposite of ethics.
“Private equity ownership leads to an increase of 147% in the percentage of… financial advisers committing misconduct” at the firms they take over, report researchers Albert Sheen, Youchang Wu and Yuwen Yuan at the University of Oregon’s Lundquist College of Business. And the number of misconduct incidents per adviser rises by 200% after a firm is taken over by private equity, they add. “The increase in misconduct is stronger in firms with higher post-buyout growth in assets under management per adviser and is concentrated in firms whose clients include retail customers.”
Read more @MarkerWatch
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