Private Equity basically a Conglomerate in Drag

That the Head of this 'Private' Equity firm openly states how he controls the CEOs of the companies he controls gives away the fact that PE firms basically are Conglomerates in drag and should never have been allowed to slip under the regulatory mantel designed to protect retail investors from fraudulent investment firms. As a consequence PE promoters enjoy unfair advantages with respect to tax, corporate governance (esp corporate compensation), transparency, treatment of staff and clients. No wonder the universe of listed companies is shrinking fast - and will accelerate if regulations are not changed - FAST!
(6-Dec-2019)
Marketwatch

So what value has Kalanick created?

Without the employees this company is worth Nada, Zilch, Zippo, Nil - so there is a big fault in the 'Market' System and Capitalism if he can re 'rewarded' to generously (or better: excessively). Would be interesting what Bill Gates or Jamie Dimon with all their wisdom have to say to that!
(14-Nov-2019)
Uber founder cashes in big time

Why your Fund Manager/Financial Adviser ignores You

No surprise, there is no proper structure - or even willingness - to incorporate the views of the real end investor/saver into the corporate policies of Fund Managers, Private Banks or other Financial Institutions. All talk about corporate governance is basically only so much (empty?) talk.
(26-August-2019)
Why isnt your mutual fund sticking up for you?

The Real Problem with Buy-backs

Most debates about pros and cons misses the point: buy-backs are an ineffective way to 'return' capital to shareholders. Managements have as much insight about future share prices as the average investor, be it Joe Blogs or a 'Professional'. If shares are bought at too high a level it is obvious value destruction. One might as well have given shareholders cash and let them make a decision about whether to buy more of the company's shares at a certain level or deploy the returned capital elsewhere. The same applies to situations where management considers the shares to be undervalued.
So basically all the buy-back activity is nothing but guesswork and punting on the share price that should not be the task of management. It should just do the job of running the business.
Of course, there is an element of price manipulation - and that seems to be the major factor behind all the buy-back activity. But the sad example of General Electric demonstrates that management should not be able to roll the dice in the stock market casino.
Returning money to shareholders should not mean that some sellers get a (manipulated) exit price while those shareholders that don't sell get no cash - and may or may not benefit from a short-term boost to the stock price. For when buy-backs stop the share price may rapidly drop to the undisturbed neutral price it would trade were there not buy-back activity.

Selling your company to China?

The dispute in Hong Kong is far from being settled. But it does not look good for the (semi)independence of the former British Colony. So why the rush to sell to a company from Hong Kong? And if shareholders should no longer be the primary focus of corporations and rank only next to workers, suppliers, customers and the wider community (however defined) - how much longer and under what rules can these sell-outs be allowed to continue? And what good is served if all this transaction does is making Hong Kong's richest man richer still? And how much tax does he pay and where? No good for anyone if he just piles his riches higher and higher - in Hong Kong (where taxes are low to non-existent) or in another tax "friendly" geography.
(20-August-2019)
Hong Kong's richest man snaps up British Brewer 

I do like to be working for an Association

Nearly as good as to be beside the seaside: to work for one of the Associations that(claim) to work for the good of investors. AFME (also known as the Association for Financial Markets in Europe) pays its top executive £1.7 Mio in 2018 and he is 'understood' to be in line for  £2 Mio in 2019. This is a huge number that is totally out of proportion given that staffing and pay in the sectors the AFME is representing is under pressure. The chief of the Investment Association - a lobby group that is looking after the interests of savers in a more direct fashion than the lobby for market professionals - pockets a relatively paltry£666,000 in 2018. How any of the member firms of these two lobbies can claim to protect the interests of investors/savers is difficult to imagine as they seem to be incapable (unwilling?) to keep their own houses in order.
(19-August-2019)

Climate Change, Diversity, Human Rights, Income Equality

Climate Change, Diversity, Human Rights, Income Equality - all very worthy causes but the solution is not to push business to provide all the answers. That just means that politicians are left off the hook as they should be providing a framework that can take care of these issues.
  • Use too much coal, oil? - There is a simple solution and it is not so prone to be aubused fraudulently than the carbon tax: higher taxes on production/sale.
  • Diversity - simple legislation can mandate ratios for different ages, sexes, even 'races', but get a democratic majority for any law (and please, not just 50.1%)
  • Human Rights - Don't ask managements to judge in which countries a business should operate, again, politics needs to make a (democratic) decision.
  • Income Inequality - no point moaning, too many pieces of legislation further growing inequality and achieve the opposite of what politicians claim they try to.
    (19-August-2019)

Another Public Company disappears in the Maw of 'Private' Equity

In this age of growing concern about Inequality it is a slap in the face of ordinary investors - let alone citizens - if more and more public companies get gobbled up by financial engineers and their conspirators among dominant shareholders and management. Apart from the problem that benefits of the Private Equity industry are disputed - there was hardly ANY private equity to speak of before the mid-1980s and the world was doing quite well without it - the distributional effects are clear for all to see: Who else but promoters of the industry can spend millions on a birthday party? why should public companies show restraint in relation to executive compensation when promoters and their hired guns in management don't disclose their pay packets? They probably get paid amounts that would sometimes be multitudes of what senior executives in public companies can earn. It is clear that mechanisms to protect public shareholders from having their companies taken away on less than attractive terms are not up to the task. Who cares about Wider Shareownership or the Shareholder Democracy? Rome's decline started when wealth got concentrated in the hands of the few.
(5-August-2019)
Springer Buy-out on track

Anyone still thinks that investment fiduciaries should run Corporate Governance?

Who are the 90% that waved through Lloyds Bank CEO Horta-Osorio's pension? The missing link in the whole debate about corporate governance, and inequality in particular, is the lack of any control that real end investors - the man/woman on the street whose savings are at stake - have over the actions that fiduciaries (and fund managers do NOT own any shares!). And make one guess how fund managers associated with Lloyds Bank voted.
(18-May-2019)
Lloyds wins backing for CEO’s pension — but 10% of shareholders dissent

Amundi investors urged to vote against chief’s pay deal

Major problem for the whole governance debate: The 'Shareholders' as the Investment Management Firms and/or Banks are often mistakenly called are in reality nothing but fiduciaries for the real end investors. But they have disproportionate power over corporate policies - and therefore our whole economic (market? capitalist?) system. This is a relatively recent development - just remember that Fidelity was a comparative midget in terms of AuM just 45 years ago, and Blackrock was only founded in 1986. No one seems to have thought of introducing a mechanism that allows end investors - the real shareholders - to influence - let alone control - the governance policies that are exercised on their behalf by these fiduciaries. To add insult to injury directly or indirectly they pay their fiduciaries twice, once with any management fees and again for farming out governance to third parties, known as Proxy 'Advisers'. Not many savers are informed about the fees that are charged by these advisers and how their performance is measured. At best they provide a fig leaf for the fiduciaries and at worst the fees they receive are an outright waste of money as fund managers should be able to assess companies they invest in in a 360 degree fashion, not just if the price will go up or down in the next five minutes. So to conclude: would the great unwashed public agree to pay CEO's the sums they get paid these days? I think the answer should be obvious.
(11-May-2019)
Amundi investors urged to vote against chief’s pay deal