Challenging Private Equity Fees Tucked in Footnotes


How much do private equity investors pay to the firms overseeing their portfolios?

You might think such a question would be a no-brainer. But in the supersecret world of private equity, it is anything but. That’s why John Chiang, the treasurer of California, recently called for legislation requiring full transparency in the reporting of fees charged by private equity firms.

In an Oct. 12 letter to the California Public Employees’ Retirement System and California State Teachers’ Retirement System, Mr. Chiang urged both organizations to help him devise legislation to solve the problem of investors who “pay excessive fees to private equity firms and do not have sufficient visibility into the nature and amount of those fees.”

You might think this issue has little to do with the rest of us. But tens of millions of people have entrusted their retirement to pension funds and other big firms with substantial stakes in private equity investments…

Challenging Private Equity Fees Tucked in Footnotes

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