Is private equity ripping off retirees?


New York Times reporter Gretchen Morgenson recently wrote a startling piece about how private equity firms allegedly steal from their investors by shifting expenses associated with attorneys and other outside vendors. Essentially, her argument was that private equity firms receive discounts for legal work done on the firms’ behalf, but pay full freight on legal work done for the firm’s investment funds (which are primarily financed by institutional investors like pension systems and university endowments).

In other words: Cut us a break and we’ll bring you extra work. Quid pro quo.

Most of Morgenson’s evidence came from publicly-available documents filed with the SEC by private equity firms, including Apollo Global Management [fortune-stock symbol=”APO”], The Blackstone Group [fortune-stock symbol=”BX”] and The Carlyle Group [fortune-stock symbol=”CG”]. The trouble, however, is that these were top-level documents that didn’t include information on any specific arrangements, nor any expense breakdowns. For example, here is…

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