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> It’s hard to avoid the idea that my confusion [...] is resolved by noting a principal–agent problem where the PE managers get paid a ton so intermediaries can
by Karellen 4y ago
> It’s hard to avoid the idea that my confusion [...] is resolved by noting a principal–agent problem where the PE managers get paid a ton so intermediaries can then report unrealistically rosy assumptions and unrealistically calm returns. The chickens come home to roost only if long-term returns no longer beat public markets [...] But both parties involved, principal and agent, may be assuming that in ten-plus years that’ll be someone else’s problem.
So... because "rules are for the little people, and I've got my commission, so fuck you that's why"?
- pixl97 4y agoHe who has the gold makes the rules!
- nl 4y agoBackers of PE funds are not "the little people". As it says elsewhere "it takes two to tango" in this game.
- fragmede 4y agoYes but if one of the two lies, successfully, to the other player or players, is that even really still the Tango? Partner dancing involves trust in your partner - that you're not going to dip them and then drop them to the floor when the opportunity to make a bit of cash arises, to abuse the metaphor.
- deleted 4y ago[deleted]