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Tag Archives: Private Equity

California Senate Shoots Down CalPERS’ Private Debt Secrecy Bill; Board Hissy Fit Reveals It Never Questioned Staff Misrepresentations

Is CalPERS’ influence in Sacramento finally slipping? While one robin does not make a spring, CalPERS’ arrogant and dishonest treatment of beneficiaries, the public, and as a result, California legislators, backfired in the form of a defeat on a private debt secrecy bill that CalPERS had touted as crucial to meeting its return targets. Yesterday, the California Senate Judiciary Committee shot down a CalPERS-only bill, AB 386, on a vote of 3 in favor, 4 opposed, and 4 abstentions. That level...

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Biden Administration Issues Interim Rule Barring Surprise Billing

CMS has released an interim rule, based on the No Surprises Act, that puts the kibosh on most so-called surprise billing. Bear in mind that this sneaky practice, greatly accelerated by private equity buying up outsourced hospital practices, like ER doctors, afflicts members of employer and individual plans. Even though the proposed rule is subject to the usual 60 day comment period, public opinion is so opposed to balance billing that none of the commentary I have seen thus far expects the...

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Australian Funds Take Aim at Private Equity by Moving to Do Deals in House

One has to wonder how CalPERS and other large US institutional investors can justify paying egregious fees and costs to private equity firms and getting lackluster net returns. One approach is to just say no and stop throwing money at private equity. Another response, which we’ve advocated, is to bring private equity in house. By cutting out the pricey middleman, investors can increase net returns. As we’ll discuss below, Australian superannuation funds are gearing up to make investments on...

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Private Inequity: NYT Examines How the Private Equity Industry Avoids Taxes

By Jerri-Lynn Scofield, who has worked as a securities lawyer and a derivatives trader. She is currently writing a book about textile artisans. The New York Times published a comprehensive piece Saturday discussing how the private equity industry avoids taxes, Private Inequity: How a Powerful Industry Conquered the Tax System. Regular readers won’t be  surprised by any of the article’s revelations about these shenanigans, particularly  over the carried interest loophole, a subject Yves has...

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Decisions Finally Coming in Long-Running Battle with Hedge Fund Titans in Kentucky Pension Case, Mayberry v. KKR

Below we are posting a pair of key filings in Mayberry v. KKR, the very long running effort by various beneficiaries of the fabulously broke Kentucky Retirement System to claw some of their abusively managed monies back from private equity titans slumming as hedgies. Next Monday, Judge Philip Shepherd will hear arguments about the effort of Kentucky attorney general Daniel Cameron to intervene in the case. That included taking up claims asserted by so-called Tier 3 plaintiffs, who are...

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California Bill Seeks to Prevent Hospital Administrators from Practicing Medicine Without a License

Yves here. Thanks in large measure to the diligent reporting of the Health Care Renewal blog, as well as more recently the deep digging by Eileen Applebaum and Rosemary Batt on private equity’s major incursions into healthcare, we’ve been able to keep tabs on the corporatization of medicine and its detrimental effects on the quality of care. These changes have been implemented by MBA beancounters over the objections of practitioners. In cities where it’s viable to keep solo or small group...

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LACERS Board Member Lambastes Lousy Private Equity Returns as More Studies Confirm Poor Performance for Decades

More and more public pension trustees are willing to say that the private equity emperors are looking awfully naked. LACERS has joined the club, with board member Sung Won Sohn sharply criticizing results considerably below LACERS’ benchmarks. Sohn’s views carry some weight, since he’s a prominent economist and former banker. But as important, more and more studies and papers are confirming what we’ve said for years: that private equity does not deliver superior returns. We’ll briefly...

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More Evidence That Private Equity Kills: Estimated >20,000 Increase in Nursing Home Deaths, 160,000 Life Years Lost Due to Cuts in Care

Private equity has succeeded in exploiting economic choke points in much narrower sectors of the economy than experts in monopolies typically study. Health care is an idea area in which to exploit the leverage of providers compared to patients. You can’t haggle over which ambulance comes to fetch you. Similarly, most who get an operation or need ongoing treatments, like dialysis or chemotherapy, will use a facility nearby, which means private equity can create local oligopolies. Not only do...

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Hoist on His Own Petard? Kentucky Attorney General’s Apparent Plan to Settle Landmark Pension Case Mayberry v. KKR Likely to be Undermined by Discovery

The Mayberry v. KKR situation has developed not necessarily to Kentucky Attorney General Daniel Cameron’s advantage. As we’ll explain in more detail, a legal move that made sense only as a political gambit now is at serious risk of backfiring on Cameron. Last July, a hard-fought case, Mayberry v. KKR, appeared dead as a result of the Kentucky Supreme Court dismissing the complaint over standing by applying rulings made in other jurisdictions after the original case has been lodged.1 Attorney...

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Criminal Tax Cheat Robert Smith of Private Equity Firm Vista Gets a Pass for Conduct Worse Than Apollo’s Leon Black, Now in Epstein Doghouse

Neil Weinberg and David Voreacos published an in-depth account at Bloomberg of how private equity baron Roger Smith escaped being indicted for criminal tax fraud despite having concealed over $200 million in income. The very short version is that Smith and his allies got to Attorney General William Barr, both through Barr’s former firm Kirkland & Ellis, where Smith’s private equity firm spends $80 million a year in legal fees, and astonishingly getting the national security apparatus, for...

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