Former Merrill Lynch broker Kurt Stein vividly remembers the day in the spring of 2011 when the doors to the exclusive world of private equity seemed to swing wide open. Inside an ornate ballroom at Manhattan’s Waldorf Astoria hotel, Stein and hundreds of his Merrill colleagues were wined and dined by Blackstone, the world’s preeminent buyout firm. The pitch: Blackstone’s vaunted deal machine was invincible, producing net returns north of 15% per year with an uncanny ability to avoid losses.
Here’s how Blackstone’s billionaire cofounder and CEO, Steven Schwarzman, explained his proposition to brokers in 2013: “We are a pair of safe hands. . . . Why would you invest in the products you normally do if you can make two to three times your money and have happier customers if you put them into our products?”
Now Stein, who has since resigned from Merrill and submitted documents to the SEC as a whistleblower, wishes those doors had remained firmly closed. Fast-forward ten years, and most of the clients Stein placed into private equity funds are sitting with annual returns of 10% or less, well below the 15% annually the S&P 500 has returned. Stein now believes these funds were misrepresented by wealth management firms and their private equity partners. (The SEC declined to comment.)
Denne historien er fra October 2021-utgaven av Forbes Indonesia.
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Denne historien er fra October 2021-utgaven av Forbes Indonesia.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
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BACK ON TRACK
Collective wealth gets a 21% boost to a record $162 billion amid an economic uptick.
Championing Locals
The wave of social commerce is enabling inclusive digital economies beyond urban areas.
Boys in the Bubble
Startups are supposed to specialize, but OPENSEA’s founders thrived by building a wide-open market for creating and trading all manner of NFTs, whether art, music or gaming. Now that they’re centimillionaires and poised to become billionaires, they have other worries: competitors, fraudsters and the next crypto crash.
Enduring Relations
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Sweet Success
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Marathon Man
Across America, scores of municipal pension funds remain scandalously underfunded. But not the pension fund of Tampa’s police and firemen, thanks in large part to JAY BOWEN, whose no-frills approach to stock picking has protected and served them for more than 45 years.
Gold Rallies on Inflation Fears
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The Daily Intake
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THE CROESUS OF CRYPTO
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