Monte Tarbox, chief investment officer of New York City’s $326bn Retirement Systems, criticized private equity firms for a "steady creep" in fund expenses, including attempts to charge jet travel costs to ordinary investor fees. At the FT Future of Asset Management North America conference, Tarbox revealed an unnamed PE firm sought to underwrite employee private jet trips, a practice he finds undermining trust in general partners' commitment to investor interests.
Tarbox, who manages assets for city teachers, police and firefighters, linked worsening terms to the influx of retail money into private equity, which he says is displacing institutional investors as key partners. He warned that retail funds face a "liability mismatch" due to long-term commitments versus shorter investor redemption windows, predicting "a crisis to come in the not too distant future."
The industry, led by firms like Blackstone and KKR, targets wealthy individuals for growth, offering access previously reserved for institutions. Partners Group recently faced redemptions and restructured underperforming PE holdings after limiting investor exits.
Source: Financial Times Companies · Summarized by HeadlinesBriefing