Saturday, February 28, 2015

Private Equity’s Private Math

To the casual observer, the investment returns recently announced by the California pension system might seem like cause for celebration. The state’s investments in firms that buy private companies generated a 20 percent return in 2014.

California’s $30 billion worth of private equity investments did not come cheap, incurring almost $440 million worth of annual management fees paid to financial firms. But the double-digit gains helped the system generate some of the best overall pension returns in the nation — positive news for taxpayers and for state workers who rely on the system in retirement.

Across the United States, similarly robust returns have proven key elements in the Wall Street sales pitch that has persuaded state and city pension overseers to entrust vast sums of money to private equity managers.…

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Union Leaders Vow To Fight Walker On Right To Work In Wisconsin

By John McCormick and Mark Niquette, Bloomberg News (TNS)

CHICAGO — More than a dozen Wisconsin labor leaders said anti-union legislation supported by Governor Scott Walker is being rushed through the legislature to discourage discussion.

“If right to work was any good for this state, we wouldn’t see it being tried to pass this quickly, with limited debate in an attempt to circumvent democracy,” Phil Neuenfeldt, president of the Wisconsin AFL-CIO, said Monday during a news conference in Madison, the state capital.

Republican leaders said Friday that they planned to call up the bill this week and union and other groups plan protests in Madison for Tuesday and Wednesday.…

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What’s At Stake In The Latest Greek Bailout Crisis?

By Carol J. Williams, Los Angeles Times (TNS)

As Greece’s new leftist leaders engage in an economic battle of chicken with their European creditors, the outcome of crisis talks portends dramatic consequences for the perennially indebted Mediterranean country as well as for its European lenders and global economic stability.

Here is what is at stake in the decision on whether to extend Greece’s bailout terms:

Greek Credibility As A Borrower

Athens was forced to seek loans from its European Union allies after its economy imploded in 2009 because it could no longer borrow on international markets. Should the country default on its obligations to European lending institutions or abandon the austerity measures imposed in exchange for those loans, the country would lose credibility as a borrower.…

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