New York City Comptroller/mayoral candidate William Thompson was on CNBC earlier today, and discussed the placement agent ban. Here’s the key quote:
“In some cases, [placement agents] are doing everything from the doing the PPM to almost the presentations to helping market around the country. Because a lot of these private equity funds, particularly the smaller ones and the mid-sized ones don’t have marketing sides, don’t know how to reach out. So in some instances, you could say it helps. We’re just going to beef up our staffs and work alone with our outside consultant to try to create better access.”
In other words, they’re useful but we’re banning them because of a few rotten apples. As I’ve said before: If you want greater transparency, just provide a detailed timeline of how a fund was first introduced to the pension system, and where the due diligence went from there. And, remember, a corrupt placement agent is only one half of a transaction; he still needs someone on the inside to accept the bribe…
Video below (placement agent talk about halfway through)
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