If only we had some mechanism whereby companies' shares could be listed somewhere public, and people could buy and sell them to determine what a fair price for these companies would be! Oh, better yet - we could have a regulatory body that could prevent companies from selling the same asset back and forth to themselves to inflate the price. Crazy, right?
PE LPs are all accredited and know what they're doing, they're betting on a greater fool buying for a higher multiple later bc it worked for the past years, multiples kept rising. Blame the fed, blame congress, blame stupid people who somehow got money. Now people complain bc there's a downturn. I don't know how people are unironically painting them as victims.
If you’ve reached the size of being a public company, lawsuits are a Tuesday. If the flavor of the frivolous is driving executives and investors decision making, then it’s a cultural choice.
> Oh come on, a lot of good companies stay private bc the SEC makes it a pain in the ass (and expensive) to be public. And it's making it worse with stupid shit like ESG reporting or SOX compliance they just keep adding.
It does make it a pain but it also increases the trust investment has in your company to not do things like trade assets between two vehicles you control with no proof that it’s not to your benefit
Generally agree that these aren’t victims though. To borrow a term from Eve, it seems like they decide to venture into null sec space and are surprised they could get hurt
Also these deals arent suffering from a "lack of transparency". The LPs know exactly what they're doing, they're literally marketed as continuation funds. You really can't complain about high net worth individuals or institutional investors getting "taken advantage of" like you can with some random guy investing his 401k in the public markets. Smh.
In particular, rules that require code reviews, auditing around production deployments, regular patching and exercising backup/recovery mechanisms have all made the systems Ive worked on operationally resilient.
It does depend on what kind of expertise your compliance team has (or the 3rd party tool you might use). But followed in spirit, SOX regulations have probably been a net benefit.
https://www.logicgate.com/blog/a-comparison-of-soc-and-sox-c...
Lol. Who’s accrediting them? 9/10 can’t make a 3-statement that foots.
You need to be an accredited investor to invest, as an individual, in hedge funds, private equity, and some other similar things.
Kim Kardashian is an accredited investor.
Kim Kardashian is an accredited investor
The size of these markets are different, their demands on returns and time horizons are different. This provides a much better variety of capital choices for companies searching for capital. If only the public equity market existed, the capital market would be very inefficient. This is microeconomics 101, increase choice/variety to most efficiently meet demand without creating deadweight loss.
Ultimately, the kind of wash sale you're talking about only applies when sophisticated accredited investors pump the price and dump to unaccredited unsophisticated investors. Institutional investors must know better, or (to the benefit of other institutions), they don't remain fit enough to be an accredited institutional investor for very long.
Regulators lie downstream from, and are often directly captured by this sort of jockeying for power between large institutional investors and their turf wars (SEC/CFTC -> private sector financial services/banking pipeline). So regulation isn't always an effective answer for these kinds of incentive problems.
Being private can make the companies much more nimble -- especially if they actually have rigor & profits rather than requiring perpetual shareholder subsidization of "growth."
TLDR: Being public (even absent Sarbanes Oxley) isn't a panacea.