Funds Management Companies operate UCITS, which are sold to retail investors - e.g. mutual funds - and Alternative Investment Funds, so-called "specialized funds" (e.g. venture-, hedge- and private equity funds) - for professionals only.
Investors and share savers may choose to be self-directed; i.e. they manage their own investments.
This Page sheds light also on Private Equity Funds - vs. Self-directed Management of Shares (S-dMoS) - either by a Share Saver Account (SSA) or a Collaborative Value Network (CVN)-Approach for Impact Investing.
Today there are more managements of funds than listed companies.
What are the consequences to transaction volumes of deal flows to ethics, enterprise and risk? Do these managements contribute to an increasing GAP between the financial- and the real economy? Can participants' right of redemptions cause RUNs on Mutual Funds? Specialized funds have a contractual hold on participants for a period.
General- and critical Questions re: Management of "Other People's Money (OPM)": Who decides on use of independent opinion and risk taking? Who secures- or creates value? How? At what cost - to whom?
The Economist’s issue on October 22nd 2016 discussed how the Private-Equity Industry has prospered, while almost every other approach to financial business has stumbled
Its 4 page article sums up a. o. the competitive advantages of Private-Equity funds (abbreviated “P-E funds”) in an era of low-interest levels and structural changes - partout. The article highlights an almost stealth growth. For the low-profile P-E funds there are good reasons. The business-approach is simple: Acquire a stake big enough to change leadership, add debt, minimize cost and taxes – while charging substantial fees. A part of the income “trickles down” to limited partners in search of high yields. Therefore, they condone the extraordinary successes of the principals; namely, the General Partners (GPs) and managers of P-E funds, who apply "Other People’s Money (OPM)". Leaderships of P-E funds have become extremely powerful and rich. "Creative destruction” is their slogan. Recent research shows that although they do not live up to the characteristics of real creativity, their destruction still benefit them personally.
Cf. the writing of Louis Brandeis (1913) about historical bankers - and how they used Other People’s Money.
A very different Alternative: Self-directed Management of Shares (S-dMoS)
by a Share Saving Account (SSA) for an individual portfolio
An individual Share Savings Account (SSA) allows collection in one place of:
A SSA offers ongoing overview of savings and possible tax-free withdrawals - e.g. on an SSA-App if available.
One can withdraw everything deposited in the SSA tax-free. Within the SSA one can buy and sell shares and mutual funds without triggering tax on the gain. You only pay tax when the profit is withdrawn from the SSA.
Without a SSA** one must pay tax for the year in which one sell funds and shares with a profit.
**) S-dMoS and SSAs exist in nations with Share-Saver Movements - for example in Norway, where S.T.Evensen founded such a movement in 1979 - and wrote the book: «Economic Co-responsibility: A dividing Line in Politics». Cf. Relevant books by the undersigned on the Contact Page.
Tax Authorities can control the individual SSA by a Register of Enterprises, hereunder the Ownership of Securities.
That was proposed as early as 1977 by S.T.Evensen. It took 35 years before the arrangement was made available to individual Share-Savers – while large investors already had their special Holding Companies with tax-advantages for investment-purposes.
Comparisons of different Asset Managements are continuously carried out by Bankier.co's secretariat.
The Barbarian Establishment of Private Equity should be met by Financial Innovation with Social Impact
That can be achieved by pro-active resistance from the potential prey of P-E funds – e.g. by Small- and Mid-sized Enterprises (SMEs), hereunder family-owned firms, without “Names” in media and markets - as well as regional Basic Infrastructure Activities (BIAs). Some of them risk to be put in play by vulture funds. Together SMEs and BIAs can- and should require fair play reforms of taxation and financial markets. They can protest against malpractices of the financial industry – for example cross-selling strategies stimulated by internal bonus schemes – as well as insane compensation of corporate leadership and fund management, including so-called “carried interest” as a tax advantage.
SMEs and BIAs can assemble, spread risk and build capacities to facilitate e.g. single-role Pro-Active Restructuring and Reorganization (PARR)-services by CVNs for effective Impact Investing. They can search for access to affordable value workshops offering independent expertise – and demand role-divided financial value chains.
Illegal favoring of the financial industry's incumbents and the "Names" of financial markets may continue. Then, the GAP between the financial- and the real economy will continue to widen.
Corporate regimes of growing financial economies are harmful to themselves and everybody else
“To rock the boat” is long overdue - and the COVID-pandemics can help nudge a vital focus on the needs and behavior of the real economies - Worldwide - for example in maritime regions, where needs of owners/enterprisers and investors are similar everywhere.
The viability of any SME and/or Regional Basic Infrastructure Activities (BIA) are inter-linked. In other words – poor regional basic infrastructure is like a hole in the immune system and will cause misery. Owners/enterprisers and investors - assisted by altruistic legislators - should demand that the structure- and services of the financial industry must also benefit the real economy. And stakeholders of the financial industry should take stances - for example on the practices of the Barbarian Establishment of Private Equity - as well as on Multi-Role Financial Group’s cross-selling strategies stimulated by internal bonus schemes. Both result in collusion and network corruption.
Note: The financial economy has been- and still is embraced by politicians, who are supported by influential macro-economists. Therefore, the latter can exercise so-called “financial stability” according to their narrow criteria based on their historic data. It is no wonder that politicians and macro-economists alike are surprised by unforeseen events and resulting financial- and/or other crises – over and over again.
The Economist Magazine has shed light on the Barbarians in their caves. Now it is up to others to bring them out in daylight. Remember an old Norse Myth: A Troll will burst in daylight.
Investors and share savers may choose to be self-directed; i.e. they manage their own investments.
This Page sheds light also on Private Equity Funds - vs. Self-directed Management of Shares (S-dMoS) - either by a Share Saver Account (SSA) or a Collaborative Value Network (CVN)-Approach for Impact Investing.
Today there are more managements of funds than listed companies.
What are the consequences to transaction volumes of deal flows to ethics, enterprise and risk? Do these managements contribute to an increasing GAP between the financial- and the real economy? Can participants' right of redemptions cause RUNs on Mutual Funds? Specialized funds have a contractual hold on participants for a period.
General- and critical Questions re: Management of "Other People's Money (OPM)": Who decides on use of independent opinion and risk taking? Who secures- or creates value? How? At what cost - to whom?
The Economist’s issue on October 22nd 2016 discussed how the Private-Equity Industry has prospered, while almost every other approach to financial business has stumbled
Its 4 page article sums up a. o. the competitive advantages of Private-Equity funds (abbreviated “P-E funds”) in an era of low-interest levels and structural changes - partout. The article highlights an almost stealth growth. For the low-profile P-E funds there are good reasons. The business-approach is simple: Acquire a stake big enough to change leadership, add debt, minimize cost and taxes – while charging substantial fees. A part of the income “trickles down” to limited partners in search of high yields. Therefore, they condone the extraordinary successes of the principals; namely, the General Partners (GPs) and managers of P-E funds, who apply "Other People’s Money (OPM)". Leaderships of P-E funds have become extremely powerful and rich. "Creative destruction” is their slogan. Recent research shows that although they do not live up to the characteristics of real creativity, their destruction still benefit them personally.
Cf. the writing of Louis Brandeis (1913) about historical bankers - and how they used Other People’s Money.
A very different Alternative: Self-directed Management of Shares (S-dMoS)
by a Share Saving Account (SSA) for an individual portfolio
An individual Share Savings Account (SSA) allows collection in one place of:
- Listed shares, participations in index funds*, equity certificates;
- Mutual funds (which have a minimum of shares).
A SSA offers ongoing overview of savings and possible tax-free withdrawals - e.g. on an SSA-App if available.
One can withdraw everything deposited in the SSA tax-free. Within the SSA one can buy and sell shares and mutual funds without triggering tax on the gain. You only pay tax when the profit is withdrawn from the SSA.
Without a SSA** one must pay tax for the year in which one sell funds and shares with a profit.
**) S-dMoS and SSAs exist in nations with Share-Saver Movements - for example in Norway, where S.T.Evensen founded such a movement in 1979 - and wrote the book: «Economic Co-responsibility: A dividing Line in Politics». Cf. Relevant books by the undersigned on the Contact Page.
Tax Authorities can control the individual SSA by a Register of Enterprises, hereunder the Ownership of Securities.
That was proposed as early as 1977 by S.T.Evensen. It took 35 years before the arrangement was made available to individual Share-Savers – while large investors already had their special Holding Companies with tax-advantages for investment-purposes.
Comparisons of different Asset Managements are continuously carried out by Bankier.co's secretariat.
The Barbarian Establishment of Private Equity should be met by Financial Innovation with Social Impact
That can be achieved by pro-active resistance from the potential prey of P-E funds – e.g. by Small- and Mid-sized Enterprises (SMEs), hereunder family-owned firms, without “Names” in media and markets - as well as regional Basic Infrastructure Activities (BIAs). Some of them risk to be put in play by vulture funds. Together SMEs and BIAs can- and should require fair play reforms of taxation and financial markets. They can protest against malpractices of the financial industry – for example cross-selling strategies stimulated by internal bonus schemes – as well as insane compensation of corporate leadership and fund management, including so-called “carried interest” as a tax advantage.
SMEs and BIAs can assemble, spread risk and build capacities to facilitate e.g. single-role Pro-Active Restructuring and Reorganization (PARR)-services by CVNs for effective Impact Investing. They can search for access to affordable value workshops offering independent expertise – and demand role-divided financial value chains.
Illegal favoring of the financial industry's incumbents and the "Names" of financial markets may continue. Then, the GAP between the financial- and the real economy will continue to widen.
Corporate regimes of growing financial economies are harmful to themselves and everybody else
“To rock the boat” is long overdue - and the COVID-pandemics can help nudge a vital focus on the needs and behavior of the real economies - Worldwide - for example in maritime regions, where needs of owners/enterprisers and investors are similar everywhere.
The viability of any SME and/or Regional Basic Infrastructure Activities (BIA) are inter-linked. In other words – poor regional basic infrastructure is like a hole in the immune system and will cause misery. Owners/enterprisers and investors - assisted by altruistic legislators - should demand that the structure- and services of the financial industry must also benefit the real economy. And stakeholders of the financial industry should take stances - for example on the practices of the Barbarian Establishment of Private Equity - as well as on Multi-Role Financial Group’s cross-selling strategies stimulated by internal bonus schemes. Both result in collusion and network corruption.
Note: The financial economy has been- and still is embraced by politicians, who are supported by influential macro-economists. Therefore, the latter can exercise so-called “financial stability” according to their narrow criteria based on their historic data. It is no wonder that politicians and macro-economists alike are surprised by unforeseen events and resulting financial- and/or other crises – over and over again.
The Economist Magazine has shed light on the Barbarians in their caves. Now it is up to others to bring them out in daylight. Remember an old Norse Myth: A Troll will burst in daylight.