Consultants scramble for the exits
| Nov 23rd, 2006 | Filed under: Hedge Fund Industry Trends | By: Alpha Male |
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The recent brouhaha between the San Diego Employees Retirement System and consultant Callan Associates reveals a fundamental challenge facing the investment consulting industry. San Diego sued Callan in August, accusing them of improperly benefiting from supposedly arm’s-length relationships with third parties (namely various managers and a brokerage). But is this alleged breach of trust really a surprise? As a trusted consultant, Callan holds all the cards. Yet investment managers, brokers, and even educational seminar companies are raking in the dough.
They’re not the only consultants who are frustrated. The unfortunate reality is that someone set off a stink bomb in the investment consulting business and it seems that the major players are falling over themselves to get out of the room.
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