Bad P.E. Managers Harder To Shake Than Patricia Cohen

Breaking up is even harder to do when fees are involved.
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Litigating since he looked like this.

Has your G.P. (allegedly) stolen $17 million from you and your fellow investors? Good luck proving it, since he or she probably won’t want to talk about it. And better luck getting rid of him or her if they don’t.

The key investors behind the divorce ran into a host of challenges. For one, the firm’s namesake founder, G. Steven Burrill, allegedly declined to be interviewed as part of an investigation that the investors launched into the fund, according to a legal complaint….

Limited partners often can also only terminate managers if there are “legitimate” grounds for removal. That could require investors to prove wrongdoing by a manager–a hairy task if the information has to be extracted from a recalcitrant general partner.

On the bright side, the investors in the Burrill Life Sciences Capital Fund III won. On the less bright side, like certain people who haven’t been married for 25 years, they’re still in court.

The fund is now suing its former general partner and Mr. Burrill over alleged fraud, claiming more than $17 million was embezzled from the fund between 2007 and 2013….

Parties including Mr. Burrill have said they “deny each and every claim” made in a separate pending lawsuit, filed last year by a former Burrill & Co. insider, that included similar allegations of misuse of the fund’s capital.

Breaking Up With A Private Equity Manager Is the Hardest Thing Ever [WSJ Private Equity Beat blog]


UK Hedge Fund Manager's Chickens To Maintain The Lifestyle They've Grown Accustomed To In 2013

What motivates a hedge fund manager to continue busting his ass to churn out profits year after year, once he's already amassed a fortune most people can't even fathom, when he could easily pack it all in and live more than comfortably without ever working another day? For some, it's the thrill. For others, it's the trophy's wife's shoe habit. For Crispin Odey, it's the chickens. The Odey Asset Management founder (and sausage brand ambassador)'s got a mess of high-maintenance ones and earlier this year, had architects draft blueprints of a "Palladian-style" mansion he intended to build them (seen at left), replete with a grey zinc roof, "pediments, cornice, architrave, and frieze in English oak," and columns "hewn from the finest grey Forest of Dean standstone." After finishing 2011 down 20.3%, things were no doubt more than a little tense over in Herefordshire, where questions of whether or not construction would have to be halted, or if they'd have to make the switch to [whispers] generic-brand feed. Certainly a moment of panic swept over Odey each day when he returned home, wondering as he turned the knob if he'd be entering an empty house, the chickens gone and a note explaining they couldn't do this anymore on the fridge. Ran off with the general contractor because what was the point of shacking up with a money manger if the money wasn't there? Luckily for all parties involved, it won't have to come to that; according to Bloomberg Markets' annual ranking of the top performing hedge funds, performing under pressure is one of Odey's specialities.