Thoughts on new lp?
18 replies (most recent on top)
@cv What a low EQ AND low IQ take.
@ej I would keep the A shares. To me this is designed to get Jones off the hook for guaranteed 7.5%. They can distribute anything they want above the guarantee for A shares and anything they want for B shares.
@cv, I think whoever made this comment is not invested with the firm.
Let the group know if you're a tenured associate who unfortunately was ISPd or you opted to never take an LP offered to you.
There's a lot of associates who think LP are a fraud.
Would it be a good or bad idea to trade in the A shares?
GP’s are reducing their capital positions so more of us can get a piece of the pie via more frequent and larger LP offerings with a “potential” for a higher return. That’s really neat but think about this. When they reduce their capital positions to bring us into the fold they are actually selling their capital at a historic high and, the people they are selling it to, are buying it at a historic high. It’s a clever way to slowly de-leverage, take a lot of money off the table, and look like a good person all at the same time.
All the McKinsey acolytes are now at the bar (in NYC of course) high fiving each other, shot gunning bottles of Dom Perignon and toasting Ted.
@cv listen cv we are trying.
@cv I'm putting in my 2 week notice on Monday and my department is hemorrhaging employees. Plenty of us are walking out of that open door, rather than complaining.
This thread proves that most people would rather complain. Edward Jones isn't the Marines, and you are not under contract. The door is always open to leave.
I like how SS likened the payout of B shares to the same as what a former MP makes.
GPs giving up larger share of their profits out of the goodness of their hearts?? I would have bought in with the 7.5% guaranteed payout. Now, I think I'm better off investing in the S&P 500
As a potential first time offer person, I was disappointed with the news today. Time to search elsewhere.
It's obvious that the leadership of this firm does not have good intentions for its employees. They would not do anything that did not benefit them first. This will end up being a raw deal in some way or another.
@ax agree with this as the motivation behind the change 100%
@OP, I didn't care for the MP≈10 year term limit. If Chewbackee is next, won't be a pretty sight.
If you’re a company that’s dressing itself up to be sold or go public, an obligation to pay a guaranteed fixed rate of 7.5% on millions and millions of dollars with no end in sight is frowned upon by an acquiring firm or investment bank that’s advising on an IPO.
Get that off the books and the balance sheet looks much better. Variable returns, on the other hand, are, well, you know, variable.
Like Di-k Vitale says, “It’s all about the cash flow, BABY!!”
@ag liability itself is limited but it does seem like Quite The Choice to expand lp, and remove the guarunteed return. It means in lean years they don't have to pay and then those partners will have their loan time extended as well
When I was first offered LP many moons ago, my GP explained that partners took on all the risk and that “Limited Partnership” had a guaranteed payout and no risk. We could share in the profits of the firm without risking our initial investment. We had a guaranteed return on our investment.
The new structure seems like they are making all limited partners liable for any future downturns in the business. The variable structure seems to indicate our liability is no longer “limited”. Therefore, it should no longer be called “LP”.
Please correct me if you heard differently.
Yeah any time something with a guaranteed return gets grandfathered in / phased out it seems like a bad sign.