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Johnny on the spot

Johnny on the spot 2005-08-01 Staff Writer Some issues related to running a private equity firm are perennial ? we cover these. Other issues are of-the-moment ? we cover these as well, especially in this, the August edition of <italic>Private Equity Manager.</italic><br /><br />Many o

Some issues related to running a private equity firm are perennial ? we cover these. Other issues are of-the-moment ? we cover these as well, especially in this, the August edition of Private Equity Manager.

Many of the articles you'll find in this month's issue present analyses of recent changes to the world in which private equity operates. Beginning on p. 18, for example, is a detailed look at the shifting sands of offshore investment rules in China. With the possible exception of India, no region of the world has drawn as much interest from investors, but China is also a moving target with regard to optimal investment structures, and recent trouble in South Korea shows the political side-effects that smart tax structures can produce.

As any investment advisor or placementagent will tell you, private equity real estate funds are hot. Often called opportunity funds, these vehicles reside at the top of a sort of real estate investment caste system that separates the Brahmans from the rest of the lot in the form of fees. Real estate funds that attach the words ?private equity? to them charge higher fees, ostensibly because the work they do is harder. Core funds, seen more as property managers, can't charge as much. As you might imagine, some underqualified property investors have been attempting to gussy up their track records and raise opportunity funds. Read about it on p. 24.

We felt it highly appropriate to include a detailed analysis of the new Texas rules on private fund disclosure, as this may become a bellwether for FOIA battle resolutions in other regions, including in the UK. We certainly haven't heard the last of this issue. The Texas rule calls for public LPs to disclose ?compensation? earned by the GP ? not a subject that the typical GP cares to have written about by the Dallas Morning News.

Back to the ?perennial? category, there will always be a press (sorry). But in our experience, some GPs have seemed less than eager to learn how to deal with us effectively. While I'm loath to reveal the secret workings of the media cabal, on p. 26 guest commentator Bill Haynes gives top tips for dealing with reporters. He says good food goes a long way, but I'll neither confirm nor deny this.

Enjoy the issue,

By David SnowDavid. s@us. investoraccess. com