A senior U.S. Securities and Exchange Commission official on Thursday urged private equity firms to follow Blackstone Group LP's decision to stop a controversial fee practice in its portfolio companies. The practice involves the so-called acceleration of monitoring fees, when a private equity firm receives money from its portfolio companies for consulting work it has not performed because it has divested them and no longer runs them.Many private equity fund investors are asking fund managers to stop the practice, arguing they already pay hefty management and performance fees."Blackstone stopping monitoring fee accelerations, they are a bellwether in the industry, the industry follows them," Igor Rozenblit, co-head of the SEC's private funds unit, told a Merrill DataSite conference panel on private equity regulation in New York."(Industrywide) that's billions of dollars back to investors that would have gone to fund managers," he added.
The Blackstone Group L.P. (Blackstone) is a manager of private capital and provider of financial advisory services. Shares of BX traded higher by 0.16% or $0.05/share to $30.43. In the past year, the shares have traded as low as $25.60 and as high as $36.08. On average, 4815710 shares of BX exchange hands on a given day and today's volume is recorded at 1530552.
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