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<\/a><\/p>\nI’m buying some bond funds today, including ENX, BNY and PNF (which I already own). They’re all paying a 6.5% triple tax-free dividend.<\/p>\n
Here’s a reason to hate Citigroup. <\/strong>Their arrogance is unbelievable. The disdain for their clients is even more unreal.<\/span><\/span><\/p>\n In olden days, when I had more money, I was naive. (Some would say stupid.) I truly believed that places like Citigroup and Goldman Sachs could invest my money and make me rich beyond my wildest dreams. They had these things called “funds.” They take my money, combine it with other fools’ money, buy companies, manage them well and sell them in a few years for far more than they had paid. Bingo, instant riches. <\/span><\/span><\/p>\n Of course, it was all bullshit. It worked in the very\u00a0 early days but by the time I got in, the bloom was off the rose.<\/span><\/span><\/p>\n Fast forward today.\u00a0 I’m in the toilet with all my investments with Citigroup and Goldman, but I’m wiser. I figured the real reason for these funds is to make them — not me — rich. It’s called fees. they get lots of them, irrespective of how well I do. I do bad. They do good. This realization — which everyone reading this column will say is bleeding obvious — came to me initially when Goldman recently made a large\u00a0 capital call — the sole purpose of which was to pay itself fees, not to buy companies for me.<\/span><\/span><\/p>\n The second realization happened yesterday. FedEx brought me an “Important Notice” from Citigroup Alternative Investments LLC. It seems that Citigroup “is transferring management of my fund to something called StepStone Co-Investment Funds and “under certain circumstances” to affiliates of Lexington Partners Advisors L.P. The reason for this?<\/span><\/span><\/p>\n This transaction is consistent with Citigroup’s strategy of reducing its portfolio of non-core operating businesses and assets held within Citi Holdings in an economically rational manner while working to generate long-term profitability and growth from the core businesses within Citigroup.”<\/span><\/span><\/p>\n In other words, Harry’s investment can go hang. Does this piss me off? Yes, for several reasons:<\/span><\/span><\/p>\n First, it’s not the first time Citigroup has shown utter disdain for clients. I remember very clearly that the reason I invested in this fund originally was because of a brilliant fellow called John Barber, who was managing my fund.\u00a0 Well he left shortly\u00a0 after I invested. So much for that sales pitch and all those conversations with Mr. Barber. Second, the package of material I received yesterday asks for my approval of this transfer. I’m meant to fax them my signed Consent. If I don’t? Well, they don’t lay out any benefits to me. But they do lay out this incredible threat:<\/p>\n If the Transaction is not consummated, then employees of Citi working with the CPE businesses may become more likely to terminate their employment with Citi and accordingly, the ability of Citi to continue to manage the Fund effectively may be substantially impaired.<\/p>\n In other words, if I don’t consent, they’re going to fire all the people managing my fund. and deliberately fuck me.<\/p>\n Third, let’s say I want to ask a question on this, like “What’s in this for Harry?<\/em>” The documents I received yesterday came without<\/strong> a cover letter. The ONLY<\/strong> name in the entire documents is Gitanjali Workman, who works the fax machine (for my Consent) at the law firm of Paul, Weiss, Rifkind, Wharton and Garrison LLP.<\/p>\n Fourth, there may be no benefits for Harry — at least none I can find in the docs. But there are plenty of risks spelled out. My favorites:<\/p>\n + No assurances can be given that StepStone and\/or Lexington will perform their duties in respect of the Fund successfully.<\/p>\n + StepStone manages assets for numerous clients. As a result StepStone may at times face a conflict of interest in making investment decisions on behalf of the Fund.<\/p>\n Note to my readers:\u00a0 There’s a lesson here. Don’t ever think about investing in a private equity, leveraged buyout, fund of funds, or like ilk fund managed by a Wall Street house. I have not made a nickel on any fund managed by any Wall Street house. But they have. Lots of nickels.<\/p>\n A final note: Most of my funds are still running. If a miracle happens, I may get my money back. And if a BIG miracle happens I may make a few nickels. Yup, and pigs will fly.<\/p>\n Survival Skills by David Mamet. <\/strong>These came from August Men’s Journal<\/em> magazine. <\/span> David, What’s the best advice you’ve ever received? What should every man know about money? What advice would you give the younger you? What’s your biggest regret? Finally a useful product.From China:<\/span><\/strong><\/p>\n
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\nWhen I was a kid in Chicago, I knew this woman named Frannie who’d take photos of people at Wrigley Field for $10 and get their addressess to mail the photos, but there wasn’t even any film in her camera. Anyway, I’d just had my heart broken by some girl, and Frannie told me, “It’s all in a lifetime.” She meant that things happen, but you get over it. I’ve always treasured that advice.<\/em><\/p>\n
\nAs the old Yiddish proverb had it, “Rich or poor, rich is better<\/strong>.”<\/em><\/p>\n
\nAnother Chicago writer, Nelson Algren, said to never play cars with a man called Doc, nevr eat at a place called Mom’s, and never sleep with a woman whose troubles are worse than your own. I would add one to that list: Never trust a Jew in a bow tie.<\/em><\/p>\n
\nNot serving in the Vietnam War. It was the 60s. I thought I shouldn’t go and wasn’t smart enough to realize that it was too easy an excuse because a lot of people were going in my place. It’s a young man’s responsibility to defend his country.<\/em><\/p>\n