True confessions

September 22, 2009

Journalists are suckers for a confessional story.

There’s belief among journalists that confessional stories carry more resonance with readers because they often are narrative tales about insiders fessing-up to the truth.

And so today we have Andrew Ross Sorkin in The New York Times telling us the great confession of British private equity chieftain Guy Hands. What’s Hands’s great admission? That private equity firms charge excessive fees to investors and that highly-leveraged takeover artists aren’t always the great managers they purport to be.

Shocking, right? Critics of private equity have been saying those same things for years.

So why does it matter that Hands wants to spill his guts to Sorkin over tea at the Jumeriah Essex House, a fancy hotel overlooking New York’s Central Park? To be blunt, it doesn’t.

This true confession might seem a bit more sincere if Hands also announced he was rebating to investors some of the management fees his firm had collected over the years. Or, better yet, he helped find work for some of the people who lost jobs at the now debt-laden companies his firm has acquired.

Oh, and one more thing Hands: what about moving out of the island of Guernsey so you can start paying your fair share of taxes to the British government.

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