throwaway999775

Non-partner employee here. Same poster as elsewhere on a different throwaway.

The benefits are very strong. I had not heard of this issue previously, and don’t especially care. I’m not clear on if you mean the performance is too high or too low because the article kind of implied both. I don’t think the amount was particularly material nor do I think it’s especially bad if the firm gives preferential treatment to partners because... it’s a privately owned firm... by the partners... and in general it treats its employees very well.

I’m not sure I’m communicating this well because the underlying facts feel vague. But I would give my employer an A+ based on my experience so far. The possibility that a percentage point of returns was lost on my 401k is bottom of the barrel priority. I can’t tell from the article what happened, but it would be really hard to outweigh the visible, conscious investment in its people that the firm does.

I recognize this sounds like I’m drinking the Kool Aid here, but frankly, very few companies invest much into their employees. The best case scenario is often lame office perks for tech workers. But tech workers get shitty non competes. McKinsey, for example, gives you weeks of fully compensated time off to find your next job elsewhere. I think it’s a remarkably healthy culture.

(Same account, lost original login)

This quote is misleading. It implies that McKinsey consulting partners are the ones making the investment strategies which is false. The large investment unit is run by... surprise surprise... finance professionals. Furthermore 90% of the MIO’s investments are in externally managed funds, the investment decisions of which the MIO does not control.

Spinning off the MIO as a for profit firm would frankly be misaligned with the firm values. It’s also not especially opaque, as it’s fully registered and files documents on its structure and what not. Journalists have simultaneously been using those filings and claiming the structure is opaque.

Again. It’s possible that McKinsey partners engage in insider trading (although it is very difficult as all trades in the firm are required to be approved by compliance). But I really don’t think there’s a logical thread by which partners take enormous risks to circumvent internal controls and provide tips to the MIO just to boost the fund performance. That’s a very high risk, low payoff idea, because even if your secret info is super profitable, it’s diluted across thousands of other partners before benefiting you personally. Claiming that it happens on a massive scale to offset that is just silly and is frankly a huge accusation with no basis. It’s fully possible that the fund was just well managed.