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As McKinsey Sells Advice, Its Hedge Fund May Have a Stake in the Outcome

nytimes.com

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Re: As McKinsey Sells Advice, Its Hedge Fund May Have a Stake in the Outcome

#11

Post by leroy_masochist »

staticautomatic wrote: post #3
JaakkoP wrote: post #2

As giving and receiving advice is fundamentally based on trust, it strikes me as odd why anyone wants to do business with the likes of McKinsey or Goldman Sachs who have repeatedly shown a pattern of screwing over their clients. This is not a generic "all I-banks or management consultants are evil" - there are still plenty of specialized firms out there without these anti-patterns.

In the case of Goldman it could be deal flow.

In the case of Goldman it's because they do better work than other firms on behalf of their investment banking clients and keep getting rehired, which is why they've had the world's strongest IB franchise for several decades

Re: As McKinsey Sells Advice, Its Hedge Fund May Have a Stake in the Outcome

#12

Post by phantom_oracle »

Maybe someone familiar with securities law can chime in here.

Isn't this something similar to insider trading?

They provide a service that is supposed to improve some aspect of a business, then they can internally do predictions on how successful they think their services will benefit/harm the firm and then make a bet either for or against that firm.

Re: As McKinsey Sells Advice, Its Hedge Fund May Have a Stake in the Outcome

#13

Post by oconnore »

TomMarius wrote: post #7
Bucephalus355 wrote: post #5

A few years ago I think the classic example of an embarrassing company to have on your resume was Yahoo. Now it’s McKinsey. Yahoo source: http://mobile.nytimes.com/2013/03/06/technology/yahoos-in-of...

I'm completely out of the loop. Why?

The New York Times has been running a series of hit pieces on McKinsey over the last few months.

see: https://www.nytimes.com/by/michael-forsythe#latest-panel

Re: As McKinsey Sells Advice, Its Hedge Fund May Have a Stake in the Outcome

#14

Post by bklyn11201 »

phantom_oracle wrote: post #12

Maybe someone familiar with securities law can chime in here. Isn't this something similar to insider trading? They provide a service that is supposed to improve some aspect of a business, then they can internally do predictions on how successful they think their services will benefit/harm the firm and then make a bet either for or against that firm.

Precisely, but firms claim they have setup proper firewalls to prevent these conflicts of interest. McKinsey obviously claims they had a proper firewall.

https://en.wikipedia.org/wiki/Glass%E2%80%93Steagall_legisla...

Re: As McKinsey Sells Advice, Its Hedge Fund May Have a Stake in the Outcome

#15

Post by [deleted] »

phantom_oracle wrote: post #12

Maybe someone familiar with securities law can chime in here. Isn't this something similar to insider trading? They provide a service that is supposed to improve some aspect of a business, then they can internally do predictions on how successful they think their services will benefit/harm the firm and then make a bet either for or against that firm.

[deleted]

Re: As McKinsey Sells Advice, Its Hedge Fund May Have a Stake in the Outcome

#18

Post by [deleted] »

phantom_oracle wrote: post #12

Maybe someone familiar with securities law can chime in here. Isn't this something similar to insider trading? They provide a service that is supposed to improve some aspect of a business, then they can internally do predictions on how successful they think their services will benefit/harm the firm and then make a bet either for or against that firm.

[deleted]

Re: As McKinsey Sells Advice, Its Hedge Fund May Have a Stake in the Outcome

#19

Post by [deleted] »

leroy_masochist wrote: post #8
Bucephalus355 wrote: post #5

A few years ago I think the classic example of an embarrassing company to have on your resume was Yahoo. Now it’s McKinsey. Yahoo source: http://mobile.nytimes.com/2013/03/06/technology/yahoos-in-of...

LOL, were you saying the same thing about Goldman when the Abacus story came out? Ugly news reports about what senior partners at a highly selective professional services company did != meaningful career repercussions for its alumni, most of whom were there as junior grinders rather than decision makers. I'm not a McK alum but would definitely still recommend a talented young person with a job offer there to take it.

[deleted]

Re: As McKinsey Sells Advice, Its Hedge Fund May Have a Stake in the Outcome

#20

Post by b_tterc_p »

JaakkoP wrote: post #2

As giving and receiving advice is fundamentally based on trust, it strikes me as odd why anyone wants to do business with the likes of McKinsey or Goldman Sachs who have repeatedly shown a pattern of screwing over their clients. This is not a generic "all I-banks or management consultants are evil" - there are still plenty of specialized firms out there without these anti-patterns.

Why do you think mckinsey has a pattern of screwing over its clients?
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