Some investment firms, like PIMCO, have taken it upon themselves to provide their services free of charges in managing bailout funds, provided others do the same.
Some will volunteer:
Babson Capital CEO Joins in Call for Investment Managers to Eliminate Fees to Aid U.S. Bailout of Troubled Mortgage Assets
Springfield -- 09/24/2008 -- Roger W. Crandall, Chairman and CEO of Babson Capital Management LLC, one of the nation’s leading fixed income managers, today stated that the firm supports a no-management-fee arrangement to help assist the proposed $700 billion federal Troubled Asset Relief Program currently being considered by Congress.
More to follow below the jump....
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"We support the call made today for investment managers to provide their expertise for no fee to support this most critical event for our country," said Mr. Crandall. "The relief plan proposed by Treasury Secretary Paulson is an excellent opportunity to address the problems being created by these troubled mortgages and other assets. Babson Capital is committed to providing our expertise in these matters for no fee, provided other managers do the same, to help stabilize financial markets and prevent further economic problems."
Mr. Crandall’s response was to comments made this afternoon on the CNBC network by Bill Gross, PIMCO’s Chief Investment Officer and founder, indicating his firm would offer its services at no charge, as long as other firms did the same.
That's a press release from Babson. Encouraging, but it's just talk unless there's pressure from the top to join along.
This is a good opportunity for Obama, or Frank, or Dodd, or anyone to employ some leadership as they embark on Round 2 of the rescue plan. The message is simple: The bailout cannot be a get-rich-quick scheme for these insider type companies.
Some additional background: this was an editor's note that was attached to the press release:
The following press release was issued by Babson Capital Management LLC on Wednesday. Asset managers, like Babson Capital, are routinely paid a management fee for their services. This fee is typically calculated as a percentage of assets under management. In the press release, Babson Capital is proposing that they and other asset managers, should they get access to any of the assets that may end up under the proposed $700 billion bailout umbrella, consider doing this work for no management fee.
At 2%, that means that $14 billion could simply evaporate as "management fees." That just can't happen.