US-based management consulting firm McKinsey is reportedly exploring the possibility of divesting its in-house asset manager, MIO Partners.
MIO, which is responsible for the investment of private wealth for McKinsey’s senior staff and alumni, is currently undergoing a strategic review with the assistance of Ardea Partners, an investment bank established by ex-Goldman Sachs executives, reported Financial Times.
The review of MIO Partners, which manages assets worth $23bn, comes after a series of controversies, including a fine by the US Securities and Exchange Commission (SEC) in 2021.
The SEC’s $18m fine addressed concerns over inadequate internal controls and the “potential” for conflicts of interest, as partners involved with MIO’s investment decisions had access to sensitive client information.
McKinsey has since reformed MIO’s governance, ensuring a clear separation between its consulting services and investment operations.
Its strategic review aims to align MIO’s relationship with the firm’s long-term interests and those of MIO’s clients.
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The review will assess various strategic directions and alternative ownership structures, with a focus on maintaining the continuity of MIO’s management, investment, and advisory teams.
In recent years, governance rules aimed at preventing potential conflicts of interest have led MIO to refrain from investing in the individual stocks or bonds of any public or private company. It instead engages in macro trading strategies.
These include trading in asset classes such as sovereign debt, commodities, foreign exchange, equity indices, and credit indices.
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