McKinsey Says Internal Fund Independent, Responding to FT Reportby and
‘There is no conflict of interest,” company spokesman says
Investment office operates on ‘blind trust basis’ from firm
McKinsey & Co.’s internal investment arm, which had a net asset value of $9.5 billion at year-end, is managed independently and separately from the company’s consulting operations, the company said, responding to a Financial Times report that suggests the business poses potential conflicts of interest.
“MIO manages the pensions of current and former McKinsey employees and assets of partners and former partners,” a company spokesman said in a statement Monday, referring to the McKinsey investment office. “There is no conflict of interest. MIO operates on a ‘blind trust’ basis, with MIO’s investment managers being unaware of the firm’s clients and consultants being unaware of MIO’s underlying investments.”
A subsidiary of McKinsey, MIO Partners was established in 1992 to manage and advise the money of current and former partners and family members of eligible employees, as well as the McKinsey pension plan, according to a Feb. 23 regulatory filing. The company manages $9.5 billion in net asset value as of Dec. 31, the filing said. The board includes 12 directors, all of whom are or were senior partners, advisers or directors at McKinsey, according to the filing.
The FT reported that there may be potential conflicts if former partners continue to have ties to an internal investment fund. The publication also said McKinsey’s public disclosures show that the MIO isn’t limited from investing in securities tied to McKinsey clients.