What will the CLO say?
Is his/her answer is going to be: “Well, actually folks, our firms were so great about discounting their fees last year, that we want to repay them for their investment in us during our hardest moment, and so we’re looking for our budget to be back up to what it was in 2008, plus a 5% increase for the firms for 2010! Those poor guys saw a decrease in their profit per partner last year from 1.8 million per partner to about 1.6 mil after they fired 1/3 of their support staff, de-equitized our best servicing partners, and deferred the starting date for their incoming class of 38 new associates.” If you’re the CLO who responds like that, it’s you who’ll be looking for a new way to fill your hours this coming year. Any firm watching attuned to the economic climate and to their clients this last year should have engaged in some kind of cost-cutting or efficiency exercise that did more than cut dead weight or marginalize those who actually do the work, but that fundamentally addressed ineffic
