What GPs Get Wrong About Independent Fiduciary Oversight
By Hugh L. Carey II and Donald Carey, Jr.
June 29, 2026
General partners routinely seek capital from public pensions, institutions built on a foundation of fiduciary duty, independence, and service to beneficiaries. Yet many fail to apply those same standards to their own governance. Carey Brothers & Company was built around the opposite premise: bringing independent judgment, disciplined process, and conflict-aware decision-making into the complex situations where trust matters most.
That ethos mirrors how capital is stewarded on the LP side. Public pensions require transparency, demand that conflicts be surfaced, and expect decisions to withstand scrutiny. When GPs ask for that capital, they implicitly align themselves with those principles. Too often, however, independent fiduciary oversight is treated as situational rather than foundational. That is the core mistake.
A Governance Lesson from the 1975 Fiscal Crisis
The lesson is not theoretical. It is grounded in practice and in history. During New York City's 1975 fiscal crisis, Governor Hugh L. Carey faced the imminent default of the City, fractured stakeholders, and collapsing confidence. His response was to force clarity: bringing banks, unions, and government together, surfacing the real conflicts, and imposing a disciplined process for decision-making that could withstand public and market scrutiny. That approach restored credibility at a moment when it was nearly lost, and it remains a powerful model for governance under pressure.
The Timing Gap: Designing Independence In, Not Retrofitting It
One of the clearest gaps is timing. Public plans and leaders operating under true fiduciary duty embed discipline before decisions are made, not after problems emerge. Yet many GPs still introduce independent oversight only once a transaction has become conflicted, such as GP-led secondaries, restructurings, or liquidity events where positions have already hardened. That reactive posture weakens trust. Independence is not something to retrofit into a deal. It is something to design into governance from the outset, shaping how opportunities are framed, how information is shared, and how fairness is evaluated.
The Cultural Gap: The Fiduciary Mindset GPs Should Adopt
There is also a cultural gap. Public pension professionals, the people responsible for deploying capital, operate with an ingrained sense of responsibility to beneficiaries. They measure success not only in returns, but in the integrity of the process behind those returns. GPs can learn from that mindset.
It reflects the values that guide Hugh L. Carey II and Donald Carey Jr. in their leadership of the firm, and the Three Cs that define how Carey Brothers & Company works: the Courage to confront difficult issues directly, the commitment to Collaborate across stakeholders, and the Care to prioritize people and outcomes over expediency. Independent fiduciary oversight, at its best, embodies those same values.
What This Means for GPs Seeking Institutional Capital
Ultimately, if GPs expect to be trusted with public pension capital, they must reflect the standards that capital represents. Governor Carey's leadership during crisis demonstrated that independence, transparency, and accountability are practical tools for restoring and sustaining trust. Carey Brothers & Company extends that playbook into modern capital markets. Done right, independent fiduciary oversight is not a constraint. It is a signal of care, discipline, and alignment with the investors GPs ask to back them.
About Carey Brothers & Company
Carey Brothers & Company advises general partners, institutional investors, and corporate leaders on transaction advisory, independent fiduciary services, governance, restructuring, and performance improvement.