Jennifer Harris

Will more capital calls mean more LP defaults this year?

The House of Representatives will vote on Tuesday on a second bill that would change tax rates on carried interest – one that is somewhat less draconian, but also permanent.

The Council of Ministers and the ECON Committee have approved versions of the directive, but crucial differences remain in regards to the ‘third country’ rules. The latter group's version also includes a clause that could block LBOs.

Another week, another crucial AIFM Directive vote delayed. Adding to GPs’ anxiety is the fact that the longer the process drags on, the more unfavourable amendments seem to be added to the bill, such as one apparently banning ‘asset-stripping’

Former US Treasury Secretary Henry Paulson said at a conference last week that he does not support the Volcker rule, nor does he believe it would have saved any failed banks during the financial crisis.

The EU Parliament’s Economic and Monetary Affairs Committee was scheduled to vote on a final version of the controversial AIFM Directive, but the vote was delayed one week for procedural reasons.

The Private Equity Council’s president, Doug Lowenstein, said at a conference Wednesday a tax hike on carried interest is likely to pass – and it’s just one of several tax measures that will hit GPs in the wallet.

An SEC investigation into the use of side pockets at hedge funds is a reminder that fair value is serious business and that private equity GPs must take pains to follow consistent valuation policies.

A crucial vote on EU transparency requirements was delayed by a volcano this week, but regulatory overhaul in the US marches on apace.

Mohammad Almojel was previously an associate director at MerchantBridge Private Equity, and sits on the board of the Saudi-British Business Council.