News & Research Archive

Archive Year
February 2018

US Tax Reform - Provisions Impacting Private Equity

Patricia W. McDonald - Baker McKenzie

The Conference Agreement reduces the corporate income tax rate to 21% and repeals the corporate alternative minimum tax. Additionally, the withholding provisions under the Foreign Investment in Real Property Tax Act of 1980, or FIRPTA, are modified to reflect the reduced 21% corporate income tax rate for (i) gains from the disposition of United States real property interests (“USRPIs”) realized by U.S. partnerships, U.S. trusts or U.S. estates that are allocable to non-U.S. persons who are partners or beneficiaries of such U.S. partnerships, U.S. trusts or U.S. estates, or are allocable to a portion of a trust treated as owned by a non-U.S. person; (ii) distributions by non-U.S. corporations to non-U.S. persons of gain from the disposition of USRPIs; and (iii) distributions by regulated investment companies or real estate investment trusts to non-U.S. persons of gain from the disposition of USRPIs. If enacted, the foregoing is effective for taxable years beginning after December 31, 2017. Potential private equity impact: Portfolio companies may have lower U.S. federal income tax liability, which in turn could decrease the value of their tax attributes and impact their cash flow projections. Such considerations should be factored into any acquisition planning at a portfolio company level. The use of “blocker corporations” in private equity structures may have less tax leakage as a result of the lower corporate income tax rate, which may in turn impact the assessment of the use of such blocker corporations.
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Mega buyout funds reshaping private equity industry

Max Bower - Reuters

London (Reuters) - The relationship between private equity managers and investors is changing rapidly after the number of $5 billion buyout ‘megafunds’ jumped in 2017, according to McKinsey’s annual private markets report.
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Fear Not, Stock-Sellers! Private Equity Is Here to Help

Chris Hughes - Bloomberg

Investors don't hand cash to private equity just to buy minority stakes in companies on the stock market. They can buy listed shares themselves. But CVC Capital Partners Ltd.'s interest in acquiring a 20 percent stake in Spanish utility Gas Natural SDG SA from oil group Repsol SA looks more than just idle hands trying to find something to do.
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Vietnam to get logistics upgrade with private equity backing

Nikkei Asian Review

HO CHI MINH CITY -- Global private equity firm Warburg Pincus on Monday announced it was setting up a $200 million logistics joint venture with Vietnamese real estate and infrastructure developer Becamex IDC Corp (Becamex). The joint venture -- BW Industrial Joint Stock Company -- will focus on the development of institutional-grade industrial and logistics properties across Vietnam, according to Warburg Pincus.
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Private Equity Fights Over the Most Popular Deal In Town

Chris Hughes - BloombergGadfly

The probable sale of Akzo Nobel NV's specialty chemicals unit is a test of private equity's ability to show a little restraint. The tension in the auction seems to be tightening, while the pressure on the Dutch paint-maker to sell is arguably easing. It's a recipe for someone ending up with buyer's remorse.
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Blackstone, Other Private-Equity Firms May Sit Out Trump Infrastructure Push

Miriam Gottfried and Cezary Podkul - The Wall Street Journal

Private-equity firms raised a record sum for infrastructure investment last year, aided by President Donald Trump’s promise to pump $1 trillion into America’s aging roads and bridges. That was the easy part. Spending it is another matter.
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Does Private Equity Really Beat the Stock Market?

Paul J. Davies - The Wall Street Journal

Most likely, yes, but it is really hard to measure and comes with big caveats
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BlackRock plans $10-bn fund for private equity investments


BlackRock Inc plans to raise about $10 billion as part of a new business that would take direct stakes in companies, according to a person familiar with the matter.
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Asia's Biggest Private Equity Acquirer Is Seeking $6 Billion

Bei Hu and Jonathan Browning - Bloomberg

Hillhouse Capital Management, the Chinese investment firm that last year helped lead Asia’s biggest-ever buyout deal, is targeting to raise about $6 billion in a new private equity fund, people with knowledge of the matter said.
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Investors ploughed a record amount of money into private equity last year – but that doesn't mean fundraising is a walk in the park

Lucy White - City AM

Investors ploughed a record amount of money into private equity funds in 2017, according to consultants McKinsey, at $750bn.
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