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Pure insights: Tax, Private Equity and Asset Management review

There has been a considerable amount of recruitment activity across tax in the private equity and asset management sectors during the last 12 months, and there are a number of interesting reasons for this.

Firstly, the attitude of the market to tax and tax transparency has not only affected financial institutions, such as large investment banks and other multinational organisations; but private equity and asset management houses have also had to become more aware of the impacts of tax how they pay it and where taking into account their reputational risk and impact. This is apparent from both an investor and investee perspective. All parties will be conscious of managing their reputational risk to avoid becoming another name in the press.

Tax legislation as we all know, is ever changing and in accordance with that, the asset management and private equity communities have had no option but to take note of these changes.

For instance, UK anti-hybrid rules have created a number of tax issues and private equity groups have to consider how to apply these dependent on their structure, how they are funded and the international tax profile of the investors in the fund.

Similarly, the ongoing OECD BEPS project has influenced fund structures for
portfolio companies. Investors will expect private equity houses to have a view on how it is reacting to this and how it is going to handle the challenge of BEPS.

Increasing focus on permanent establishment rules, US tax reform, VAT, making tax digital, and corporate criminal offence, are all further reasons
why tax is increasingly under the spotlight in the private equity and asset
management industries.

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