Tuesday, 3 July 2007

NAPF defends private equity tax treatment

There's a particularly craven letter from the NAPF in today's FT about the taxation of private equity partners. Read it here.

The broad messages are:

"what do we care about the growing wealth gap".

A successful private equity manager takes home amounts that are often 10 and sometimes 100 times what a middle-ranking executive earns in a public company, let alone the cleaner. Such sums are an easy target for the envious (and that means most of us, at least some of the time), but irrelevant to institutional investors.

"we have no choice but to hand over your money to these brilliant people"

in a world awash with financial capital, those of us with nothing else to trade must pay up for access to the intellectual capital of the best groups.

and "did we mention how weak at the knees we go in the face of these amazing business giants"

our chief regret is that we find it difficult to keep enough money invested. General partners' habit of giving our money back to us, before we have another use for it, is inconvenient for us, but evidence of their sharp focus. We need them on our team.

Pass the sick bag.

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