Publications
Schulte partner Dan Roman authors Tax Notes article, “Will a Labour Government Undermine the Qualifying Asset-Holding Company?”
September 2024
Schulte Roth & Zabel partner Dan Roman’s article discussed the introduction of the UK's Qualifying Asset-Holding Company (QAHC) regime in April 2022, aimed at making the UK more competitive in asset management and investment fund structures. The regime allows UK tax-resident companies to act as tax-efficient intermediate holding companies, without subjecting investors to additional tax beyond what they would pay if directly investing in the underlying assets.
However, there has been hesitancy in adopting QAHCs due to concerns that a Labour government might repeal the regime. Dan argued that these fears are unfounded, as Labour’s focus on economic growth makes repeal unlikely. Even if the regime were repealed, the impact on existing structures would be minimal, particularly for private equity funds, which could continue operating similarly under standard UK tax rules. Private credit funds might face more challenges but could also adjust with minimal disruption.
Dan concluded that the QAHC regime is seen as a competitive and tax-efficient solution for private capital fund structures, with limited risk of repeal or significant downside under a Labour government.
Read more here. (subscription required).
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Alerts
On Aug. 19, 2024, the US Securities and Exchange Commission (the “SEC”) charged Obra Capital Management, LLC (“Obra Capital”) with violations of Rule 206(4)-5 under the Investment Advisers Act of 1940, otherwise known as the “Pay-to-Play Rule” (the “Rule”), arising out of a $7,150 campaign contribution made by an individual prior to joining Obra Capital.[1] This campaign contribution was made to a government official in Michigan who had influence over hiring investment advisers for the Michigan Public Employees’ Retirement Fund (the “Michigan Pension Fund”), which was an investor in a fund managed by Obra Capital (the “Obra Fund”). Notably, the Michigan Pension Fund had been an investor in the Obra Fund for several years prior to the hiring of the individual who made the contribution. And perhaps even more notably, this campaign contribution was made several months prior to the individual becoming a “Covered Associate” (as defined by the Rule[2]) of Obra Capital. By virtue of Obra Capital continuing to provide investment advisory services for compensation to the Obra Fund in which the Michigan Pension Fund was invested after hiring the individual, Obra Capital violated the Rule and agreed to pay a $95,000 fine to settle the charges.
Alerts
On Aug. 19, 2024, the US Securities and Exchange Commission (the “SEC”) charged Obra Capital Management, LLC (“Obra Capital”) with violations of Rule 206(4)-5 under the Investment Advisers Act of 1940, otherwise known as the “Pay-to-Play Rule” (the “Rule”), arising out of a $7,150 campaign contribution made by an individual prior to joining Obra Capital.[1] This campaign contribution was made to a government official in Michigan who had influence over hiring investment advisers for the Michigan Public Employees’ Retirement Fund (the “Michigan Pension Fund”), which was an investor in a fund managed by Obra Capital (the “Obra Fund”). Notably, the Michigan Pension Fund had been an investor in the Obra Fund for several years prior to the hiring of the individual who made the contribution. And perhaps even more notably, this campaign contribution was made several months prior to the individual becoming a “Covered Associate” (as defined by the Rule[2]) of Obra Capital. By virtue of Obra Capital continuing to provide investment advisory services for compensation to the Obra Fund in which the Michigan Pension Fund was invested after hiring the individual, Obra Capital violated the Rule and agreed to pay a $95,000 fine to settle the charges.