Congressional Republican tax proposals dating from before the 2016 election and ideas that President Donald Trump has espoused since taking office that could alter the alternative investing playbook and push down returns are sparking a lot of potential investment scenarios but no real answers.
The unsettled nature of tax reform is causing a great deal of uncertainty in the private equity and real estate investment industries. Increasing the uncertainty, on April 12, President Trump said he now plans to finish health-care reform before he tackles tax reform.
Even so, investment managers are debating scenarios which, if they come to fruition, would be a test for them, insiders say.
Proposals that include a border tax, elimination of the interest deduction on corporate debt and a change in the tax treatment of capital expenditures have gotten “very little attention,” said Bill Sacher, partner and head of private credit in the New York office of alternative investment fund-of-funds and secondary market manager Adams Street Partners LLC.
