There is another round of private equity hearings on Capital Hill today, with speakers to include Bruce Rosenblum of The Carlyle Group and Adam Ifshin of Oaktree Capital Management.
If they’re able to push a few more Democrats into the “nay” camp on change, then this whole issue might be dead until a Democratic president is elected (be it in 2008 or beyond).
Seems some are buying into the idea that PE firms will simply push the costs on to limited partners, and no Democratic politician wants to be responsible for reducing pension fund returns. But, as I’ve said before, I think that worry is relatively specious. A few firms might raise fees, but most will be unable to do so at a time when returns are dropping.
I actually put the question to a roomful of PE firm CFOs last week, and the majority said that they did not believe a tax treatment change would lead their firm to increase fees or carry percentage on limited partners.