President Obama’s efforts to change rules on carried interest are misguided, said Steve Klinsky, founder and chief executive of New Mountain Capital, in a wide-ranging video interview with Reuters Insider and sister magazine Buyouts. The entire 4-minute video can be viewed here.
Carried interest, said Klinsky, is “something very different from salary, something very different from bonus. You take a business, you spend years building value, and if you do in fact sell it at capital gain, you get charged at capital gains rates. That’s what carried interest means.” He said “hopefully people will look at it more fairly and level-headedly.”
Reflecting on the financial crisis, he said private equity got caught up in the rage directed at Wall Street, even though private equity itself had little to do with the crisis itself. “We got caught up in that spirit of revenge,” he said.