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West Palm Beach (HedgeCo.net) – Hedge fund manager, Majid Al Futtaim Asset Management, is launching its first Middle East and North Africa (MENA) equity fund, the Luxembourg domiciled ‘Elite MENA Equity Fund’.
Investors can invest alongside the family office of Majid Al Futtaim and gain access to the services of the portfolio management team responsible for the MENA equity investments. The Majid Al Futtaim family office has seeded the fund with Dh550 million ($150 million), making it one of the largest MENA equity funds available to investors.
"Investors deserve to have the best home for their money in both turbulent and stable investment environments." Iyad Malas, Chief Executive, Majid Al Futtaim Asset Management, said, "By opening the doors to the services of the portfolio management team responsible for Majid Al Futtaim’s family office, we offer investors a tried and tested place to invest. The Elite MENA Equity Fund offers investors an opportunity to invest with a team whose performance speaks for itself."
The new ‘long-only’ open-ended fund aims to achieve long-term asset growth and capital preservation through a ‘Risk-Managed Growth’ approach to MENA investments.
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New York (HedgeCo.Net) – A year-long probe launched by a U.S. Senate Committee has discovered that numerous Wall Street banks have assisted offshore hedge funds in evading millions of dollars in U.S. taxes. The Permanent Subcommittee on Investigations has concluded that Lehman Brothers, Morgan Stanley, Merrill Lynch, UBS, Citigroup and Deutsche Bank created products to skirt a law that required them to withhold the 30 percent tax on stock dividends paid to offshore investors.
While the IRS apparently turned a blind eye, the actions taken by the bank allowed these funds to sell their shares to the bank while entering into a swap contract that paid a fee to the banks in exchange for the amount of the dividend plus any gains.
"Major financial institutions have devised complex financial structures to enable their offshore clients to dodge U.S. dividend taxes," Democratic Senator Carl Levin of Michigan said in a statement Wednesday. "We need legislation to take these abusive tax-avoidance gimmicks off the market, and we need to end the silence and inaction of the Treasury and IRS in the face of rampant dividend tax dodging."
Levin went on to say, ““We are going to press the IRS to go after what is obviously a scheme.” “The IRS should be going after this. They are not.”
The Committee found that Lehman Brothers clients were able to avoid about $115 million in taxes in 2004, while total losses to U.S. revenue are estimated to be around $100 billion a year. These dividend-enhancement products earned UBS about $5 million in 2005 and $4 million for Deutsche Bank in 2007, according to the report. Morgan Stanley also raked in $25 million in revenue from the products in 2004.
"We believe we acted in good faith when we advised our clients and believe we acted appropriately under existing tax law," said William Halldin, spokesman for Merrill Lynch.
IRS spokesman Frank Keith came to the defense, stating, “The IRS intends to aggressive pursue transactions that it believes to be abusive.”
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
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Los Angeles Times – Big Wall Street investment banks have designed and marketed schemes enabling non-U.S. taxpayers, including offshore hedge funds, to evade millions of dollars in taxes each year on U.S. stock dividends, Senate investigators have found.
Some banks have been crafting for more than 10 years transactions designed to enable their foreign clients to dodge U.S. taxes on dividends, while the Internal Revenue Service failed to act to prevent the abuse, two senators say.
A yearlong investigation by a Senate Homeland Security and Governmental Affairs subcommittee, whose results are to be made public Thursday, found that the evasion of dividend taxes adds up to billions of dollars in revenue lost to the U.S. Treasury over the past decade.
IRS Commissioner Douglas Shulman is scheduled to testify on the issue at a hearing Thursday by the investigative subcommittee. Executives of Lehman Brothers Holdings Inc., Morgan Stanley and Deutsche Bank, and from several hedge funds also are expected to appear as witnesses.
Bloomberg – Lehman Brothers Holdings Inc., UBS AG and Merrill Lynch & Co. are among Wall Street firms that concocted derivatives and stock-loan deals to help offshore hedge funds dodge hundreds of millions of dollars in U.S. taxes, according to a U.S. Senate committee investigation.
The Internal Revenue Service looked the other way while securities firms sold complicated financial products designed to skirt a law requiring them to withhold U.S. taxes on stock dividends paid to offshore investors, said Senator Carl Levin, chairman of the Permanent Subcommittee on Investigations.
Levin, a Michigan Democrat, said he wants the IRS to pursue back taxes or penalties against Wall Street firms and their hedge-fund clients that got around a 30 percent dividend tax.
“We are going to press the IRS to go after what is obviously a scheme,” Levin said, while briefing reporters yesterday about the committee’s yearlong probe. “The IRS should be going after this. They are not. They have been pussyfooting around this.”
