Each business day HedgeCo.Net keeps you informed with the top hedge fund industry news, opinion and insight from around the globe. From the latest hedge fund launches, to the impact of regulation, competition, and investor activism - we track the topics and people that make a difference to you.
Reuters – Investors, encouraged by a growing number of acquisitions and public floats in the past few months, are keeping a close eye on a coterie of promising startups in Silicon Valley.
An informal poll of venture capitalists and others pointed to six privately held companies as the ripest for acquisition or readiness to go public, out of 34 cited in industries ranging from alternative energy to social networking.
For now, the Silicon Valley Six say they intend to keep growing rather than agreeing to be acquired or go public during the recession.
AltAssets – Abbott Capital Management, a US-based independent investment manager, announced today that it has met its target for the Abbott Capital Private Equity Fund VI, having raised over $1bn.
Like Abbott’s previous funds, the investment strategy for ACE VI is to invest in a range of venture capital and growth equity, buy-out and special situations funds within the US and other developed markets.
Forbes – John Rutledge is the chairman of Rutledge Capital, a private equity investment firm that has invested more than $150 million in middle-market manufacturing, distribution and service companies. He is also member of the Advisory Boards of B.V. Group, a venture capital, hedge fund and real estate investment firm, and First Q Capital, a hedge fund.
Rutledge is a visiting professor at the Chinese Academy of Sciences and chief adviser for finance and investment to the governor of the Haidian District in Beijing. He is a board member of the Progress and Freedom Foundation, the Heartland Institute and a senior fellow at the Pacific Research Institute.
Bloomberg – Executives at buyout, venture-capital and hedge-fund firms will pay an estimated $24 billion more in taxes over nine years if President Barack Obama gets his way.
Obama’s 2010 budget proposal, released today, proposes raising taxes on the managers by treating carried interest, the portion of profits they take from successful investments, as ordinary income instead of capital gains. That change would boost the tax rate, starting in 2011, to 39.6 percent for most executives from the 15 percent they now pay.
The proposal applies to partnerships that receive a portion of the profits they make for their clients. It will likely reignite a debate begun in 2007 amid the biggest buyout boom in history, when firms including Blackstone Group LP and Och-Ziff Capital Management Group raised their profiles through public stock listings. While the House of Representatives approved the tax change that year, the measure wasn’t taken up by the Senate.
“Obama and his team are up for a fight here,” said George Teixeira, a managing director with accounting firm RSM McGladrey in New York. “They’re missing key components of what these industries do.”
The change could hurt funds’ abilities to hire and retain managers, Teixeira said. The majority of pay at hedge funds and private-equity firms is drawn from their share of clients’ profits, typically 20 percent of the gains.
“If they have an incentive to give, they can keep their talent,” he said. “If that’s not there, it’s going to be tough to keep people.”
