"On the investment side, we rarely have discussions these days that focus on returns left over from the pre-crisis markets. In other words, can't I get 10%, 12%, etc.?" Gore said. "The discussions are more focused on concerns around volatility, mitigation of risk, and portfolio preservation against downward spikes in the market."
Another trend, he said, is that clients are now much more aggressive in providing information so they can best review and enhance their strategy and make intelligent decisions. Although many clients seek higher yields on their investments, some are still on the sidelines, shunning risk.
-Bruce W. Fraser
Carried-Interest Tax Increase Proposed
(Bloomberg News) Representative Sander Levin has outlined a new proposal in his five-year effort to increase the tax rate that private equity managers and other investment executives pay on their so-called carried interest earnings.
The bill by the Michigan Democrat is similar to a proposal in President Barack Obama's fiscal 2013 budget. The administration estimates the change would generate $13.5 billion in additional taxes over the next decade.
"This loophole for years has unfairly enabled some of the highest-paid individuals in the country to sharply reduce their tax bills and it is time to close it once and for all," said Levin, the top Democrat on the House Ways and Means Committee, in a statement.
Republicans object to the tax change, saying it would hurt economic growth. The House passed Levin's proposal when Democrats controlled the chamber. It hasn't advanced since Republicans took control of the House after the 2010 election.
Private equity managers are paid management fees and carried interest, which typically is a 20% share of the profits earned by their funds. The management fees are taxed as ordinary income, which has a top rate of 35%, and carried interest is considered a capital gain taxed at a top rate of 15%.