Private Equity's Blind Bets on the Future
There are a number of ways to deal with unpleasant realities. One is to confront them head-on. Another is to let someone else handle them. And a third is - well, let's call it the Scarlett O'Hara method: "I can't think about that right now. If I do, I'll go crazy. I'll think about that tomorrow." When it comes to carried interest and portfolio valuations, it seems private equity investors are auditioning for a Broadway revival of Gone with the Wind. We asked several PE investors and lawyers what they've been doing to prepare for the new regime of higher carried interest taxes, considering that they've had a full three years to think about the issue. One lawyer's estimation was repeated several times: "The big picture answer is that a lot of firms haven't done very much at all. There have been some efforts to do something about carried interest. There has also been a lot of resistance to those efforts."
