Blocker Structuring in the Wake of US Tax Reform: Key Considerations for US Venture Funds and Their Investors

Recording of a 90-minute premium CLE/CPE webinar with Q&A


Conducted on Tuesday, December 17, 2019

Recorded event now available

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Program Materials

This CLE/CPE webinar will provide tax counsel and private investment professionals with a practical guide to structuring investments by private equity and venture capital funds (PEVC Funds) in a manner that seeks to address the various tax sensitivities of PEVC Fund investors.

Description

Investors in PEVC Funds have a variety of different, sometimes competing, tax concerns when it comes to how their capital is invested. Common examples include US tax-exempt investors who may be sensitive to the receipt of unrelated business taxable income (“UBTI”) and non-US investors who may be sensitive to the receipt of income that is treated as effectively connected to a US trade or business (“ECI”). While navigating the concerns of a diverse investor base is not a new task for PEVC Funds, tax reform has added more wrinkles to the analysis.

This panel will outline the benefits and potential risks to (1) US tax-exempt investors investing in "blocker" corporations to block UBTI and (2) non-US investors investing in “blocker” corporations to block ECI. The panel will also consider the impact of blocker structures on US PEVC Fund investors that are not sensitive to UBTI or ECI. The webinar will also address the implications that tax reform has had on traditional structures and expectations.

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Outline

  1. UBTI and UBIT impact of private equity, hedge fund, and offshore funds
  2. Blocker corporations
  3. Foreign vs. domestic structuring considerations
  4. Assets to hold in blocker corporations and capitalization issues
  5. Required filings
  6. Tax and operational risks

Benefits

The panel will review these and other noteworthy issues:

  • US PEVC Fund activities that generate UBTI
  • US PEVC Fund activities that generate ECI
  • Consequences to investors of UBTI/ECI
  • Blocker structures utilized by PEVC Funds to mitigate the impact of UBTI/ECI
  • How PEVC Fund focus and strategy impacts optimal blocker structure
  • Negotiation strategies for PEVC Funds and their Investors to ensure specific sensitivities are not overlooked

Faculty

Clegg, Jace
Jace E. Clegg

Atty
Gunderson Dettmer Stough Villeneuve Franklin & Hachigian

Mr. Clegg's practice encompasses all areas of general corporate and partnership income taxation as well as the...  |  Read More

Huber, Brian
Brian D. Huber

Partner
Gunderson Dettmer Stough Villeneuve Franklin & Hachigian

Mr. Huber supports venture capital and growth equity fund managers on all aspects of the fund lifecycle. He has...  |  Read More

Other Formats
— Anytime, Anywhere

Strafford will process CLE credit for one person on each recording. All formats include program handouts. To find out which recorded format will provide the best CLE option, select your state:

CLE On-Demand Video

$347

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CPE Not Available

$347