Proposals to allow sovereign wealth funds to invest in US private equity funds without losing their tax-exempt status could boost investment in the asset class, says US law firm Pepper Hamilton in a recent note.
Sovereign wealth funds are often formed as entities separate to a government, and if a SWF conducts any so-called ‘commercial activity’ anywhere in the world, they currently stand to lose their special sovereign-related tax exemption status (on certain types of income) in the US. Commercial activities are defined as “business conducted for income or gain”………………………………………..Full Article: Source