Warren’s war on private equity, Mayrhofer Q&A, Blackstone boost

Elizabeth Warren just gave an old political football an ambitious punt. As detailed by PE Hub editor Chris Witkowsky in this post, the bill goes after a number of areas that are fundamental to the way the industry operates today.

It would (courtesy of this section-by-section summary): make financial sponsors liable for portfolio company debt; stop any distributions being made within two years of an acquisition; tax monitoring fees out of existence; remove the tax deductibility of interest payments; up severance pay and other rights for workers; tax carry as income; and increase the disclosure that firms make to the SEC.

It’s like a laundry list of every PE lobbyist’s worst nightmare.

Says Chris: “The bill is far from law. It’s been introduced to the House of Representatives and Senate and will go into hearings across various committees in the House like those governing securities rules, bankruptcy and tax law. It requires a vote in the committees to make it to the House floor, where it would receive a full vote. If it survives that process, it would move to the Senate and go through a similar process.”

CFO Q&A

What does it take to be an effective private fund CFO today? A broader set of skills to oversee technology and data initiatives, says EJF Capital’s Thomas Mayrhofer: “Simply put, the modern CFO needs to be more involved in where the business is going as opposed to just tracking where it has been.” The former Carlyle Group PE CFO gives us his take on the changing role of the CFO and why he travels to see his outsourced partners whenever he can.

C-corp happiness

Blackstone announced results yesterday and CFO Michael Chae was pleased with the results of the firm’s switch from a partnership structure to a corporation. The stock price is up and the firm has its sights set on several market indices to which it expects to be added in the next few months.

Email prepared by Toby Mitchenall