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US Treasury warns hedge funds over tax-focused “alpha” strategies
The Treasury signaled it will scrutinize managers using tax-benefit strategies, saying it will not ignore aggressive tax planning for wealthy investors.
The US Treasury has warned hedge funds and other investment managers that it plans to scrutinize tax-focused strategies that have become more popular among firms targeting wealthy investors, according to Hedgeweek.
Hedgeweek notes the Treasury’s message, citing a report by the Financial Times, that tax-driven approaches should not be treated as outside the agency’s review, and that aggressive tax planning will not be ignored.
The warning comes as managers increasingly use so-called “tax alpha” strategies to generate tax benefits, with the Treasury indicating more oversight of how those arrangements are structured.