A coalition of minority and women money managers today announced the formation of a new organization to lobby against federal legislation that would raise the tax on carried interest of private equity firms and other investment partnerships.
In a teleconference, members of the new Access to Capital Coalition said increasing the tax would hurt the ability of minority-owned investment partnerships to recruit talent, reduce the incentives for the firms and drive up the costs of capital for the small and midsize companies in which smaller partnerships invest.
The carry is what people work hard for, said Willie E. Woods Jr., president of private equity firm ICV Capital Partners. Mr. Woods is chairman of the National Association of Investment Companies, a group that represents money managers owned by minorities or invest in projects that benefit minority markets, and a member of Access to Capital.
Among the Access to Capitals financial backers, according to Mr. Woods, is the Private Equity Council, a Washington-based lobbying group that represents some of the nations largest private equity firms such as the Blackstone Group, Carlyle Group and Kohlberg Kravis Roberts. Firms in the coalition include Nogales Investors Management and the RLJ Cos.
Access to Capital has its sights set in particular on a pending House bill that would change the tax status of carried interest to ordinary income from capital gains. That would effectively raise the tax to as much as 35% from 15%.