Investment Management - Tax


Tax issues in the investment management industry are inseparable from the business issues.

Blank Rome’s tax attorneys are well versed in both the tax and business issues of the investment management industry and have substantial experience counseling private and publicly registered investment funds. For private funds, we represent both GPs and LPs, including a substantial practice representing institutional investors as LPs. We have provided advice to fund sponsors, fund investors, and principals of fund sponsors, and have helped them to capitalize on opportunities through our thorough knowledge of tax, regulatory, and business issues specific to this industry.

We have worked along the whole spectrum of this industry, from large highly institutional funds to small entrepreneurial or first-time funds. We adapt our approach to fit the context. We’ve designed unique fund structures for specialized investment programs involving hybrid funds that combine features of both hedge funds and private equity funds. 

We work with private equity funds, venture capital funds, real estate funds, mezzanine funds, distressed debt funds, lending funds, mutual funds, and closed-end investment companies. Our experience in cross-border fund structures allows us to help you with inbound investment into U.S. funds by non-U.S. investors as well as outbound investment in non-U.S. funds by U.S. investors. 

How We Can Help

Our tax attorneys handle: 

  • Master-feeder structures
  • Private real estate investment trusts (“REITs”) 
  • Complex distributions and capital account allocations 
  • The design of carried interests for both funds and general partners (including with vesting provisions)
  • Management fee waivers 
  • Capital gains “cherry picking”
  • Management fee expenses 
  • Clawbacks
  • Alternative investment vehicles 
  • Unrelated business taxable income (“UBTI”) planning (including “fractions rule” funds)
  • Passive foreign investment companies and offshore lending

Our tax attorneys also represent institutional investors, both taxable and tax-exempt, on tax issues relating to alternative investments in private investment funds. We offer a very efficient review of fund documents and work seamlessly with fund sponsors and their counsel. Our goal is to secure appropriate drafting of documents and to ensure you are realizing the expected economic terms while being provided with all appropriate legal protections.

What Sets Us Apart

  • Top national and state rankings for Corporate Law and M&A Law in U.S. News & World Report—Best Lawyers.
  • Blank Rome has been ranked top-tier in M&A Middle Market by The Legal 500, which stated that the firm is “extremely active in the purchase, sale, and combination of business entities.”
  • Blank Rome consistently ranks as a “Top 10” firm focusing on M&A matters, according to the Directors & Boards annual survey of directors of major North American companies. 
  • Chambers USA ranks Blank Rome for its corporate/M&A and tax work:
    • “a middle-market-focused team advising clients on matters including public and private M&A, joint ventures and securities offerings.”
    • “‘high-quality lawyers doing a breadth of work and transactions.’”
  • Our attorneys are frequent lecturers on M&A matters, and are well-known for “writing the book” on all aspects of valuing and selling businesses and capital formation entities, such as The Complete Guide to Valuing and Selling your Business.