Private Equity Newsletter, Spring 2007

In this issue, we bring you articles reporting on a Capitol Hill rumor that would change the current long-term capital gains tax treatment of carried interest to ordinary income tax treatment (p.2), reporting on proposed SEC rules affecting the types of investors that can pool funds together in investment vehicles and create potential barriers to entry (p.3), and highlighting the increased use of indemnification agreements by portfolio companies in favor of investor funds in minority investments (p.5). For our industry focus, we turn to the energy and utility industry, which is seeing an increase in investments by private equity funds, as evidenced by the buyout of TXU Corp. by a private equity consortium group led by KKR, Texas Pacific, and Goldman Sachs for $45 billion (p.7).