Credit funds: A taxing proposition

Complying with tax rules can make setting up private debt funds a complex task, but there are ways to navigate the maze.

Serena Lee

Credit funds continue to grow as they take on an ever-broader range of financing roles. However, there are several tax rules that can create traps for the unwary, and affect fund returns, investors’ tax treatment and, ultimately, the optimal fund structure. While the partnership structure is familiar to investors, it may not be the most efficient.

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