PwC publications on asset management, alternative investments, and real estate

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State of compliance 2014: Financial services industry brief State of compliance 2014: Financial services industry brief
Even though the corporate compliance function is better developed in the financial services sector than in other industries it continues to evolve.

 
Certain total return derivatives facing increased scrutiny Certain total return derivatives facing increased scrutiny
On July 22, 2014, the Senate Permanent Subcommittee on Investigations (“PSI”) held a hearing entitled “Abuse of Structured Financial Products: Misusing Basket Options to Avoid Taxes and Leverage Limits.” Although the purpose of the hearing was to probe the use of a particular trading strategy by certain hedge funds, it may result in increased scrutiny around total return derivatives and swaps in general and may further shed a negative spotlight on the industry.

 
Current Developments for Mutual Fund Audit Committees: 30 June 2014 Current Developments for Mutual Fund Audit Committees: 30 June 2014
This edition of Current Developments for Mutual Fund Audit Committees covers money market fund reform developments, operational and regulatory considerations for liquid alternatives, an update regarding FATCA and its impact on mutual funds, an investment spotlight on sovereign debt, and a summary of developments and articles of interest.

 
Asset manager SIFI designation: Enter SEC Asset manager SIFI designation: Enter SEC
Expect more SEC scrutiny of asset managers, and Fed supervision of the very largest.

 
Making the middle office top of mind: Transforming the asset management middle office to a bottom-line contributor
Leading asset managers are rethinking the middle-office function and using right-sourcing to cut costs and bolster revenue.

 
Enhanced prudential standards first take: Our observations on the Federal Reserve's final rule Nonbank SIFIs: No solace for US asset managers
A few, large US asset managers continue to be poised for designation as nonbank SIFIs.

 
Asset Management 2020: A Brave New World Asset Management 2020: A Brave New World
This report explores how the asset management industry’s operating landscape will change by 2020, and explains how asset managers can prepare for the challenges ahead and turn them into competitive advantages.

 
New guidance on US withholding on dividend equivalent payments on swaps over US equities New guidance on US withholding on dividend equivalent payments on swaps over US equities
On December 5, 2013, new guidance was released regarding derivatives over US equities that call for dividend equivalent payments that can be subject to up to 30 percent gross US withholding tax. Final regulations extend (to December 31, 2015) the current four factor scheme in section 871(m)(3)(A) for determining whether dividend equivalent payments on swaps are subject to US withholding tax

 
How global tax reforms might impact ETF efficiency: A look at the implications for ETF strategy and structuring How global tax reforms might impact ETF efficiency: A look at the implications for ETF strategy and structuring
Due to their low costs and potentially greater tax efficiency, ETFs offer a very efficient return to investors. ETFs’ tax advantages have contributed to their strong competitive position and growth. But a rapidly changing tax environment will present challenges as governments around the globe seek to bridge budget deficits. By staying on top of these changes, sponsors can mitigate adverse effects while remaining compliant with changing global tax laws.

 
The next generation of ETFs: Why every asset manager needs an ETF Strategy The next generation of ETFs: Why every asset manager needs an ETF Strategy
Exchange traded funds (ETFs) have enjoyed two decades of explosive growth. Evolving and proliferating as they attracted new users, ETFs went from a single vehicle providing exposure to large cap US equities to thousands of products representing a dizzying range of asset classes and strategies. As ETFs reshape their environment all over again, asset managers and intermediaries alike will want to have strategies in place to deal with the changes sweeping across the competitive landscape.

 
ETFs: How innovators and regulators are shaping growth in the Asset Management industry ETFs: How innovators and regulators are shaping growth in the Asset Management industry
As Exchange Traded Funds (ETFs) enter their next phase of growth, much rests on the actions of the regulators. Innovation created ETFs and equipped them to achieve success through flexible, inexpensive and tax-efficient tracking of broad-based market indices. While growth in ETFs is set to continue, the pace of expansion likely will be impacted by regulations.

 
PwC Mutual Fund Directors Roundtable: 2013 highlights PwC Mutual Fund Directors Roundtable: 2013 highlights
Professionals from PwC’s Asset Management practice and directors from the boards of some of the nation’s leading mutual fund groups gathered for informal discussions of the industry’s key issues and significant challenges. The perspectives presented give insights on leading practices in mutual fund oversight, how directors are meeting the challenges they face, and offer a view into the evolving role of directors and boards in the mutual fund industry.

 
The Connected Advisor: The Rise of Digital and Social Advice in Wealth Management The Connected Advisor: The Rise of Digital and Social Advice in Wealth Management
This paper examines the four forces of change that are shaping wealth management - shifting demographics, changing client behaviors and expectations, rising technological innovations and emerging disruptive competition.

 
Strategic Imperatives for Asset Managers Strategic Imperatives for Asset Managers
This paper presents a thematic introduction to the issues the asset management industry is facing, the key implications to asset managers, and the questions firms should be asking to best adapt their strategies and take advantage of these new and emerging industry demands.

 
Alternative Investment Fund Managers Directive - Impact on US Managers Alternative Investment Fund Managers Directive - Impact on US Managers
This FS Regulatory Brief is intended to inform US asset managers of the possible consequences of AIFMD, and answer some frequently asked questions.

 
9 new rules of IT strategy for asset management 9 new rules of IT strategy for asset management
The asset management industry is in the midst of significant structural change, with primary drivers including shifting investor preferences, pricing pressure and uncertain markets. While we see significant variation in how firms are adapting to these changes, we have identified many situations where asset management firms' business and IT strategies are at risk of misalignment.

 
PwC Asset Management Highlights: How asset management firms award and manage talen PwC Asset Management Highlights: How asset management firms award and manage talent
This summer, PwC conducted a webcast titled: “Highlights from the 2011 Asset Management Reward and Talent Management Survey.” During the webcast, PwC practitioners discussed general insight regarding headcount growth and talent-management trends, and deeper details surrounding a number of compensation issues including quantum and design, annual-incentive plans, deferred compensation and equity-based compensation, employee benefit plans, and issues related to governance and the regulatory environment.

 
From black box to open book: Hedge fund trust and transparency
US hedge funds have significantly enhanced their transparency, controls and infrastructure, helping to win the trust of institutional investors that is critical for their future growth. Across the hedge fund value chain, a new framework is emerging that is improving investor protection. But this evolution remains a work in progress, with inefficiencies and areas for improvement yet to be addressed.

 
Top Issues Facing Asset Managers
The asset management industry faces challenging markets, regulatory reform, competition for clients and talent, and new expectations from investors, regulators, industry partners and other stakeholders. In spite of these challenges, the asset management industry is positioned for future growth.

 
A fast take on the impact of the Dodd-Frank Act on asset management firms
Several provisions of the Dodd-Frank Act impact the asset management industry, either directly as regulated investment advisers, or indirectly as participants in the markets. Here is a summary of how Dodd-Frank impacts asset managers.

 
Asset Management Alert: India proposes legislative tax amendments Asset Management Alert: India proposes legislative tax amendments
India proposed legislative amendments to its income tax law that include the introduction of general anti-avoidance rules and provisions to retroactively tax indirect transfer of shares of overseas entities with substantial underlying Indian asset value.

 
2011 US Asset Management reward and talent management survey
PwC's 2011 US Asset Management Reward and Talent Management Survey gives human resource leaders insight into emerging trends and best practices in talent acquisition and retention. Volatile financial markets, minimal M&A activity, global regulatory reform and greater investor scrutiny continued to pressure asset managers, HR leaders are redesigning incentive and governance structures to support evolving business objectives and grow their human capital base.

 
Asset Management M&A Insights: The way forward
2011 was the worst year in global asset management mergers and acquisitions in five years. European bank divestitures, continuing improvement in valuations and strong buyer interest should improve in 2012. Competition for growth is increasing and continuing uncertainty could make managing performance difficult.

 
Attracting pension plan assets: What alternative investment managers need to know Attracting pension plan assets: What alternative investment managers need to know
Retirement plan sponsors are reconsidering alternative investments like hedge funds and private equity funds due to the lower historical volatility and higher returns. Alternative investment managers need to be aware of increased data requests to satisfy the increased transparency requirements of institutional investors.

 
How do the proposed FATCA regulations impact Asset Managers?
Long-awaited proposed regulations providing guidance on FATCA issued -- including specific implementation issues relevant to asset managers.


Fund of funds tax considerations: Managing investor and regulatory demands Fund of funds tax considerations: Managing investor and regulatory demands
This document summarizes fund of fund tax considerations as discussed during a webcast by a panel of asset management, state and local tax, and technology specialists within PwC’s Asset Management Tax practice.

 
hedge fund administration Hedge fund administration: 4 trends that may drive new growth
With growth opportunities for hedge fund administrative services decreasing, where will new demand come from? The answer lies in competitive forces now shaping the asset management industry. Learn which four key industry trends could drive new growth in hedge fund administration, and how these emerging changes could affect your business.

 
Certain total return derivatives facing increased scrutiny Certain total return derivatives facing increased scrutiny
With growth opportunities for hedge fund administrative services decreasing, where will new demand come from? The answer lies in competitive forces now shaping the asset management industry. Learn which four key industry trends could drive new growth in hedge fund administration, and how these emerging changes could affect your business.

 
Certain total return derivatives facing increased scrutiny Certain total return derivatives facing increased scrutiny
On July 22, 2014, the Senate Permanent Subcommittee on Investigations (“PSI”) held a hearing entitled “Abuse of Structured Financial Products: Misusing Basket Options to Avoid Taxes and Leverage Limits.” Although the purpose of the hearing was to probe the use of a particular trading strategy by certain hedge funds, it may result in increased scrutiny around total return derivatives and swaps in general and may further shed a negative spotlight on the industry.

 
Recent IRS ruling prompts another look at multi-year incentive compensation arrangements Recent IRS ruling prompts another look at multi-year incentive compensation arrangements
This tax alert provides a summary of a Revenue Ruling released by the IRS last week, which reinforced the ability of fund managers to use options and stock appreciation rights in a multi-year compensation arrangement.

 
Asset classes in the alternatives industry – What’s hot, what’s not Asset classes in the alternatives industry – What’s hot, what’s not
In response to today’s continuing low interest rates, asset managers are exploring new asset classes in search of higher yields. To address this trend within the alternative investments industry, PwC hosted a webcast to provide information on the market activity within specific asset classes, including what is attractive about each class, structuring opportunities and strategies, and the tax implications. This document summarizes the issues discussed by a panel of tax and asset management specialists from PwC’s Asset Management Tax, Washington National Tax Service, and Cleantech & Sustainable Business Solutions practices.

 
How does the recent FATCA guidance affect asset managers? How does the recent FATCA guidance affect asset managers?
In this Tax Insight, read about how the extensive new FATCA regulations issued by the US Department of the Treasury and the Internal Revenue Service will affect asset managers.

 
Net investment income tax: Application to alternative investments Net Investment Income Tax: Application to alternative investments
The Patient Protection and Affordable Care Act of 2010 imposed on individuals, estates, and trusts a new Medicare tax equal to 3.8% on Net Investment Income (“NII”) starting in the 2013 tax year. On November 27, 2013, Treasury issued much anticipated final regulations, effective for tax years beginning after December 31, 2012. In addition to the issuance of the final regulations, the IRS issued 2013 proposed regulations to provide guidance on issues not addressed in the 2012 proposed regulations.

 
Tax alert: Sun Capital Partners court case ruling Tax alert: Sun Capital Partners court case ruling
A recent case involving private equity fund Sun Capital Partners IV, LP (Fund IV), highlighted a potential issue for private equity funds that invest in portfolio companies with unfunded pension liabilities.

 
What does the Cayman Islands IGA really mean for the asset management industry? What does the Cayman Islands IGA really mean for the asset management industry?
This alert addresses FATCA and the recent negotiation of the IGA between the United States and the Cayman Islands. Through a series of FAQs, this alert describes what the Cayman/US IGA means for the asset management industry by addressing some of the more relevant implications of the Cayman/US IGA for asset managers based on the IGAs signed to date.

 
Implications of net investment income tax for asset managers Implications of net investment income tax for asset managers
The Patient Protection and Affordable Care Act of 2010 passed a new Medicare tax of 3.8% on Net Investment Income ("NII"), effective January 1, 2013. Although this new tax is applied at the individual level, partners will require a thorough analysis of their "net investment income" from pass-through entities.

 
Federal, State, and International Tax Audits in the Alternative Investments Industry Federal, State, and International Tax Audits in the Alternative Investments Industry
This Q&A document summarizes the key issues addressed in the PwC webcast, Tax Audits in the Alternative Investments Industry .

 
Alternative Investment Fund Reporting Under the New Cost Basis Reporting Regime Alternative Investment Fund Reporting Under the New Cost Basis Reporting Regime
In response to the broker cost basis reporting requirements, the IRS has released a revised Schedule D - Capital Gains and Losses and a new supporting schedule, Form 8949 – Sales and Other Dispositions of Capital Assets for partnerships and corporations for tax year 2012. This new form is intended to assist the IRS with the reconciliation of a taxpayer's basis records and the amounts of gains and losses being reported with its brokers' records of such amounts. However, it is not expected to be used to reconcile differences that result when a taxpayer and a broker do not agree on the particular lot that has been relieved and so it emphasizes the importance of funds and brokers addressing lot relief methods upfront.

 
12th Annual Alternative Investments Seminar highlights 12th Annual Alternative Investments Seminar highlights
PwC is hosted its 12th Annual Alternative Investments Seminar in nine US cities in 2012 and in several key international centers. This document provides highlights from the 2012 New York Alternative Investments Seminar.

 
Hedge fund transparency, controls, and infrastructure update From black box to open book: Hedge fund trust and transparency
US hedge funds have enhanced transparency, controls and infrastructure, gaining the trust of institutional investors. Across the hedge fund value chain, a new framework is emerging that is improving investor protection that is still in process.

 
Attracting pension plan assets: What alternative investment managers need to know Attracting pension plan assets: What alternative investment managers need to know
Retirement plan sponsors are reconsidering alternative investments like hedge funds and private equity funds due to the lower historical volatility and higher returns. Alternative investment managers need to be aware of increased data requests to satisfy the increased transparency requirements of institutional investors.

 
Form 8938 and Specified Foreign Financial Asset Reporting for Alternative Funds under §6038D Form 8938 and Specified Foreign Financial Asset Reporting for Alternative Funds under §6038D
In December 2011, the IRS issued a final version of Form 8938, Statement of Specified Foreign Financial Assets, along with instructions. Form 8938 is devised to facilitate the SFFA reporting requirements of §6038D, and requests information on account owner, type and value. This document provides an overview of the current filing requirements and the type of assets that are required to be reported.

 
Asset Management M&A Insights: Navigating through stormy markets Asset Management M&A Insights: Navigating through stormy markets
The instability and uncertainty of recent markets has left merger and acquisition activity unchanged from depressed levels in prior years, despite pent-up demand among buyers. Growth is clearly back on corporate agendas as CEOs are focused on how to best capture and maximize new revenue opportunities. Learn more in this inaugural issue of Asset Management M&A insights.

 
US Asset Management - The State of the Industry US Asset Management - The State of the Industry
This paper explores what we believe to be among the key challenges facing the industry, as it continues to grapple with a number of difficult issues, including: Product development, Evolving investor expectations, Mergers & acquisitions, Global tax risk, Global sourcing, Tax optimization, Performance measurement, Talent management, Regulatory change (including Dodd Frank, FATCA and more).

 
Hedge Funds 2.0: Infrastructure: From Cost to Benefit Hedge Funds 2.0: Infrastructure: From Cost to Benefit
This paper outlines why stronger hedge fund sector infrastructure is essential and discusses what this involves and the benefits it will bring

 


10th annual alternative investments seminar highlights
PwC recently held its 10th annual alternative investments seminar series across the country and internationally to explore the challenges facing the industry now and in the coming decade. The attached publication captures highlights from the seminar and provides insight into the key trends and developments discussed at the seminars.

US tax implications for sovereign wealth funds of financial derivative investments
SWFs have begun hedging the foreign currency and interest rate exposures on their investments with financial derivatives. Further, SWFs have also begun to utilize financial derivatives to achieve the fundamental economic exposure that their fund managers may be seeking.

From black box to open book: Hedge fund trust and transparency
Our view is that there is room for further improvements related to conflicts of interest and operational controls to allow the sector to truly fulfil its growth potential. As allocations to hedge funds increase, trust and transparency will now be crucial factors in winning investors’ favour for allocations of assets.

PwC's Financial Services Regulatory Practice: How we can help private equity advisors
Financial regulatory reforms passed in July 2010 will require most private equity (PE) fund advisors to register with the US Securities and Exchange Commission (SEC). After being exempt from registration for more than 70 years, PE advisors will be subject to the full scope of the Investment Advisers Act of 1940, increased disclosure and reporting requirements, and periodic inspections by the SEC. Importantly, because Congress left critical details for rule making to regulatory agencies, this adjustment will be a multiyear process.

PwC's Financial Services Regulatory Practice: How we can help quantitatively driven asset managers
This document provides a closer look at high frequency trading compliance and regulatory issues for asset managers and how PwC can help address regulatory compliance issues and manage regulatory risk effectively.



PwC real estate investor survey PwC Real Estate Investor Survey - Third Quarter 2014
The PwC Real Estate Investor Survey is widely recognized as an authoritative source for capitalization and discount rates, cash flow assumptions, and actual criteria of active investors, as well as property market information.


US Real estate insights: Summer 2014 US Real estate insights: Summer 2014
Single family homes and student housing are two areas that are gaining popularity with real estate investors. In this issue, we also provide our perspective on the latest market and economic trends, regulatory activities and legislative changes affecting the real estate industry.


US Real Estate Insights: Spring 2014 Proposed regulations on the definition of real property for REITs
On May 9, 2014, the IRS released proposed regulations (“Proposed Regulations”) which are intended to clarify the definition of “real property” for purposes of the asset tests applicable to real estate investment trusts (“REITs”). The IRS’s expectation is that taxpayers will be able to utilize the additional guidance in the proposed regulations to analyze whether their assets qualify as real property in lieu of seeking private letter rulings.


A comparative analysis of the real estate related provisions in the Camp, Baucus, and Obama proposals A comparative analysis of the real estate related provisions in the Camp, Baucus, and Obama proposals
This tax alert compares and contrasts provisions in the three proposals provided by David Camp, Max Baucus and President Obama that are particularly focused on real estate businesses.


Baucus Tax Reform Proposals and Real Estate Baucus Tax Reform Proposals and Real Estate
This PwC alert highlights the recent tax reform proposals proposed by Senator Max Baucus, who chairs the Senate Finance Committee (the “Baucus Proposals”). The proposals include a variety of proposed changes that could have a dramatic impact on those in the real estate industry, including REITs, real estate funds and their investors.


Final Net Investment Income Tax Regulations: impact on real estate investments Final Net Investment Income Tax Regulations: impact on real estate investments
This alert explores how some of the changes that were enacted as part of the Health Care and Education Reconciliation Act of 2010, the Medicare Contribution Tax ("MCT," also referred to as the Net Investment Income or NII tax) affect real estate investments as well as additional considerations relevant to our industry.


Real Estate 2020: Building the future Real Estate 2020: Building the future
As confidence returns to real estate, the industry faces a number of fundamental shifts that will shape its future. PwC has looked into the likely changes in the real estate landscape over the coming years and identified the key trends which, we believe, will have profound implications for real estate investment and development.


Emerging Trends in Real Estate® 2014 Emerging Trends in Real Estate® 2014
Now in its 35 th year, Emerging Trends in Real Estate® is one of the oldest, most highly regarded annual industry outlook for the real estate and land use industry. It includes interviews and survey responses from hundreds of leading real estate experts, including investors, developers, property company representatives, lenders, brokers and consultants.


PLR 201315004: The IRS rules favorably on a REIT’s prohibited transaction issues PLR 201315004: The IRS rules favorably on a REIT’s prohibited transaction issues
The IRS has recently ruled in PLR 201315004 that net income derived from sales of a portfolio of properties may not be treated as income derived from prohibited transactions.


The overhaul of lease accounting: Catalyst for change in corporate real estate The overhaul of lease accounting: Catalyst for change in corporate real estate
The proposed lease accounting changes may provide a catalyst for change to companies' real estate operations that go well beyond what is required for the accounting change. As a result, this is causing many companies to reconsider other aspects of their operations with respect to real estate - both owned and leased.


Emerging Trends in Real Estate® 2013 Emerging Trends in Real Estate® 2013
Now in its 34th year, Emerging Trends is one of the oldest and most trusted sources for the annual industry outlook for the real estate and land use industry, with interviews and survey responses real estate experts, investors, developers, property company representatives, lenders, brokers and consultants.


The impact of the repair regulations on the real estate industry The impact of the repair regulations on the real estate industry
The IRS recently published Notice 2012-73, which announced an intent to delay the effective date of the “repair regulations” that provide new rules related to the acquisition, production, or improvement of tangible property until taxable years beginning on or after January 1, 2014.


Impact of new Medicare contribution on tax real estate investments Impact of new Medicare contribution tax on real estate investments
This alert summarizes the mechanics of the 3.8% Medicare Contribution Tax and its impact on U.S. investors with domestic and/or foreign real estate investments.


Real Estate Tax Alert: Private Letter Rulings 201216007 and 201220012 Real Estate Tax Alert: Private Letter Rulings 201216007 and 201220012
The IRS issued proposed regulations regarding the circumstances in which a REIT will be subject to corporate level tax on the built-in gains in property received by the REIT from a C Corporation (the “BIG tax”).


IRS issues proposed regulations on Built-in Gains Tax PIRS issues proposed regulations on Built-in Gains Tax
The IRS issued proposed regulations regarding the circumstances in which a REIT will be subject to corporate level tax on the built-in gains in property received by the REIT from a C Corporation (the “BIG tax”).


Real Estate Tax Alert: Summary of REIT Private Letter Rulings Real Estate Tax Alert: Summary of REIT Private Letter Rulings
This alert summarizes certain significant private letter rulings issued by the IRS to REITs during the last year.


Real Estate Tax Alert: Rev. Rul. 2012-17 Real Estate Tax Alert: Rev. Rul. 2012-17 — June 2012
In Rev. Rul. 2012-17, the Internal Revenue Service has ruled that a REIT’s investment in the shares of a money market fund constitutes an investment in "cash and cash items" for purposes of section 856(c)(4)(A) of the Internal Revenue Code.


The Impact of FATCA Withholding on REITS, Real Estate Funds, and Real Estate Investment Entities The Impact of FATCA Withholding on REITS, Real Estate Funds, and Real Estate Investment Entities
Real estate entities have complex international structures with different considerations with respect to FATCA withholding regarding US and non-US entities. This alert focuses on US entities and their obligations under the new FATCA withholding regime.


Roadmap for a REIT IPO: A summary guide for going public Roadmap for a REIT IPO: A summary guide for going public
The REIT IPO market window is beginning to open and real estate companies need to address IPO processes and timelines, tax planning, structuring, and ongoing compliance, corporate governance, and accounting and internal controls considerations. Challenges to taking a REIT public include selecting and negotiating with investment bankers, managing dividend levels, developing a business strategy, and more. This REIT IPO guide provides help on how to handle these and many more issues.


US Asset Management - The State of the Industry US Asset Management - The State of the Industry
This paper explores what we believe to be among the key challenges facing the industry, as it continues to grapple with a number of difficult issues, including: Product development, Evolving investor expectations, Mergers & acquisitions, Global tax risk, Global sourcing, Tax optimization, Performance measurement, Talent management, Regulatory change (including Dodd Frank, FATCA and more).


Becoming FATCA Compliant - Why asset managers should prepare now Becoming FATCA Compliant - Why asset managers should prepare now
Beginning January 1, 2013, the provisions of the Financial Account Tax Compliance Act (FATCA) will impose a 30% US withholding tax on any US-sourced income and the gross proceeds from the sale of investments that produce US sourced interest or dividends (withholdable payments) received by any offshore fund or other foreign financial institution (FFI).