In our new Talking. Secondaries. series, we will seek to demystify the secondaries and synthetic secondaries markets and provide insights into the variety of tools available to GPs when looking to provide liquidity to their limited partners and their portfolios.
In the seventh instalment of our Talking. Secondaries series, we examine the US tax rules for publicly traded partnerships ("PTPs"). Secondaries transactions can potentially trigger adverse tax consequences for the fund and its investors under these rules. Many GPs will refuse consent to a secondary unless they are satisfied the transaction will not result in the fund becoming a PTP.
