Risk Matters

Reader comment on: Bloomberg on Carried Interest

Submitted by RetailJeff (United States), Sep 15, 2011 16:33

The issue is much more complicated than you are making it here. The problem is that law is a blunt instrument. In Commercial Real Estate partnerships and LLC's, the developer is compensated with Sweat Equity. The developer also provides the debt guarantees. As we have experienced over the last few years, the debt guarantees present real financial risk. In other words, developers have true downside risk. Hedge Fund managers only have upside risk. The proposed laws do not differentiate.

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