The White House says Trump wants to close a favorite tax break of hedge fund managers
Published On Feb 6, 2025, 3:44 PM
The White House has noted President Trump’s intention to eliminate the carried interest tax deduction, which benefits hedge fund managers and private equity firms by enabling them to pay a lower capital gains tax on their income. This move is part of a broader discussion about tax cuts and may draw both support and skepticism from different factions within Congress. Hedge fund stocks like Apollo Global Management, KKR, and Blackstone dropped following these remarks, signaling investor concern over potential regulatory changes affecting their bottom line.
Stock Forecasts
BX
Negative
If the Trump administration successfully pursues the closure of the carried interest loophole, it will likely lead to reduced profits for hedge funds, thereby negatively impacting stock prices of companies in that sector.
KKR
Negative
KKR may see a negative impact from Trump’s comments, as closing the carried interest deduction could limit its profit margins, leading to potential downward pressure on their stock price.
APO
Negative
Apollo Global Management could face similar challenges as the carried interest deduction is integral to its profitability model; any legislative change would likely lead to investor concern and a decline in stock performance.
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