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Date: Wednesday, December 27 2017 05:02 PM 
Subject: (BN) Leon Black's Tax-Overhaul Dilemma Could Alter Wall Street M 
From: Glenn Dubin (DUBIN & COMPANY LP) 
To: undisclosed-recipients:; 
BCC: jeevacation@gmail.com; 
> 
(BN) Leon Black's Tax-Overhaul Dilemma Could Alter Wall Street M 
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Leon Black's Tax-Overhaul Dilemma Could Alter Wall Street Model 
2017-12-27 11:00:00.2 GMT 
By Simone Foxman and David Carey 
(Bloomberg) -- Leon Black recently posed a question whose 
answer will determine how profitable the new U.S. tax regime 
could make Wall Street firms like his Apollo Global Management 
LLC. 
Publicly traded partnerships, such as Apollo, are taxed 
differently than corporations. So should Apollo take advantage 
of the overhauled tax rules to pay less in taxes? Or should it 
use this chance to change to an Inc. from an LLC, which would 
increase its tax bill but allow it to attract investments from 
mutual funds that have previously been out of reach? 
"We're still analyzing," Black told the Goldman Sachs U.S. 
Financial Services Conference Dec. 6. "It's an uncertain 
outcome." 
Either way, it's most likely a money-making outcome. The 
tax changes are a boon for private equity firms such as Apollo, 
where Black is chief executive officer. The new lower corporate 
rate has made it possible for bigger publicly traded 
partnerships to consider the change. As it is, management fees, 
which typically account for 30 percent or more of their 
earnings, are already taxed at the corporate rate. That will 
drop. The legislation scarcely touched the 23.8 percent rate 
paid on incentive fees, also called carried interest, which 
incur no additional levy when paid out to shareholders. 
Double Tax 
If the partnerships converted to corporations, the 
incentive fees would be hit with a second layer of tax when 
they're paid out. That would push the combined tax rate on 
incentive income paid out as dividends to nearly 40 percent, 
according to Peter Furci, co-chair of Debe

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