KPMG report: Transfer pricing methods for asset management sub-advisers
Asset management companies’ options for remunerating sub-advisers and the preferred structure’s effect on transfer pricing method selection
KPMG report
Sub-advisory functions performed within an asset manager legal entity structure have historically been rewarded through a range of applicable transfer pricing methods. Typically, the chosen method, which has a significant impact on the relevant entity’s profit and losses, will be determined through a review of its role in the asset manager’s value chain. Carried interest or a performance allocation is a typical remuneration component for a general partner of some alternative investment classes (e.g., private equity funds and hedge funds).
Read a June 2023 report* [PDF 346 KB] prepared by KPMG LLP that explains asset management companies’ options for remunerating sub-advisers and the preferred structure’s effect on transfer pricing method selection.
*This article appears in Tax Notes International (12 June 2023) and is provided with permission.
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 3712, 1801 K Street NW, Washington, DC 20006.