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The II Fear Index: Investors Think Private Equity Should Pay

Asset managers and allocators call for higher taxes on carried interest, II’s weekly poll finds.

Institutional investors have a remedy for the mounting pile of public debt accumulating during the coronavirus crisis: Tax private equity.

Asked how their national governments should adjust tax policies to offset stimulus spending, 62 percent of surveyed asset owners and investment managers suggesting increasing taxes on private equity, carried interest or performance fees, and special purpose vehicles.

Investment professionals polled for this week’s II Fear Index expressed support for increasing the tax burden on high-income earners, while lowering taxes for individuals who make less money.

In total, 107 investors answered questions on their level of optimism about their own professional lives and the larger economy, as well as how and when businesses should start reopening.

The topic of reopening proved divisive: Fifty-four percent said that relaxing social distancing guidelines was a step in the right direction, while 46 percent called it was the wrong move. Sixty percent of polled investors believe that governments should be doing more to ensure public health right now — a slight decline from 63 percent last week and 66 percent the week before.

The remaining 40 percent said governments’ priority should be economic stability. 

[II Deep Dive: The II Fear Index: Investors Expect Long Lockdown]

Investors have so far expressed skepticism over their national governments’ handling of economic matters — a trend that continued in this week’s poll. Forty-four percent said they felt less optimistic this week about stewardship of their countries’ economies, while just 15 percent reported being more optimistic. Last week, 36 percent indicated a decrease in optimism, while 20 percent voiced increased optimism.

Investors also continued to offer a negative outlook on the economy in general, with 41 percent expressing increased pessimism over the economic prospects of their respective countries. Still, 21 percent said they felt more optimistic this week, up from 14 percent who said the same in last week’s poll.

Investors expressed the most optimism about talent management.

Just over a third said they felt more positive about their institution’s ability to attract and retain well-qualified workers, compared to 13 percent who reported a decrease in optimism. The remainder had not changed their views from last week.

More results from the II Fear Index poll continue below. If you would like to contribute to the index, please register here

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