Page 110 - Forbes - USA (November 2019)

LEGAL NOTICE The business reasons for these
STATEMENT OF OWNERSHIP, stake deals are abundant. Cash is
MANAGEMENT AND CIRCULATION
(Required by 39 U.S.C. 3685). pouring into private equity. When
1. Title of publication: Forbes. new funds are formed, institu-
2. Publication No. 00156914.
3. Date of Filing: October 1, 2019. tions generally insist that firms
4. Issue Frequency: Forbes is published monthly, except January and July. show skin in the game by putting
5. Number of Issues Published Annually: 10.
6. Annual subscription price: $34.95. their own money into funds. How-
7. Complete Mailing Address of Known Office of Publication: 499 Washington Blvd., Jersey City, NJ 07310. ever, liquidity can be an issue,
8. Complete Mailing Address of Headquarters or General Business Office of Publisher:
106 499 Washington Blvd., Jersey City, NJ 07310. especially for younger firms.
9. Full Names and Complete Mailing Addresses of Publisher, Editor and Managing Editor: Randall Lane These GP-stake sales free up cash,
(Chief Content Officer), 499 Washington Blvd., Jersey City, NJ 07310. Michael Noer (Executive Editor),
499 Washington Blvd., Jersey City, NJ 07310. Luisa Kroll (Managing Editor), 499 Washington Blvd., provide permanent capital and
N Jersey City, NJ 07310.
O 10. Owner: This publication is owned by Forbes LLC, 499 Washington Blvd., Jersey City, NJ 07310, which is can help solve complex succession
I owned by Forbes Media LLC, 499 Washington Blvd., Jersey City, NJ 07310, which is owned by Highlander issues.
A T Management LLC and Forbes Global Holdings, Inc. Highlander Management LLC is owned by SBKTM
G Holdings, Inc., 101 Avenue of the Americas, Suite 842, New York, NY 10013. Forbes Global Holdings, Inc. is But there is another factor driv-
I owned by Integrated Whale Media Investments, Inc., No. 9 Queen’s Road Central, Room 2401, 24/F Hong Kong. ing these deals: skirting Uncle
T
S 11. Known bondholders, mortgagees and other security holders owning or holding 1 percent or more of
E total amount of bonds, mortgages or other securities: None. Sam. Private equity already en-
V 12. Not applicable. joys the most absurd tax break in
N 13. Publication Title: Forbes.
I America—“carried interest,” which
14. Issue date for circulation data below: April 30, 2019.
E 15. Extent and nature of circulation:
H Average No. No. Copies allows these big fund managers
T
Copies of Single to pay capital gains taxes, rather
Each Issue Issue than income taxes, on their profit
During Published
bonuses, on the idea that their in-
12 Months Nearest to tellectual contributions should be
Filing Date
A. Total Number of Copies treated equally to the profits made
(Net Press Run) 761,774 751,615 by their investors. Carried inter-
B. Paid Circulation (By Mail and Outside the Mail)
(1) Mailed Outside-County Paid Subscriptions Stated on est has been a lightning rod with
PS Form 3541 (Include paid distribution above nominal rate, politicians for years. In 2016 even
advertiser’s proof copies and exchange copies) 612,374 633,332
(2) Mailed In-County Paid Subscriptions Stated on Donald Trump decried carried in-
PS Form 3541. (Include paid distribution above nominal rate,
advertiser’s proof copies and exchange copies) 0 0 terest, which basically lets private
equity executives pay a lower tax
(3) Paid Distribution Outside the Mails Including Sales
Through Dealers and Carriers, Street Vendors, Counter Sales rate than many wage earners. But
and Other Paid Distribution Outside USPS® 28,410 20,653 Washington has yet to curtail its
(4) Paid Distribution by Other Classes of Mail
through the USPS (e.g. First-Class Mail®) 0 0 widespread use (Blackstone’s Ste-
phen Schwarzman famously com-
C. Total Paid Distribution (Sum of 15B (1), (2), (3) and (4)) 640,784 653,985
D. Free or Nominal Rate Distribution pared President Obama’s effort
(By Mail and Outside the Mail) to eliminate carried interest to
(1) Free or Nominal Rate Outside-County
Copies Included on PS Form 3541 54,496 46,012 Hitler’s invasion of Poland), and it
(2) Free or Nominal Rate In-County again survived the most recent tax
Copies Included on PS Form 3541 0 0
(3) Free or Nominal Rate Copies Mailed at Other reform bill.
Classes through the USPS (e.g. First-Class Mail) 0 0 But these new deals go further.
(4) Free or Nominal Rate Distribution Outside the Mail
(Carriers or other means) 7,531 5,203 They effectively transform the 2%
E. Total Free or Nominal Rate Distribution (Sum of 15D (1), (2) management fees (separate from
(3) and (4)) 62,027 51,215
F. Total Distribution the standard 20% profit participa-
(Sum of 15C and 15E) 702,811 705,200 tion) from ordinary income into
G. Copies Not Distributed (See instructions to
Publishers #4 (page #3)) 58,964 46,415 capital gains, as well. How? Take
H. Total (Sum of 15F and 15G) 761,775 751,615 Gores as an example. In selling
I. Percent Paid (15C divided by 15F times 100) 91.17% 92.74%
16. Total circulation includes electronic copies. his minority stake to Dyal, he also
Report circulation on PS Form 3526-X worksheet. gave that firm a right to a portion
17. Publication of Statement of Ownership
7 If the publication is a general publication, publication of his management fees. Voilà: a
of this statement is required. Will be printed in the stream of ordinary income be-
November 30, 2019 issue of this publication.

Publication not required. comes a windfall of capital gains,
18. Signature and Title of Editor, Publisher, Business Manager or Owner reducing the maximum rate of
Nina La France,
Senior VP, Consumer Marketing & Business Development 37% to 23.8%—and potentially de-
I certify that all information furnished on this form is true and complete. I understand that anyone who
furnishes false or misleading information on this form or who omits material or information requested on the ferring that tax payment for years.
form may be subject to criminal sanctions (including fines and imprisonment) and/or civil sanctions (including “The official story [to limited
civil penalties).
partners] has always been we
The United States Postal Service (USPS) requires that subscriptions purchased by a company or association don’t make any money on man-
for the benefit of any individual be counted as free distribution. The Audit Bureau of Circulations (ABC), which
Forbes magazine utilizes for circulation validation, counts these same subscriptions as paid. agement fees, we only make

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