Demand Grows For Tax Transparent Vehicles
Monday, March 8, 2010
There has been steady growth in popularity of tax transparent pooling vehicles across the investment community in recent years, according to BNY Mellon.
BNY Mellon Asset Servicing has
announced that assets under administration serviced on its cross-border pooling
platform have surpassed the EUR100bn (USD137bn) mark.
BNY Mellon provides full-service custody, tax, and fund administration services
to multinational plan sponsors and fund managers, who manage tax-transparent
pooled funds invested globally.
There are a range of tax-transparent cross-border pooling vehicles designed
to allow multiple investors to co-invest their assets to achieve economies of
scale while still preserving their beneficial tax treaty status. Tax-transparent
vehicles serviced by BNY Mellon include Luxembourg's Fonds Commun de Placement, the Irish Common Contractual Fund, and in the Netherlands, Fonds
voor Gemene Rekening.
In today's market environment, tax-exempt investors are keenly aware of the
liquidity and performance implications that can arise from not reclaiming withholding
taxes – for example, US dividends are subject to a 30% withholding tax
when treaty exemption is not claimed.
Kerry White, Managing Director, Global Product at BNY Mellon Asset Servicing,
said: "We have been very encouraged by the general acceptance and growth
of tax transparent pooling vehicles across the investment community in recent
years. We have built a robust and scalable platform that can handle the many
nuances and complexities of these sophisticated programmes, and so are well
positioned to maintain our leadership position in this burgeoning market.”