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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.