This course will cover key finance and tax topics relating to structured investments, from the transactional level to a portfolio perspective. A key premise of the class is that pattern recognition, fundamental understanding and insights about structuring require a combination of top down and bottom up perspectives across a wide scope of coverage.
Many of the same generic risk/return and tax considerations arise across asset classes, from traded derivatives to structured private equity investments. Similarly, many of these topics recur from the individual position level to fund level to ultimate investor portfolio. This course examines how the same finance concepts (e.g., the characteristics of an option) can be employed in varying contexts and structures, but are taxed differently notwithstanding economic similarities. For example, we trace and measure the interest component of returns through various instruments, and examine how that interest component is taxed differently depending on context and structuring choices.
The goal of the course is for students to develop perspective, intuitions and some technical facility in shaping risk/return through structuring, with awareness of tax considerations and implications for after-tax returns.
The course should be useful to investors, investment advisors, family office executives, investment bankers and finance executives.
Topic areas will include:
- Use of structure to shape, allocate and underwrite risk/return (attach/detach levels, embedded options and convexity, etc).
- Tax considerations in structuring, including differing tax treatment of economically similar instruments, transactions and investment strategies.
- Fund and portfolio level structuring, GP and LP (taxable and tax-exempt) investor perspectives, including blocker strategies.
- Incorporating tax attributes and after-tax returns into underwriting and performance measurement, from direct investments to fund investments to portfolio construction.
- Recent innovations in tax-aware investment strategies and investment products.
