NYALT News

The One Big Beautiful Bill Act: Spotlight on asset management

Provided by Grant Thornton. September 23, 2025

The asset management industry was largely unscathed by the One Big Beautiful Bill Act (OBBBA), despite several ominous proposals in earlier versions of the legislation. In fact, there are several provisions that are favorable to private funds, portfolio companies and investment management companies. Because of these changes, asset management companies should plan around these new OBBBA provisions when considering new investments and maximize investor returns by taking advantage of the various taxpayer-favorable opportunities and tax certainty provided by the OBBBA.

Although the OBBBA makes a wide range of modifications to current tax law, several key provisions important to the asset management industry remain unchanged:

• Carried interest holding periods remain at three years 
• Management fee waivers continue to be a potential tax-efficient strategy for fund managers if they adhere to specific guidelines 
• Maximum long-term capital gains rates remain at 20% 
• Net investment income tax provisions continue to apply 
• There is nothing in the OBBBA that addresses the limited partner exception for self-employment tax based on state law designation as a limited partner, despite significant IRS scrutiny and litigation in this area 
• The so-called “revenge tax” under proposed Section 899 was not enacted 
• The proposed excise tax on litigation financing was not enacted