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Wednesday, 7 December 2016
Last updated 12 hours ago
Jan 2 2013 | 12:10pm ET
Fortress Investment Group co-founder Robert Kauffman retired from the firm last week in a bid to avoid a higher tax bill.
Kauffman announced his exit from the firm two days before Christmas, acknowledging that the certainty of higher taxes played a role in his decision to leave the private equity giant, which he set up 15 years ago alongside Wesley Edens and Randal Nardone. As part of Kauffman's retirement, Fortress redeemed nearly $180 million in Class A shares owned by Kauffman, allowing him to avoid paying an extra 5% on his capital gains.
The capital gains rate is to rise to 20% from 15% under the "fiscal cliff" deal passed by Congress this week.
Kauffman called last year's capital-gains rates "relatively attractive," adding in an interview with The Wall Street Journal, "It's a material amount of money."
Kauffman said he still has at least $100 million invested in Fortress funds, and that taxes weren't the only issue. He's recently stepped back from some of his duties at Fortress and wishes to spend more time on his car-racing and restoration businesses.
Kauffman's retirement came together rather quickly: The first substantial discussions began just the week before the announcement last Sunday.