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stock index, and there was $1.1 trillion bet on Russell U.S. indexes overall, according to the company. The bigger universe of investors would likely boost the trading multiples of the firms’ stocks. It’s unclear how big the economic benefit of increased ownership would be, so the question is whether it would make up for the higher taxes. “There’s no way to say how much multiple expansion you could get by converting,” said Gerald O’ Hara, who follows private equity firms for Jefferies Group. “That’s the question here that I think these firms are wrestling with.” Tax Complexity One of the main reasons the funds have stayed away from private equity managers is tax complexity. Investors in typical stocks receive a Form 1099, a straightforward document that shows interest and dividends on investments at the end of each year. Owners of publicly traded private equity firms’ stock get the Schedule K-1 instead. The K-1 shows their share of the partnership’s interest, which determines how much the income is taxed. It’s a headache, O’Hara said. Plus, firms can be inconsistent on the time of year they send out the forms, and the process of plugging in the numbers on a Schedule K-1 isn’t as simple as it is for other kinds of income. So asset managers, which offer options for many 401(k) investors, avoid buying shares of private equity firms. On the campaign trail last year, President Donald Trump said he wasn’t a fan of Wall Street “paper pushers” like hedge fund managers. He pledged to raise the tax rate on carried interest. The new tax law keeps it unchanged for investments held at least three years. Hamilton Lane Proponents of conversion to corporations point to Hamilton Lane Inc., an alternative-investment manager and pension-fund consultant that’s a corporation and not a publicly traded partnership. The $1.9 billion company, which went public earlier this year, is now included in dozens of S&P, Russell and WisdomTree Investments Inc. indexes. Hamilton Lane shares have about doubled since the initial public offering. Ares Management LP, created by former Apollo executives, is the most likely of its peers to make the jump, according to analysts at Keefe Bruyette & Woods Inc. Much of its revenue comes from management fees, so becoming a corporation would hurt its after-tax earnings relatively little. Bill Mendel of Mendel Communications, a spokesman for Ares, said the firm is studying the situation. Apollo spokesman Charles Zehren of Rubenstein Associates declined to comment. When Black spoke to the Goldman Sachs conference, he said he was certain of one thing: None of the big publicly traded partnerships wanted to be first to undergo conversion. “If somebody does go first and their stock doesn’t move up, HOUSE_OVERSIGHT_023565