insights
I stumbled into private funds tax over a decade ago, when the partners at my Big 4 firm moved me from a UK corporate tax manager role. At the time, I had no idea how rapidly the industry would grow—from $3.1 trillion in assets under management in 2008 to over $12 trillion today. Now, as a head-hunter and consultant, I help fund managers design and staff their finance, tax and legal teams. Reflecting on industry trends, here’s what early-career professionals need to know about the evolving private funds tax landscape.
Private funds tax work is split between the Big Four (who offer scale and global reach), and mid-tier challengers boutique firms (who offer a more responsive and often cheaper service). If you’re in the early stages of your career, here are some trends that you should keep in mind:
Market-leading firms increasingly rely on AI for research and global virtual teams for client deliverables, requiring fewer client-facing professionals. If your firm isn’t innovating, its competitiveness may decline. If your firm is innovating, consider how technology impacts your development— are you on track to lead AI enabled engagements?
Many advisory firms are taking third-party funding or merging for scale. This supports tech investment and rewards the current generation of partners but alters career dynamics. For traditional partnerships, the key as always is to have a clear path to equity partnership. For capital-backed firms, near term pay should compensate for long term profit leakage to investors. In addition you need to be aware of how much of your comp is tied to an exit event.
A strong industry network, including specialised head-hunters, is essential for navigating these changes and gathering insights to guide your career.
In-house tax professionals face fundamentally different responsibilities from their practice counterparts. They must translate advice into commercial recommendations, manage budgets, and assess when to escalate risks. Key advantages include better pay in the short-to-medium term and leaner teams where tax expertise is highly valued. However, few in-house roles can match the long-term financial rewards of partnership in practice.
For alternative fund managers, tax remains a critical risk area. The full outsourcing tax functions is rarely sustainable, as businesses need someone to “own” the tax processes. Success depends on:
When transitioning in-house, timing and fit are vital.
Move too early, and you may end up performing low-value tasks with little scope for development. Move too late, and you risk being outpaced by peers with in-house experience.
Most successful transitions happen between Senior Manager and junior Director levels.