Legendary hedge fund manager Leon Cooperman predicted that the coronavirus crisis will “likely” change capitalism forever and that taxes will need to be raised soon.
“When the government is called upon to protect you on the downside, they have every right to regulate you on the upside,” Cooperman told CNBC.
“So capitalism is changed,” the chairman and CEO of the Omega Family Office said, explaining that the country is shifting to the left and that taxes will have to go up regardless of who wins the presidential election in November.
“Quickly if Biden wins, slowly if Trump wins, but taxes have to go up. So things like carried interest, capital gains taxes, the ability to roll over real estate sales tax-free, all that stuff is going to have to be eliminated. For the good, by the way,” the billionaire said.
In October, Cooperman told Politico that while he believes in progressive taxation.
Cooperman is not a prolific political donor, and he has mostly given to Republicans, Bloomberg explained.
In 2016, he supported the presidential campaigns of Jeb Bush and Marco Rubio. He also gave $1,000 to Hillary Clinton that January, but her campaign refunded the donation the following month, Federal Election Commission records show.
Cooperman also said late last year that declining rates are the main reason that leveraged buyouts have generated high exit multiples in the last decade. Private equity deals have also benefited from a growing economy that may be losing steam, while competition among buyout firms is on the rise, said the billionaire, who bootstrapped his way from the South Bronx to become one of the deans of the hedge fund industry.
Later, he further elaborated on his comments, saying that while the industry isn’t an actual scam, the high fees and lengthy lock-ups don’t appeal to him.
The Bronx, New York native founded Omega in 1991 after 25 years at Goldman Sachs Group Inc. The fund faced a tough patch when the Securities and Exchange Commission accused Cooperman and the firm of insider trading relating to Atlas Pipeline Partners in 2010. The firm settled in May 2017. After the settlement, Cooperman lambasted U.S. regulators as “abusive,” saying he would have won at trial but would have faced far higher legal costs, Bloomberg reported.
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