The House Reconciliation Bill currently in negotiations in Congress contains an alarming proposal to limit the investment choices available in Individual Retirement Plans (IRAs), preventing investors from holding privately held companies in designated IRA accounts. If passed, the impact of this would be felt by both investors and entrepreneurs: investors would be forced to divest of private equity and private real estate within their IRA accounts by the end of 2023, and entrepreneurs would lose a significant pool of investment dollars and source of funding. We believe the proposal could have an outsized impact particularly on women- and minority-owned companies.

Arnerich Massena has reached out to Oregon legislators to offer our thoughts on this proposal and the detrimental effect it would have on:

• Investors who wish to diversify their retirement assets with private equity and real estate investments, particularly as available public equity becomes narrower and public asset classes grow more closely correlated.
• Private companies that rely on IRA investor funding, many of them women- and minority-owned small businesses.
• People who are served by small private companies that receive funding from IRA investors; in particular, we draw lawmakers’ attention to the examples of Zero Mass Water, which has provided drinking water to residents of the Warm Springs Reservation, and Vapotherm, which provides front-line respiratory therapy for COVID patients.
• Asset managers whose investment products are held in IRA accounts, many of whom are local companies and employers.
• Professional service firms such as Arnerich Massena that have worked to craft their clients’ portfolios using the broadest opportunities available, and which have established successful partnerships with private equity companies.

We believe the proposed legislation could have profound and long-term adverse effects, not the least of which is to potentially force investors to sell private equity investments on the secondary markets in order to avoid forfeiting the benefits of the IRA. Please take a moment to read Arnerich Massena’s attached letter, and feel free to contact your Congressional representatives directly to offer your comments on the proposed legislation.

Find contact information for your Senators at https://www.senate.gov/senators/senators-contact.htm

Find your Representatives at https://www.house.gov/representatives/find-your-representative