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KKR co-CEO Henry Kravis. Photo by Drew Angerer/Getty Images.

Listed private equity firms are frustrated by what they view as artificially-low share prices, and are actively considering a structural fix: Converting from publicly-traded partnerships to C-corporations.

Why do it? Publicly-traded partnerships are off-limits for many institutional investors, and also aren't eligible for most equity indexes (like the S&P 500) or exchange-traded funds.

Why do it now? The corporate tax rate has moved closer to parity with capital gains, via the recent tax cuts. At 35%, conversion was a nonstarter.

Why not do it? There are still negative tax implications, and firms are trying to determine if they'd get enough stock price boost to offset. For example, KKR estimates that its 2017 after-tax economic net income would have been around 17% lower, calculated with the new tax rate. That means it would need to "see approximately two turns of multiple expansion, all else being equal, for a break-even stock price."

The conversion option was raised during several earnings calls in the past week — including for Apollo, Blackstone and Carlyle — but was brought into sharpest focus yesterday morning by KKR, which said it is "analyzing the potential impact of a conversion" and would likely have a final answer during its next earnings release.

Carlyle's Glenn Younkin added that converting is a "is a no-going-back kind of decision."

Go deeper

Woman who allegedly stole laptop from Pelosi's office to sell to Russia is arrested

Photo: FBI

A woman accused of breaching the Capitol and planning to sell to Russia a laptop or hard drive she allegedly stole from Speaker Nancy Pelosi's office was arrested in Pennsylvania's Middle District Monday, the Department of Justice said.

Driving the news: Riley June Williams, 22, is charged with illegally entering the Capitol as well as violent entry and disorderly conduct. She has not been charged over the laptop allegation and the case remains under investigation, per the DOJ.

Biden will reverse Trump's attempt to lift COVID-related travel restrictions

Photo: Tasos Katopodis via Getty

The incoming Biden administration will reverse President Trump's last-minute order to lift COVID-19 related travel restrictions, Jen Psaki, the incoming White House press secretary, tweeted.

Why it matters: President Trump ordered entry bans lifted for travelers from the U.K., Ireland, Brazil and much of Europe to go into effect Jan. 26, but the Biden administration will "strengthen public health measures around international travel in order to further mitigate the spread of COVID-19," Jen Psaki said. Biden will be inaugurated on Wednesday, Jan. 20 and Trump will no longer be president by the time the order is set to go into effect.

Dominion sends cease and desist letter to My Pillow CEO Mike Lindell

Photo: Stephen Maturen/Getty Images

Dominion Voting Systems on Monday sent a cease and desist letter to My Pillow CEO Mike Lindell over his spread of misinformation related to the 2020 election.

Why it matters: Trump and several of his allies have pushed false conspiracy theories about the company, leading Dominion to take legal action. It's suing pro-Trump lawyer Sidney Powell for defamation and $1.3 billion in damages, and a Dominion employee has sued Trump himself, OANN and Newsmax.