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Parallaxes Capital Management (“Parallaxes”) is an alternative asset manager and, since 2017, has raised four funds dedicated to Tax Receivable Agreements (“TRAs”). As the market leader in monetizing TRAs, Parallaxes is dedicated to increasing the visibility and transparency of TRAs which remain an often overlooked and misunderstood asset class. In the vein of creating greater visibility into the TRA ecosystem, Parallaxes is pleased to highlight a notable development in the market as DreamWorks Animation, Inc. (“DreamWorks”) previously terminated its TRA.
Comcast Corporation (“Comcast”) disclosed that after having acquired DreamWorks, it settled the DreamWorks TRA with an aggregate cash payment of $146 million. The DreamWorks TRA was entered into with an affiliate of Paul Allen (the “TRA Entity”) as DreamWorks benefited from increases to the tax basis of its assets as a result of transactions with affiliates of the TRA Entity. The DreamWorks TRA had provided for the payment of 85% of the cash tax savings realized from such tax basis increases, subject to repayment if such savings were not available to DreamWorks.
Parallaxes views TRAs, including the DreamWorks TRA, as a valuable tool to reduce certain moral hazard problems and informational asymmetry inherent in a company’s public offering. TRAs help ensure that pre-IPO owners are economically aligned with new public shareholders and incentivize pre-IPO owners to pursue an IPO structure that provides the company with ongoing tax benefits. Parallaxes anticipates enhanced awareness and understanding of TRAs will drive increased market adoption.
Parallaxes Capital Management (“Parallaxes”) is the premier investment firm focused exclusively on monetizing Tax Receivable Agreements (“TRAs”). Parallaxes offers private equity sponsors, co-investors and management team members solutions to achieve liquidity, diversification and optionality from their TRAs. Parallaxes was founded in 2017 and is comprised of experienced investment professionals from leading private equity and growth equity firms. To learn more, please visit www.plxcap.com
