The 'Opportunity zone funds - What sponsors need to know' special report comprises two separate articles listed below, these can be read individually or as a sequence.
In 2017, US Congress established the Federal Opportunity Zones Program, which was in many ways a stroke of genius. This Program provides investors tax relief while at the same time gives a serious capital injection to deprived and under-served communities across the country. US Secretary of the Treasury Steven Mnuchin expects opportunity zones to attract USD100 billion in investment.
1. A legal perspective – The way one thinks about a QOF, operationally, will largely depend on the Fund’s underlying strategy. A real estate fund strategy will differ from a private equity strategy, and there will be structural differences as to how these are run.
A private equity sponsor, for example, would likely manage investments through an intermediate corporate or partnership entity, which will itself qualify as an opportunity zone business.