NES Financial
It is encouraging to see solutions like this coming into the space, because ultimately, for the program to achieve its objectives, it will require many service providers and solutions that embrace best practices.
SAN JOSE, Calif. (PRWEB) August 23, 2018
NES Financial announced that it has added a new, purpose-built fund administration suite to its current lineup of EB-5, 1031 exchange, and private equity solutions. The Opportunity Zone Fund Administration Suite leverages NES Financial’s award-winning eSTAC® administration technology to provide maximum security, transparency and compliance to the burgeoning Opportunity Zone Fund industry.
Opportunity Zone Funds (OZFs) are qualified private-sector investment vehicles that invest at least 90 percent of their capital into Opportunity Zones — targeted economically distressed areas across the U.S. Under rules outlined in 2017’s Tax Cuts and Jobs act, Opportunity Zone Funds offer investors lucrative tax breaks, including temporary tax deferral and partial elimination of taxes on an investor’s realized capital gains, and total elimination of taxes on all capital gains due to the appreciation of the OZF investment.
“The Opportunity Zone Fund industry is in its infancy, and its potential as both an asset class and a broad economic driver is enormous,” said Michael Halloran, NES Financial Chairman and CEO. “However, as a new and rapidly evolving market, it is also vulnerable to impropriety — intentional or otherwise. Given the levels of complexity and compliance reporting involved, we expect third-party oversight to quickly become a recognized best practice for Opportunity Zone Funds.”
The list of 8700 census tracts designated as Opportunity Zones was finalized in June, marking the official opening of business for OZFs. With the amount of unrealized capital gains sitting on U.S. books estimated in the trillions of dollars, analysts are predicting huge growth for Opportunity Zone Funds over the coming years.
The purpose of the NES Financial Opportunity Zone Fund Administration Suite is to efficiently and securely handle the middle- and back-office administration for growing funds, at scale, so that Opportunity Zone Fund managers can focus on raising capital and deploying it to underserved communities across the country. This includes handling the specialized tracking and reporting requirements of the OZ program with the highest possible degrees of fund security, investor transparency, and regulatory compliance.
And, as other emerging industry leaders have noted, Opportunity Zones’ success will likely hinge on the strength of the industry’s oversight and compliance standards — which have yet to solidify.
“The Opportunity Zones incentive has the potential to be one of the most impactful economic development tools in the country,” said Gregory Clements, CPA, a partner in Novogradac & Company LLP’s Dover, Ohio, office. “As community development professionals move into this new space, embracing best practices will be key to ensuring the Opportunity Zones incentive stimulates development and helps communities in need of investment.”
Jim Butler, founding partner at Jeffer Mangels Butler & Mitchell LLP, similarly predicts that quality third-party administration will be crucial to the industry’s success. “It is encouraging to see solutions like this coming into the space, because ultimately, for the program to achieve its objectives, it will require many service providers and solutions that embrace best practices.”
For additional information about the Opportunity Zone Fund Administration Suite, please visit NES Financial's OZ homepage.
About NES Financial
NES Financial is a Silicon Valley financial technology (FinTech) company providing technology-enabled solutions and services for the efficient back- and middle-office administration of complex financial transactions. Serving private equity, commercial real estate, and Fortune 1000 clientele, NES Financial offers industry-leading private equity fund administration, loan servicing, specialized EB-5 and Opportunity Zone Fund Administration, and 1031 tax-deferred exchange services. Our unwavering commitment to data security, operational redundancy, and compliance reporting is evidenced by 12 consecutive years of successful independent audits of our technology, processes, and financial controls. Today, NES Financial services over 190 funds, administers over $20B annually, and has worked with more than 675 EB-5 projects. For more information, visit nesfinancial.com.
About Novogradac & Company
Novogradac began operations in 1989 and has grown to more than 600 employees and partners with offices in 27 cities. Tax, audit and consulting specialty practice areas for Novogradac include affordable housing, community development, historic rehabilitation and renewable energy. For more information, visit novoco.com.
About Jeffer Mangels Butler & Mitchell LLP
For 35 years, Jeffer Mangels Butler & Mitchell LLP (JMBM) has provided clients with results — successfully resolving cases, closing deals, protecting assets, and adding value. The Firm has expertise in a wide variety of corporate and real estate transactions and financing tools, including Opportunity Zone Funds. For more information, contact Jim Butler (jbutler@jmbm.com) or Brad Cohen (bcohen@jmbm.com). See JMBM.com for more information.