Considerations on redeployment and the successes of Vietnamization
Redeployment Webinar v4 - stern.nyu.edu · – Visibility at the Investor, Fund and Investment...
Transcript of Redeployment Webinar v4 - stern.nyu.edu · – Visibility at the Investor, Fund and Investment...
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NES Financial
Opportunity Zone Trends
April 30, 2019
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Investment Programs with Little Regulation Are Open to Abuses
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© NES Financial 2019 All Rights Reserved 3
Now is the Time to Establish Best Practices
• Risk Mitigation
– Third-party oversight and controls
• Transparency
– Visibility at the Investor, Fund and Investment Levels
• Compliance
– IRS, Treasury, State and Local requirements
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What Makes Opportunity Funds Unique – A Comparison
OZ Investment and OZ Fund Social Purpose Investor Motivation:
• Tax Saving + ROI Worst Case Investor Risk
• 100% Loss of Investment + Tax Liability Fund Holds Investment Capital
• Up to 30 months Unique Regulations & Reporting Requirements
• Financial• Tax• Social
Regulations Continue to Evolve• Even State by State
Traditional PE Investment & Fund No Social Purpose Required Investor Motivation:
• ROI Only Worst Case Investor Risk
• 100% Loss of Investment Fund “Calls” for Investment Capital
No Unique Regulations & Reporting Requirements• Financial
Regulations are Fully Established
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© NES Financial 2019 All Rights Reserved 5
Purpose-built approach is optimal
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Investor Motives
© NES Financial 2019All Rights Reserved 6
0% 10% 20% 30% 40% 50% 60%
Tax Incentives
Return on Investment
Social Impact
Which of the following best describes your primary motivation as an Opportunity Zone investor?
2018 2019
Source: NES Financial Database
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OZ Entity Type
© NES Financial 2019All Rights Reserved 7
89.05%
7.81%3.13%
78.95%
15.79%
5.26%
LIMITED PARTNER C-CORP REIT
Overall Emerging
Source: NES Financial Database
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Project Location
© NES Financial 2019All Rights Reserved 8
71.56%
28.44%
Single State Multi-State
73.08%
26.92%
Single State Multi-State
Overall Emerging
Source: NES Financial Database
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© NES Financial 2019All Rights Reserved 9
18.49%
12.33%8.22% 7.53% 6.85%
46.58%
NY FL CA NJ GA OTHER
26.67%
16.67%
10.00%6.67% 6.67%
33.33%
NY FL CA NJ PR OTHER
Fund Manager Location
Overall Emerging
Source: NES Financial Database
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© NES Financial 2019All Rights Reserved 10
Project Location
Source: NES Financial Database
14.42%9.62% 9.62% 7.69% 6.73%
51.92%
FL NJ NY CA MO OTHER
22.73%
9.09% 9.09% 9.09% 9.09%
40.91%
FL CA WA DC NY OTHER
Overall Emerging
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Fund Structure – Asset
Source: NES Financial Database 11© NES Financial 2019 All Rights Reserved
61.79%
38.21%
Single Asset Multi-Asset
56.00%
44.00%
Single Asset Multi-Asset
Overall Emerging
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Asset Owner
Source: NES Financial Database 12© NES Financial 2019 All Rights Reserved
34.62%
65.38%
No Yes
37.90%
62.10%
No Yes
Overall Emerging
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Public-Private Partnership
Source: NES Financial Database 13© NES Financial 2019 All Rights Reserved
84.43%
15.57%
No Yes
64.00%
36.00%
No Yes
Overall Emerging
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Fund Type Distribution
© NES Financial 2019All Rights Reserved 14Source: NES Financial Database
11.54%
26.92%
61.54%
Business Both Real Estate
12.20%
13.01%
74.80%
Business Both Real Estate
Overall Emerging
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Primary Asset Type
15© NES Financial 2019 All Rights Reserved
56.00%
13.60%
5.60%
4.80%
4.00%
Housing
Mixed Use/Office
Manufacturing
Hotels
Public Works
Overall
53.85%
11.54%
7.69%
7.69%
7.69%
Housing
Public Works
Energy
Manufacturing
Mixed Use/Office
Emerging
Source: NES Financial Database
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40.36%
53.64%
4.00% 2.00%
Housing Subcategories
© NES Financial 2019All Rights Reserved 16
70.00%
24.00%
4.00% 2.00%
Overall Emerging
Source: NES Financial Database
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Target Fund Size Distribution
© NES Financial 2019All Rights Reserved 17
22.6%
12.6%
22.0% 20.8%
4.4%
13.8%
3.8%
9.4%
21.9%
34.4%
21.9%
3.1% 3.1%6.3%
0-10MM 10MM-25MM 25MM-50MM 50MM-100MM 100MM-200MM 200MM-500MM 500MM+
Overall Emerging
Source: NES Financial Database