Opportunity Funds Raise Nearly $2.5 Billion to Date

Published by Michael Novogradac on Friday, September 20, 2019 - 12:00am

As the opportunity zone (OZ) incentive continues to gather momentum and interest, Novogradac has been tracking and compiling data on opportunity funds and their plans. In June, a post in this space provided the results of an initial survey of funds raised and related information. Since that writing, activity in the OZ community has continued and based on Novogradac research the amount of capital raised by qualified opportunity funds (QOFs) is nearly $2.5 billion.

Background

Novogradac’s Opportunity Funds Listing is a free service to potential community development funding recipients. The information listed is based on information provided to Novogradac by the listed contact person for each company. To be included in this list, please contact [email protected]. It is important to note that this listing of funds reflects a subset of all opportunity funds that have been formed and have raised, or are raising, investment capital.  Many funds have been formed, raised capital, and invested dollars in opportunity zones, for which there is no public data. In due course, these funds do report some of this information to the Internal Revenue Service (IRS), as part of annual tax filings, and in the future are expected to have more robust (IRS) reporting requirements.  Which means more comprehensive information will be available, eventually, in some form, from the IRS.

Funds Raised to Date

At the time of this writing, Novogradac is tracking 264 QOFs. In the aggregate, those funds are seeking to raise more than $63.5 billion for investment in opportunity zones. The 264 QOFs range in size as well as focus. Ten of the 264 have a capacity of $1 billion or more, and 66 percent report a fund capacity of $100 million or less. Approximately 20 percent of the 264 funds are focused within one city or metropolitan area and nearly 28 percent plan to invest nationwide.

Of the current total of 264 funds it is tracking, Novogradac has fundraising information for 112 QOFs. Those 112 funds are targeting to raise $25.8 billion and have raised approximately $2.5 billion, or 9.7 percent of their aggregate goal. Nearly 51 percent of the 112 QOFs have raised at least $3 million. The average raise is approximately $22.2 million.

By comparison, when Novogradac last measured funds raised in June, a set of 40 QOFs reported having raised $790 million. More than 60 percent of the responding funds at that time had raised at least $3 million, and of those, the average raise was more than $31.5 million.

The amount of capital raised increased in part because the data set is larger, but also because of the June 28 deadline related to the OZ’s 180-day reinvestment requirement for 2018 partnership capital gains.

The funds Novogradac is tracking run the gamut of geographical footprints from local, to regional, to state and multi-state, to national. The targeted investment areas for the funds as a whole range from mixed-use, industrial, office, retail, multifamily, student housing and senior housing to hospitality, renewable energy, disaster relief and professional sports. 

 

The information contained on this page is for informational purposes only and does not constitute an offer to sell or solicitation of an offer to buy securities. Novogradac does not provide investment advice and the information on this page is not to be construed as a recommendation to engage in any specific transaction. Readers are urged to consult with their own professional advisors if they are considering investing in a QOF.