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Fund Administration and Technology: Continuing the Conversation From the Novogradac Opportunity Zones Fall Conference

Novogradac’s 2019 Opportunity Zones Conference in Chicago is one of the largest OZ events in the country where fund sponsors, developers, investors, accountants, lawyers and stakeholders attend to discuss and learn how to effectively invest in qualified opportunity zone funds.

Our EVP Reid Thomas spoke about fund administration at this conference and one of the many important topics he discussed was technology.

Moderator Matt Kelley, a principal at Novogradac, asked Reid about the role technology plays in fund administration with this question:  What are you seeing being done by fund administrators from a technology perspective to provide solutions to provide the level of assistance to help manage effectively that fund?

There are two paths. One is a pure technology solution, where a fund manager could acquire technology which helps improve efficiency,” responded Reid.  “Another solution is a combination where the fund managers actually engaging a third-party organization to do fund administration that’s leveraging the technology they have built or acquired.”

The discussion at Novogradac’s 2019 Opportunity Zones Conference regarding technology was very insightful, highlighting how one of the most important decisions that a new Opportunity Zone fund manager must decide is whether they would like to purchase a pure technology play or hire experts with technology-enabled solutions.

NES Financial chose to develop a purpose-built, technology-enabled solution designed specifically for OZ funds. Our purpose-built solution has dashboards for fund managers and investors to track and report key OZ fund metrics, including the required 90% ratio of a fund’s investments into OZ property, “improvement” of a fund’s assets, an investor’s unique deferred-gain reduction over time based on investment in an OZ fund, projected social impact of a fund’s investments and more.

A technology-driven fund administration platform delivers faster processing times, from onboarding investors to generating financial statements, without adding head count or managing inhouse technology.

The big advantage to technology-enabled services from a third-party administrator is expertise.  At NES Financial, we have seasoned professionals who have expertise in tax – our General Counsel helped write significant guidance when she worked at the IRS.  In addition, our fund administration team has extensive experience from the largest fund administrator.  As a team, we have managed more than 290 funds of all sizes and administer over $20B annually for our private equity, commercial real estate, and Fortune 1000 clientele.

To learn more about Novogradac’s 2019 Conference, please visit our Twitter page for our coverage and posts from Chicago!

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