Opportunity Fund Administration Solution

Opportunity Fund Administration Solution 2018-09-20T06:10:23+00:00

First-of-its-kind. Purpose-built.
Opportunity Zone Fund Administration.

A Specialized Solution From a Special Kind Of Administrator

NES Financial has combined its expertise in administering complex tax-deferred investments and government-regulated investment programs, such as the EB-5 immigrant investor program and 1031 tax-deferred exchanges, with its technology-enabled, institutional-quality private equity fund administration services to create the first-of-its-kind purpose-built Opportunity Zone Fund Administration Solution.

Tax Deferral Meets Investment Opportunity and Economic Growth

The Tax Cuts and Jobs Act of 2017 (P.L. 115-97) established the Opportunity Zone Program, which provides powerful incentives for investors to reinvest capital gains into opportunity zones — targeted economically distressed areas across the U.S.

Investors must invest through qualified Opportunity Zone Funds, which opens up enormous potential for those looking to raise and deploy capital at attractive rates to acquire or improve business properties within the qualified zones.

However, since this alternative asset class is new, and regulatory guidance is still a work in progress, Opportunity Zone Funds demand rigorous oversight from specialized third-party administration – as part of industry best practices. This is exactly what our Opportunity Zone Fund Administration Solution delivers.

Key Benefits of a Purpose-Built
Opportunity Zone Fund Administration Solution

Ensures fund success by minimizing compliance and operational risk
A configurable fund administration solution that can address today’s and tomorrow’s OZ fund compliance requirements, while delivering institutional-quality accounting, reporting and document management performance

Raises fund marketability by increasing transparency and investor confidence
An independent third-party fund administration solution that provides investors greater visibility into OZ fund performance and investment information through a secure, always available, web-based portal

Lowers fund operating costs with a next-generation fund administration platform
An innovative technology-enabled solution that delivers faster processing times, from onboarding investors to generating financial statements, without adding expensive head count, or software and systems

Delivers outstanding support from a dedicated client services team
With over twenty-five years of experience providing industry-leading solutions to specialized financial transactions, our team offers an unsurpassed level of customer service to Opportunity Zone Fund managers and their investors

Key Features

Fund Level Tracking and Reporting

  • Setup of subscription and/or operating account capital
  • Track properties and businesses to OZ census track
  • Report on 90% ratio of OZ fund’s investment in OZ property
  • Collect evidence of OZ assets owned or leased by OZ businesses
  • Record/Collect appropriate expenditures and jobs reported of underlying property or business for economic impact reporting
  • Track basis value of property to conform to ≥ 100% improvement over 30 months for the Substantial Improvement test
  • Bi-Annual calculations of OZ percentages for IRS reporting purposes

Investor Level Tracking and Reporting

  • Track book and tax bases for investments in the OZ fund
  • Track date of investments in the OZ fund
  • Report on new tax basis calculation for being invested in the fund
    • 5-year increase basis by an additional 10%
    • 7-year increase basis by an additional 5%
  • Calculate adjusted basis on 12/31/2026 based upon years held

Fund Administration Services

Back Office

  • Record details of all purchases, sales, distributions, transfers and exchanges of underlying investments
  • Price portfolio in accordance with the OZ fund’s confidential explanatory memorandum
  • Provide quarterly reconciliation of investment activity, positions and market value
  • Calculate asset management fees, accrue for third party fees, and provide quarterly final NAV reporting
  • Prepare quarterly balance sheets, income statements, & capital account statements to fulfill reporting requirements
  • Prepare quarterly final economic distributions by investor
  • Maintain accounting books and records for the OZ fund including capital accounts
  • Assist auditors with annual audit, preparing financial statements and highlights

Investor Services

  • Transfer Agency—Process subscriptions/capital calls, redemptions, distributions, transfers and exchanges
  • Provide supplemental anti-money laundering (“AML”)
  • Prepare contract notes to investors confirming their transaction details
  • Provide capital activity report detailing subscriptions, redemptions, transfer, exchanges, interest/principal payments, and interest re-investment into and out of the fund
  • Maintain partner and shareholder registries for the OZ fund
  • Prepare investor statements and maintain reporting in the Investor Portal

Treasury Services

  • Reconcile the OZ fund’s bank accounts on a weekly and monthly basis
  • Review and record cash movements for Investor distributions/interest payments
  • Review and record cash movement to facilitate payments of third-party expense

Want to Learn More About Our Services?

If you’re looking for more information about our OZ Fund Admin Solution, please visit our OZ Resource Center. Or, call 1-800-339-1031 to chat with our representatives today.