USG Realty Capital and OZI Group have partnered to launch a multi-asset opportunity zone fund. The fund is unique in that it is investor-drive with a focus on asset management, rather than a developer-directed fund, as most opportunity zone funds are. The innovative structure comes with a wealth of benefits for investors looking to gain exposure to opportunity zone investment, along with all of the tax perks.
“Ours is an asset management driven platform versus a developer driven platform. Most opportunity zone investing platforms have developers with projects they are trying to fund,” Greg Genovese, founder & CEO of USG Realty Capital, tells GlobeSt.com. “Conversely, our platform employs a best-in-class project due diligence filter with our own proprietary protocols in place where candidate projects and potential development partners are extensively reviewed and only if they meet all strict criteria are the projects offered to investors.”
As a result, the projects in the fund undergo a rigorous vetting process. “We start with the idea that a development project must fit within our protocols as asset managers,” says Genovese. “We have a great number of development partners now and all have not only embraced this concept, but have seen the benefits of partnering with us at the project level, which in turn allows them to concentrate on the project development only, while we focus on the fund equity raising, compliance, and oversight of the project.”
This isn’t to say that the fund doesn’t work closely with developers—it does. But the fund’s primary role is to support investors. “It’s about being a collegial partner with our development partners, while also being squarely on the side of investors as their advocate,” adds Genovese. “We work well with our development partners at the project level, but our primary role is asset manager for the fund, itself. We believe that investors are better served with that structure.”
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The unique structure has already garnered tremendous interest. According to Genovese, investors attention has been phenomenal. “The idea of greater oversight, the elimination of conflicts of interest, and allowing investors to choose as much project diversification or concentration as they desire, has generated even more interest than we anticipated,” says Genovese. “We are truly honoring the spirit and intent of the opportunity zone initiative by also focusing on creating a positive social impact in each of our project communities, as each project also has a social impact study, with those studies continuing throughout the life of the program.”
For that reason, the fund is leveraging public-private partnerships. “Investors can see, on an accretive basis, how their investment is helping the community, which is the major purpose of the opportunity zone initiative in the first place.”