The Opportunity Zones program has not been without controversy and debate. Despite public sparring over whether the program is achieving its intended purpose, the new Opportunity Zones in 2022: Perception vs. Reality report, published by JTC Americas in partnership with OpportunityDb, shows the program is indeed achieving its aim; investors are allocating capital to OZ funds, in large part to invest towards socially-conscious outcomes.
Nearly 70% of existing and emerging OZ investors consider the program’s incentives worthy of shareholders’ trust, regardless of the program’s novelty. “The research shows that the Opportunity Zone program inspires investment in underserved communities that would otherwise be overlooked,” said Reid Thomas, chief revenue officer and managing director of JTC Americas, the largest provider of specialty fund administration solutions for OZs. “In the face of extreme social and economic challenges over the past couple of years, Opportunity Zones continue to demonstrate tremendous resilience and impact—spurred on by both the program’s incentives and investors’ increasing focus on social impact.”
While statistics point to an uptick in deal volume, respondents aren’t fully connecting OZs and impact investing. OZ funds are inherently designed to behave differently than traditional asset classes, with community leaders and stakeholders partnering together. What’s more, impact investing, at its core, offers measurable social impact alongside financial returns, yet there’s a disconnect between fund managers and investors about the measurable impact of the program.
“Fund managers need to be more front-footed when it comes to educating investors about the positive social impacts that Opportunity Zone investments offer, from an impact measurement and marketing perspective,” said Thomas. “After all, Opportunity Zones are impact investments. The more investors understand this, the more capital can be raised and the more likely it is that OZs can reach their full promise.”
OZs have grown almost twice as fast as competing traditional funds, but the program’s potential still remains relatively untapped. The data collected illustrates a prolific and effective program with a future that’s still emerging.
“Opportunity Zones are at the crossroads of impact investing and tax-advantaged investment, which can economically revitalize some of the poorest areas of the United States with new real estate and business development,” said Jimmy Atkinson, founder of OpportunityDb, a platform providing tools, education, and analysis for current and potential OZ investors. “This report helps outline the current momentum of the program and how it can continue to improve.”
The full research report is available for free download. Click here to download the report.
About JTC Americas
JTC Americas is the North American division of JTC, a worldwide leader in financial administration with over 1,200 employees across 26 jurisdictions and a 30-year track record in Private Equity, Fund of Funds, Alternatives, Commercial Real Estate, Debt Funds, and much more. JTC is a publicly listed, global professional services business with deep expertise in fund, corporate and private client services. JTC Americas works with JTC’s institutional and private clients to provide boutique service with a global reach, allowing US-based clients to expand overseas and international clients to enter US markets. JTC Americas is the industry leader in Specialty Financial Administration, providing bespoke services for markets characterized by high administrative and regulatory complexity, elevated transaction security needs, and challenging compliance requirements. This includes tax-advantaged investments (1031 Exchange, Delaware Statutory Trust), Impact & ESG (EB-5, Opportunity Zones) and alternative investments in the US and abroad (AIFM, ManCo, Fund of Funds). By offering its specialized technology-based solutions to the greater market and combining its boutique feel with JTC’s global reach, JTC Americas can provide an unprecedented level of support and scalability for clients of all sizes. To learn more, visit www.jtcamericas.com.
OpportunityDb (The Opportunity Zones Database) was conceived with the goal of providing world-class tools, education, analysis, and advice to help high net worth individuals, family offices, financial advisors, real estate developers, tax professionals, business owners, and many more navigate the ins and outs of the opportunity zones program’s tax benefits. And specifically, how they can create positive social impact in under-invested areas. To learn more, visit www.OpportunityDb.com.