Opportunity Zone Magazine Opportunity Zone Magazine Volume 1, Issue 1 | Page 23

INVESTING IN PRIVATE EQUITY UNDER THE OPPORTUNITY ZONES PROGRAM
Investing in
Private Equity
Under the
Opportunity Zones
Program
By Richard Shamos & Paul Marino
What to keep in mind when it comes to creating a fund and what is required
for transactions and operations of businesses in Opportunity Zones.
A
s the federal government’s opportunity zone program has
taken form, the path forward for private equity investors
that wish to utilize the favorable tax regime has likewise
become more certain. The deployment of private equity strategies
in qualified opportunity zones (QOZ) may present significant
benefits to investors in such strategies. However, investments in
qualified opportunity funds (QOFs) entail a number of cascading
requirements and potential trip-wires, which managers and
investors alike should carefully consider when structuring a
fund and deploying capital. Notably, QOFs employing a private
equity strategy must invest their capital in a company that
qualifies as a qualified opportunity zone business (QOZB), which
entails meeting certain locational and operational requirements
under the statute. Let’s examine these requirements, as well as
their implications for a private equity investment structure in
Opportunity Zones.
As is the case with most investments, deals involving companies
located in Opportunity Zones start with the identification of
an investment opportunity. When investors realize that the
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