Monarch Private Capital, a tax equity investment firm, has launched three opportunity zone funds that target market rate investments.
Opportunity zone funds are a new investment vehicle created as a result of the Tax Cuts and Jobs Act of 2017 to encourage long-term investments in distressed communities that need developments to jump-start their economies.
Monarch has created, operated and managed a number of tax credit funds over the past 13 years that have included investments in recently designated opportunity zones. Since 2005, the company said that it has invested in hundreds of projects and delivered more than $1 billion in taxpayer investment in more than 25 states.
“The launch of these [opportunity zone funds] is in response to the demand we have seen for quality investments from developers that have had previous success in economically challenged environments,” said Alice Nolen, director of sales and special projects for Monarch Private Capital. “We’re excited to offer what we think are compelling opportunities with experienced developers in underserved communities where all of us can have a positive impact.”
Opportunity zone funds enable investors to defer taxes on recent capital gains and, if requirements are met, they can reduce their tax payment up to 15 percent. The current program necessitates the majority of investments to be made by December 31, 2019 and held for at least seven years to meet the program end date of 2026. Investors can potentially eliminate capital gains taxes on the appreciation of their opportunity zone investments subject to a 10-year hold period.
“Now that the Treasury has given us adequate guidance around the tax code, it is time to take advantage of this opportunity before the seven-year tax benefit expires,” said Billy Huger, managing director of Monarch Private Capital Advisors. “While the benefits of this program are an incredible incentive for investors to allocate capital to underserved communities, they can also make a meaningful impact by increasing the after-tax returns of the investments.”
Headquartered in Atlanta, Monarch Private Capital tax equity investor providing capital solutions for federal renewable energy, state film/entertainment, state and federal historic rehabilitation, and state and federal affordable housing. The company has relationships with institutional and individual investors, developers, and lenders that participate in these types of federal and state programs. MPC currently has a portfolio of over $425 million of tax credits.