Qualified Opportunity Zone Funds

Internal Tax-Focused Strategies

Qualified Opportunity Zone Funds

Real Estate Qualified Opportunity Zone (QOZ) funds invest in ground-up development and substantial redevelopment projects within federally designated Opportunity Zones. These strategies typically focus on multifamily, mixed-use, and industrial assets in neighborhoods positioned for long-term revitalization, seeking to create value through active development rather than passive ownership.

QOZ investments provide a structural blend of real estate returns with significant tax benefits. These vehicles allow for the deferral of recognized capital gains and provide a step-up in basis after a five-year hold. After a 10-year hold, the structure is designed to potentially eliminate federal capital gains tax on the appreciation of the QOZ investment. This structure can materially enhance after-tax compounding potential relative to traditional taxable real estate allocations.

The OZ 2.0 legislation has formalized the program’s long-term framework, utilizing a rolling five-year deferral period and introducing a 10% basis step-up (with an increased 30% step-up for certain designated rural zones). While OZ 2.0 features refined zone eligibility and expanded reporting requirements, it preserves the core strategic benefit: the potential for a permanent, tax-free exit on the appreciation of the investment after a 10-year holding period.

Select Third-Party Managers

Bridge Investment Group

CIM

Clarion Partners

Cresset

GTIS Partners

Prospect Ridge

RXR

Manager Disclosure: The names displayed above represent third-party entities used for illustrative purposes only to describe the firm’s historical or current asset allocation. Their inclusion does not imply an endorsement or affiliation between Minnow Pond Capital and the respective companies. Minnow Pond Capital is a passive investor in certain referenced funds and receives no compensation for their mention, nor does their inclusion constitute a recommendation to the public.

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