Qualified Opportunity Funds Surpass $40 Billion Equity Mark
Qualified opportunity funds tracked by Novogradac – a certified public accounting, valuation, and consulting organization – surpassed the $40 billion mark, reaching $40.09 billion in reported equity raised through Dec. 31, 2024. This was an increase of $555.6 million during the fourth quarter of 2024.
At the end of the year, Novogradac was tracking 2,033 QOFs, of which 1,611 reported a specific equity amount raised. Actual investment is likely approximately three times that of Novogradac-tracked QOFs. Los Angeles and California remain the city and state with the most planned investment by Novogradac-tracked QOFs, according to a recent blog post by Novogradac.
QOF managers are reporting a renewed enthusiasm in the opportunity zone incentive. With Republicans controlling both houses of Congress and the White House, there is optimism that the opportunity zone incentive – slated to expire at the end of 2026 – will be extended or made permanent in the Internal Revenue Code during new tax legislation. See what Alts Wire had to say following the November 2024 election.
Further, a letter from the Novogradac Opportunity Zones Working Group to then-incoming President Donald Trump’s transition team and the nominee for deputy secretary for the U.S. Department of the Treasury called for the administration to consider regulatory and legislative efforts to enhance and reinforce the opportunity zones incentive.
QOF managers expect that an opportunity zone extension or permanency will drive significant investment back into the incentive and many have reported making plans for new QOFs in anticipation.
Total equity reported raised in 2024 was $2.47 billion, the smallest annual figure since Novogradac began tracking such data. In 2023, the annual total was $3.53 billion and the 2022 amount was a record $9.68 billion.
California continues to be the leading state for planned investment by QOFs, with an increase of $922.2 million from the end of 2023. California-planned investment constituted 37.2% of the total equity increase in 2024. It now has close to $5 billion in planned QOF investment.
Arizona has the second-most planned QOF investment, and New York, Texas, and Ohio round out the top five. Alabama made the biggest move on the list of states, moving from 25th at the end of 2023 to 20th at the end of 2024.
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