In a study that I did at the beginning of this year, I asked
over 100 family offices what their plans were for investing in opportunity
zones. The results were staggering. 17% said they were going to invest into an opportunity
zone deal, the remainder reported no or maybe.
Now at the time, the regulations were not out, so that was a huge reason
for many families to be sitting on the sideline, but now that they are out why
are these numbers still holding up?
Well, I think there are a few reasons.
The first is I don’t think there is a distinct understanding of the nuances
of opportunity zones by family offices.
I have spoken on this topic so much, or written articles or been
interviewed on shows and podcasts and I have an excellent understanding of what
these include and the benefits, but there are still nuances I don’t understand
exactly. One of the things that come up
in sales is if something is hard to understand the person you are sitting
across from won't buy. I believe this is
the case with opportunity zones. I
think there are aspects of these zones that family offices do not fully
understand and thus are not investing.
In the next blog, I will list the second reason why I believe family
offices are not investing in opportunity zones.
Harvard's Endowment commits to a target investment range into real estate between 10% to 17% for 2016
Years ago, before the downturn I was paying very close attention to the investing allocation of my Alma Maters Endowments Investing Strategy HMC (Harvard Management Company), especially in the area of real estate. I believe that not only was Harvard a great place to understand the importance of investment allocation strategies before the downturn but even more so since the downturn. In fact, investors who are looking to enhance the performance of their investment portfolios probably won’t find a better investment model than the one used by the $37.6 billion endowment for Harvard University. The entity in charge of managing the endowment, Harvard Management Company (HMC), has accrued an impressive investment track record across its 41-year history. As of fiscal year 2015, the endowment had produced an average annual return of 12.2% – 290 basis points higher than the average 9.3% return of a typical U.S. 60/40 stock and bond portfolio. The methodology behind HMC’s success i...
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