Anthony Scaramucci Slashes Opportunity Fund Goal By 90%, Citing Lack Of Interest

Skybridge Capital's Anthony Scaramucci

Before the regulations surrounding opportunity zones have even been finalized, at least one high-profile investor is ready to declare them a failure.

Short-lived White House Communications Director Anthony Scaramucci has dramatically reduced the capital-raising goal for the qualified opportunity fund co-managed by his firm, SkyBridge Capital, CoStar reports. The fund, a joint venture with Westport Capital Partners, is now targeting $300M after initially setting a goal of $3B.

Though fund managers and other investment intermediaries hailed the opportunity zone legislation as a potentially transformative new way to inject capital into the marketplace, those holding the purse strings have been largely unmoved, Scaramucci said at a NAIOP event in Fort Lauderdale, Florida.

“Everybody in that industry misplaced and outsized what we thought we could achieve,” Scaramucci said at the event, according to CoStar. “It turns out the pricing of the tax benefit was just not commercially attractive enough for people to do what Treasury thought that they were going to do."

It isn't just Scaramucci who has been disappointed by investors when it comes to opportunity zone funds: Across 294 of the 387 QOFs that CoStar tracks, only $2.2B has been raised out of a $29B combined goal. Due to the delay in receiving finalized guidance from the Treasury Department, some might still be waiting on the sidelines, even as the first deadline for maximized capital gains tax benefits approaches.

Without everything set in stone, many advisers and lenders are counseling equity investors not to commit to the long-term hold that an opportunity zone investment requires, Scaramucci said.

But even if the end of the year sees a mad rush of investment, it will still have been a miscalculation on the part of Treasury, Secretary of Housing and Urban Development Ben Carson and some tax attorneys, all of whom believed that the second round of regulations, released in April, would be enough to open the floodgates.

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