No, but there are ways to get around it.
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Can a QOF capitalize another QOF?
I am starting a QOF but was wondering if another QOF can capitalize my deals if it is attractive to their investors?
Answers
No, a QOF can't fund another QOF. A QOF can invest in another QOF's QOZBs, however.
No. A QOF can not invest in another QOF.
No. A QOF must invest in Qualified Opportunity Zone property or businesses. Another QOF can invest alongside your QOF though.
QOFs are not allowed to invest in other QOFs.
A QOF cannot invest in another QOF, however, multiple QOFs can invest in the same QOZB. In most substantial OZ developments, it makes sense to have both a project-specific QOF that can accept recently-realized capital gains from investors, as well as a QOZB that is structured to accept investment from both your project-specific QOF as well as other outside QOFs. Most of my clients choose to build in their fee and promote structures at the QOZB level so that those terms apply equitably across the several QOFs that invest in the deal.
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