With over 27 years of global private equity and investment banking experience, Jose A. Torres returns to Puerto Rico to bring innovation to the alternative assets and private equity industry.
INNOVATION IN ALTERNATIVE ASSETS
Monllor Capital Partners LLC (“MCP”) was founded in 2018 by Jose A. Torres, as a minority-owned alternative asset management and advisory firm based in Puerto Rico. MCP’s mission is to make and facilitate tax advantaged private equity investments in Puerto Rico. By utilizing federal tax incentives like Qualified Opportunity Zones (“QOZs”), as established by the Tax Cuts and Jobs Act of 2017 (as further defined in the Internal Revenue Code, Section 1400Z-1) and local tax incentives under Puerto Rico’s Act 60 of 2019 (the “PR Incentives Code”), MCP looks to maximize after tax returns to investors. MCP is also focused on impact investing and committed to following Environmental, Social, and Governance (“ESG”) guidelines.
To achieve its mission, MCP launched the Puerto Rico Opportunity Zone Fund, LP (“PROZ”) in 2021, as a taxed-advantaged ESG focused private equity fund. PROZ is investing in renewable energy, sustainable businesses, and infrastructure in QOZs throughout Puerto Rico. As a Qualified Opportunity Fund (“QOF”), PROZ will provide incremental tax benefits to investors with eligible capital gains. During 2021, the Fund made its first two investments in www.sunbeatenergy.com and www.fusionfarms.ag
THE POTENTIAL BENEFITS OF QUALIFIED OPPORTUNITY ZONE INVESTING
The Tax Cuts and Jobs Act of 2017 created Qualified Opportunity Zones (“QOZs”) to provide tax benefits to investors who re-invest capital gains via a QOF. Investors investing eligible capital gains may benefit from:
- Deferral of capital gain taxes until the sooner of the investment is sold or December 31, 2026.
- 10% step up in basis after 5 years, if investment made before 12/31/2021
- No capital gain taxes on investment held for at least 10 years
Puerto Rico represent a unique investment opportunity to QOF’s since more than 95% of Puerto Rico is within a QOZ.
Puerto Rico is a commonwealth of the United States with 3.1 million U.S citizens and a $100 billion in GDP. In 2017, Puerto Rico was hit with back-to-back hurricanes that caused:
- Over 3,000 deaths
- Over 11 months without electricity for some of the population
- Over $100 billion in physical damage
- Over 200,000 residents to migrate from Puerto Rico
Although Puerto Rico expects to receive over $100 billion in federal aid for the 2017 hurricanes, 2019 earthquakes, and Covid-19 stimulus, Puerto Rico and its residents will need private investment to rebuild its infrastructure and economy. Puerto Rico passed Act 17 of 2019 requiring 100% renewable energy by 2050. Currently, Puerto Rico generates less than 3% of its electricity from renewable energy. To achieve the legally mandated targets, Puerto Rico will need over $10 billion of investment in renewable energy alone. Puerto Rico also has a unique tax incentive program with the PR incentives Code that provide for generous tax benefits for investors and companies alike. For additional information visit: https://www.ddec.pr.gov/en/incentives
Jose A. Torres brings over 27 years of global private equity and investment banking experience to Puerto Rico. Prior to founding MCP, Mr. Torres worked for 13 years at Ares Management and Energy Investors PROZ in San Francisco, CA, where he led the office for the last 4 years. As a partner of the energy and infrastructure private equity group, Mr. Torres led a team responsible for deal origination, due diligence, structuring, execution, and fundraising. Prior to Ares Management, Mr. Torres held various positions at CoBank in Colorado, Société Generale in New York, and ING Barings in New York, Chile, and Amsterdam. During his career, Mr. Torres has been involved in over $30 billion of private equity and investment banking transactions. Mr. Torres holds a BA in Economics from Colorado College and an International MBA from the American Graduate School of International Management (Thunderbird).