Wall Street, Seeking Big Tax Breaks, Sets Sights on Distressed Main Streets

Distressed America is Wall Street’s hottest new investment vehicle. Hedge funds, investment banks and money managers are trying to raise tens of billions of dollars this year for so-called opportunity funds, a creation of President Trump’s 2017 tax package meant to steer money to poor areas by offering potentially large tax breaks.Little noticed at first, the provision has unleashed a flurry of investment activity by wealthy families, some of Wall Street’s biggest investors and other investors who want to put money into projects ostensibly meant to help struggling Americans. The ranks of those starting such funds include Anthony Scaramucci, the New York hedge fund executive who served briefly as Mr. Trump’s communications director.More than 80 of the funds have sprung up since January 2018, even though the Trump administration has not finalized regulations governing them. Managers of the funds are seeking to raise huge sums of money by pitching investors on a combination of outsize returns and a feel-good role in fighting poverty.