As part of an ongoing series of profiles of our Medallion Partners, we recently had the chance to speak with EB-5 economist and industry veteran Kevin Wright about his work, emerging markets, and proposed reforms to EB-5. After a decade of independent operation, Kevin’s company merged into Baker Tilly in 2017. Kevin Wright is an EB-5 economist and consultant with Baker Tilly.
Read Kevin’s answers to our five interview questions.
1. Kevin Wright, thanks for speaking with us. Could you tell us a bit about your career and history in EB-5?
I’ve been in EB-5 since 2006. I’m what’s known as an EB-5 economist. The company that I started, Wright Johnson, created around 200 Regional Centers — so about one out of every four that exists today. We went on to author about 800 economic studies, and somewhere around 1000 business plans for EB-5 projects.
That company merged into Baker Tilly in 2017, so in addition to creating Regional Centers, structuring business plans, and authoring job creation reports, now we have expanded and offer global Source of Funds (SOF) consulting and Broker Dealer compliance and investor sourcing. Baker Tilly is the only Broker Dealer in the EB-5 space that’s of an “institutional” size, that I am aware of. We’re in 141 countries; we have 750 offices, 30,000 employees, and $3 billion in global revenue. That enables us to do a lot of new things, such as source-of-funds work in underserved markets, where agents typically don’t have the bandwidth or local/language knowledge to perform proper source-of-funds analysis for investors and their attorneys.
And then there’s the travel — nowadays, I travel and talk about EB-5 about 25 days a month. I’ve spoken about the program in more than 20 countries.
2. What advice do you have for those new to the EB-5 industry, who are looking to break in?
First, I’d say the wild west days of small, individual boutique projects have gone away. Successful projects tend to be done by developers who are more of an institutional grade, or who have very strong backgrounds. That’s much more important than it ever used to be.
And then, really, to not make the mistake of reading the internet and going to China, because China has slowed down dramatically, and the people who are over there are ingrained. With the announcement of 15 years of retrogression, the number of investors from China has dropped by 90%.
But now is the time — there is a whole new world out there of emerging markets. I find it interesting going around the world to different countries and seeing the success people are having — for example, the top two or three Regional Centers that I’ve encountered selling projects and doing very well in Brazil are not in the top Regional Centers that you would ever have thought of, coming out of the last ten years.
3. What countries in particular do you think we’ll see a surge from in the coming years?
If you want to be a pioneer somewhere, you’re going to Brazil or you’re going to India. Those are the two wide-open markets where everything is new, and there are large numbers of people. Anybody can make it there.
4. What is your opinion of the proposed reforms to the EB-5 program
I don’t think anybody really understands what’s going on with the legislation — or, put another way: everybody knows exactly what’s going to happen with legislation, and everyone is an expert, but the problem is that none of them agree with each other. In the end, we saw that EB-5 legislation failed again in 2018 and will likely be pushed into 2019 before another attempt at changing the legislation occurs.
The one thing everyone will agree on? They need to increase the number of visas. I’m not very hopeful that something like that will happen; maybe we’ll have a chance with the big push, with DACA, the Wall, and overall immigration, the big stir-up going on — maybe, just maybe — if we’re going to get rid of visa lotteries and chain migration, you’ve got to fill those spots with something. And just doubling the number of visas in EB-5 is not very much, relatively speaking, but it would make a big difference for everybody. Do that, and overnight, China’s back open again. There are also lawsuits moving forward to count only the investors towards the quota, and not their derivatives, but that is more of a Band-Aid than a permanent solution.
It’s also been a very long time coming that we actually have real regulations and real oversight in this industry. Everybody agrees that’s a great idea. Being a Broker Dealer, now, that’s one of the things that’s pounded in our heads over and over again. Look at all the new regulations being proposed; they’re basically aligned with the rules that Broker Dealers already have to follow. Same thing with registered investment advisors, and others. Right now, a lot of Regional Centers resist working with Broker Dealers, because people don’t want to go through all the extra cost and effort to do it in the correct way.
But it’s not going to be too long before it’s mandatory, and that’s a good thing. So, my advice is to put the procedures in place now. Be ahead of the curve.
5. Could you tell us about your history and experience working with NES Financial?
NES has been great. I’ve been the issuer of several projects, and I always use NES Financial as the escrow agent. EB-5 is becoming much more institutionalized now, and dealing with the true industry leaders, who very much specialize in things, and are very good at them, becomes important. That’s why we merged into Baker Tilly, which is a much larger entity — for that global platform. That’s the way the world is going. NES is simply the biggest and best. There’s no one close to that. And at this point in the evolution of the industry, those are the kind of people you want to have on your team.
For more information about Kevin Wright and Baker Tilly, please visit their website: bakertillyeb5.com
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