NES Financial

Profile

NES Financial was founded in 2005 in Silicon Valley. The company, originally named Nationwide Exchange Services Corporation, tried to set a new industry standard for Qualified intermediaries (QI) facilitated IRC 1031 exchanges. NES Financial developed a proprietary platform, eSTAC, for clients to view and administer activities from their accounts, in real-time.

NES broadened its core business into two other financial industries - trust and escrows. The company expanded into these markets, and by 2010, had outgrown its original vision, prompting a rebranding to NES Financial.

NES Financial is a third party administrator of complex escrow and fund administration transactions such as EB-5 and 1031 exchanges. Each year the company voluntarily undergoes a compliance examination of its administrative processes for SSAE 16 SOC 1 Type II certification, the same certification needed to obtain a federal bank charter and comply with Sarbanes-Oxley Section 404 requirements. In 2014, it serviced more than $85 billion in transactions.

Acquisitions

In 2005, NES Financial acquired Exchanging.com and Nationwide 1031.

In October 2006, NES Financial acquired Cole Taylor Tax Deferred Exchange, a division of Cole Taylor Bank.

In November 2008, JP Morgan Property Exchange (JPEX) from JP Morgan Chase.

Technology

NES Financial’s transaction administration services use its proprietary eSTAC technology. This cloud-based platform was designed to administer and track the entire life cycle of an account and its transactions.

eSTAC sets the controls for documentation and management of account information, to automate routine processes and secure clients’ funds. The platform combines back-end and front-end architecture, a design that integrates into existing systems.

Escrow and fund administration

The company’s escrow and fund administration services provide customizable and compliant administration of client funds. As with traditional fund administrators, NES Financial provides accounting for the fund and its participants: financial reports, investor statements, tax reports, and capital allocation reports.

EB-5

NES Financial simplifies escrow administration by helping Regional Centers and developers manage their bank and escrow needs, centralize document storage, provide virtual file sharing, and improve security, transparency, and compliance. On January 8, 2013, NES Financial announced two EB-5 escrow products for construction and capital returns.

1031 Exchanges

NES Financial helps businesses that need to sell or invest in assets and want tax breaks. The company’s qualified intermediary (QI) status, in-house expertise, and automated technologies help companies administrate 1031 exchange types, including forward, reverse, and like-kind exchange programs.

Industries

NES Financial solutions are suited for industries, including:

Aviation: NES Financial facilitates 1031 exchanges when companies need to sell and replace aircraft. This allows companies to defer taxes and reduce cash outlay on new aircraft.

Commercial Real estate: NES Financial provides sectors within the real estate industry the programs to ensure security of funds, regulatory compliance, and transparency of processes. The company provides other companies in the commercial real estate, legal, and M&A markets with the expertise, technology, and administrative resources.

Leasing: Leasing companies that exchange old equipment for new equipment, such as fleets of vehicles, aircraft, or industrial equipment, can defer taxes on capital gains and depreciation recapture with the company’s 1031 exchange program.

Partners

NES Financial creates alliances with financial institutions, law firms, business leaders, and industry associations commonly involved in the administration of escrows and 1031 exchanges.

Custodial banking partners

Financial Reform Efforts

Following the financial crisis of 2007-2008, NES Financial focused its efforts in Washington D.C. Led by CEO Michael Halloran, the company lobbied tirelessly to improved 1031 industry regulations. Despite Halloran’s nearly two years worth of efforts, the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010 did not include additional 1031 regulations.

Recognition

In 2013, NES Financial was chosen as the 2013 EB-5 Service Provider of the Year by Artisan Business Group. In 2014, NES Financial received the OutSystems Innovation Award for the company's eSTAC technology.