Awesome, thanks! Have you confirmed this with a Portuguese attorney familiar with the process?
As far as I know, this practice has been frowned upon by the authorities. This is what I’ve heard (never had to deal with one of these situations myself).
It seems to me that investing in two or more funds can add to diversity but it can also double the risks: if you invest in 1 fund, you may be in trouble if that fund has a problem (bad management, bad investment decisions, bankruptcy of fund manager, etc.); but if you invest in 2 or more funds, you may be in trouble if any of those funds has a problem.
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By the way, if you really want to invest in more than 1 fund, I would suggest you ask your legal advisors to obtain an official position from the authorities (SEF) stating that it is acceptable. That could save you some time and money.
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Already on it with legal. I know for sure you can do it with regular RE investments (purchasing multiple properties to equal 350 or 500k) so not sure why you could not be able to with funds, so long if you total 350k.
As for risks, you can look at it any way you like. If the single fund you choose is good and makes money then great! If it is a mess then you are 100% in trouble. Yes, with multiple funds one can be problematic but it is only part of your total investment and you can pivot if need be. Multiple funds also protects you if you have trouble exiting one fund so you can get some of your money back from the other funds. This is a primary concern of mine.
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Fantastic. I am new to this- shifted from the real estate GV, too much room for money pit scenario. I would love unaffiliated lawyer and fund recs too. You are awesome to share so much knowledge.
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Larry, I wholeheartedly agree with you that a prudent investor should always diversify, especially in such dangerous area as venture funds, where he has no vote rights and will not be allowed to exit for years.
For me personally this uncertainty is the main stopper on the fund(s) route.
It would be absurd to be able to diversify in real estate and not be able to in securities market.
Hope you will share received answer (if any) with the community.
Nicholas thanks for all your posts. This has been a great thread. I was wondering how things are going with your fund search? I’m just in the beginning stages and would love any thoughts you might wish to share at this point?
Thanks
Michael
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I wonder though, even if you do get an opinion from someone at SEF, is that enough? One SEF’s opinion may not be shared by the person actually working your case, and I gather that there’s always a certain amount of discretion one way or the other.
I’ve spoken to four lawyers about it, and it’s split down the center.
One has said they have an opinion from someone at SEF and I believe are moving forward with a case. One thinks it’s possible based on their interpretation of the law. Both of these firms however are “young”, in terms of total case count - low-hundreds.
The two “senior” lawyers I’ve spoken to (many thousands of GVs processed by each, one has been doing GV since the beginning, the other I think has been doing it for a while - and they charge way more too) - one said simply “no” and the other said “it’s unclear, I wouldn’t try it”.
Is this voice-of-experience? Or stick-in-the-mud? Granted that law around this is very new so there’s little experience to be had, so maybe case-count doesn’t matter - but time spent dealing with SEF generally to know what is and isn’t likely to work does, perhaps? Of course a younger firm is more likely to be brave and go try it. Doesn’t mean they’ll win…
I would really prefer to split… diversification and all that… but given the current environment around GV as a whole, does it pay to complicate things further by trying it? Especially since once you’ve invested, if your case fails, uh, oops, then what? Unless you’re going to somehow sweet-talk the funds into a “if my case fails I want my cash back” - which seems long odds.
Hi Jeff,
We’ve managed many hundreds applications and from experience I would tell you that even if it is possibble to reach the minimum investment (350k) with multimple investments in various funds It is not advisable. This because SEF is not a very flexible and responsive authority. They prefer one single declaration from the fund stating that you completed your investment.
In order to reduce risk and increase diversification I would choose a Management Company with solid track record and a diversified fund. There are funds that invest in Real Estate (through corporate vehicles) as well as private equity middle market fund. I also know a fund investing in Portuguese blue chips.
In any case, funds usually don’t apply exit fees so you can decide to withdraw you investment in case the process don’t go through for some reason. Blue Crow for exaple buy back your share so you don’t even have to go to secondary market.
Following in case of updates. I’d love anecdotes from anyone who has decided to proceed with the investment GV route.
Magwind,
I believe your advice is sound. I have witnessed that the SEF decisions can be arbitrary in some cases and interpretations change from time to time without notice. From the US perspective, I would add that two funds also means two PFIC compliance issues instead of one.
I don’t disagree, really. I guess I’m just hoping for an answer I want to hear because there are multiple funds I’m interested in, and I’d prefer a little more diversity (and the paperwork doesn’t bother me; my tax return is a nightmare anyway, what’s a little more). And some lawyers are offering it. But do you buy the soap?
Knowing who has a solid track record is difficult enough when it’s in your country; in another country? shrug feels like throwing darts at a wall.
now all I have to do is choose a fund and a lawyer. whee. (meh.)
Hi,
By law it is allowed to have more than one fund. But it is not common. We are now investigating this route for some of our clients. Not sure if they will go thru for 2 or more funds yet. But if they do, we will orchestrate with the fund houses and the lawyer. Hope to update here on their process/ results!
I would suggest you to do a thorough research on the funds and make your decision based on the underlying assets, back up on the funds, fund managers, and so on.
We are a company that do the full solution - the investment sourcing part (real estate, fund or setting up company/ buying existing company) and the golden visa application (we have partner lawyers that works with us, but we follow your case thorough out the process).
We have 3 different fund houses that is eligible for GV, on the path to adding a 4th and 5th. We are doing our final reference checking. You can send me a private message to learn more.
We also do the bank account opening, NIF application and tax representative, tax filing and so on for you. If you may not be able to travel to Portugal due to Covid, though we might need to get lawyer involved in applying these.
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Hello,
Can you please share your fund houses!
Thank you
MR
Hello Nicholas
Have you got the help you need. I saw your thread little late so just reaching out to you. If you are still looking for help around Portugal GV please let us know. We have in-house lawyers and we can help you with investment options.
Best wishes
MR
Hi,
If you want more fund options. We just just vetted one new fund in addition to Blue Crow, which I think many of you know already. It invests in life science, health care companies. Target return of 10-15% IRR with 4-5 years holding period and the possibility to trade the units at the end of the GV at 0% capital gains tax!! Already backed by European Investment bank.
Let me know if you are interested in this.
subscription close end of April 2021 or earlier if target fund amount is reach.
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Hi Rehman,
Thank you for your interest. Before sending you the fund details. May I know which country you are based in?
Best regards,
Susana
Hi Susana
Thank you for reaching out. My country is Canada.
Thank you
Rehman
Hi Rehman,
I am from Canada as well, Toronto. Nice to meet you here.
I see that you are an immigration consultant in Canada.
I will send you the fund details.
I’d love an introduction go Sara Macias as well.
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