Are they changing the term of the fund, or the actual lock-in period? The two are not necessarily related.
(Iām not an Iberis investor so I canāt comment in any detail.)
The actual lock-in period. The proposed change is adding 2 more years.
The rationale they sent out is not very convincing for the reasons you lay out.
Also, they havenāt explained, for example, why other options would not meet the same goals - either exercising one of the available optional extensions OR for those worried about the life of the fund, adding a third optional extension which would extend the life of the fund to 14 years, if required.
What is on the table to be voted on at this stage (item #4) should fail. If they put either of the above options on the ballot, I think I would support them passing - even now with the GV program uncertainties.
I had a good chat with Joao this morning. I agree with @Rivahbrewās assessment that Greytech II is a well managed fund; I continue to believe that their partners are some of the most professional, competent, and transparent out there. Iberis isnāt trying to do anything here without our knowledge or consent.
The proposal to extend the term of the fund came from GV investorsā requests worried about being termed out due to GV delays. They claim to be agnostic about 8 vs 10 years and were simply trying to accommodate existing participants in the fund.
That said, I will be voting NO on the extension of the fund life. Given the unlikely but non-zero probability that all of our GVs may evaporate into thin air with new legislation, I donāt want to tie up my money any longer than I have to. I would be more comfortable supporting this once we have more confidence, hopefully a few years down the road, that the government will indeed follow through on their end of the bargain AND we have a better sense of processing timelines with the transition of SEF to APMA. Thereās just too much uncertainty right now.
FWIW I am also not in favor of the proposed increase in investment period from 4 to 5 years, which to me should be assessed independent of fund life. As GV investors we donāt have the luxury that others do of forking over our money when investments are made. They have 100% of our committed capital and need to put it to work. Their annual report states they plan to be fully invested by 2024; Iām not sure why we need to give them another year.
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This is private equity. There is a LOT of legwork that goes into these things, even when there are a lot of opportunities for investment - and this is Portugal, where there really arenāt.
(In fact I tend to fear that there is too much money now chasing too few decent investment opportunities at this point.)
In the current environment where prices are rising rapidly and thereās a ton of money running around, it can be really difficult to find value plays where you are not overpaying for the asset in question. Of course this is philosophy, too. Do you go invest in whateverās going up, on the assumption of momentum, buy higher sell higher? Or do you wait for investments to come to your value/risk point?
Maybe they overpromised on how deep their deal chain/flow is, or maybe it dried up on them, or valuations went through the ceiling because other funds were willing to pay more or firms found other sources of capital and they werenāt willing to chase and overpay.
Is it better to sit in cash, or overpay just for the sake of ābeing investedā? Buffet vs, oh, I dunno, Andressen Horowitz. You get the idea.
There isnāt a ārightā answer here and Iām not trying to say there is one, I just want to provide a bit of backdrop color to help you have a conversation with them.
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I had a meeting with one of the partner 2 months ago. For a couple deals not finally materialised it was exactly due to what Jeff mentioned: deal terms asked during final nego were not acceptable to the Fund as determined by fund manager. I definitely will not support to invest at any term just for the sake of investing all capital in a rushed deadline.
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FWIW Joao didnāt seem too concerned about whether or not they got the extra year. He seems to indicate they were proposing a 5th investment year to go along with the 2 year fund extension, not because they were concerned about deal flow.
If they are not concerned about deal flow and are indifferent to whether they have the 5th investment year, then I am even less persuaded to accept this proposed extension.
I will be at the meeting to hear them out myself. But based on everything I have seen from them so far and useful input from others in this post, I will still be voting AGAINST Item #4 at the meeting.
The draft GV law was published yesterday - luckily, nothing in the proposed law requires any reconsideration on how the fund participants need to vote on the 18th. Everything as proposed is good for the existing GV investors. Not so much for the companies making money from GV investments as future investors and their Euros are going to dry up once the new law is passed. I am sure they will be lobbying their politicians hard to push through changes in Parliamentary discussions to give them a lifeline.
See you all at the meeting on Tuesday.
If this is the case, extension of the fund tenor is essential. Anyone has an insight from your lawyer?
Your GV fund has no bearing on your citizenship application. The fund holding requirement for ARI/GV purposes is a minimum of 5 years.
Most funds can be extended for one year, for 2 times, if the majority of the fund holder agrees.
If a ARI residence permit (as we call it today) is required during citizenship application, fund tenor extension will be essential, as this fund has only 5+ year left and most investors do not have residence permits on hand, as of today.
The Greytech II fund (as it stands today) runs through till 3rd Jan 2029 - thatās more than enough time. If anyone needs longer then they have available 2 x 2-year extensions that will take them through till 2033.
Yes, this was my thought too. The fund closed in Dec 2021 so there shouldnāt be any 2022 applicants in Greytech II. Assuming stragglers would have the FF: timeline:
Dec 2021 submission
Jun 2023 pre-approval
Dec 2023 biometrics
Dec 2024 full approval
Dec 2029 5-yr eligibility for citizenship
June 2031 citizenship
Which would still leave us with 1.5 yrs buffer until Jan 4 2033 under existing management regulations.
In this case I would rather vote Yes for extension of investment period in LOA, and vote for No later in the optional 2 year extension. This way give fund manager more certainty to source and negotiate deals.
This is quite a relaxed (worst-case?) timeline - I am sure most people will do better overall.
Another thing to keep in mind is that:
- The last GV renewal will happen about 4 years after full-approval. So thatās about 2028 using your timeline. This is the last time you could be asked to prove your qualifying ARI investment. The investment is not required for any citizenship application. And
- Based on an original investment date of 2021 (or even 2022 if a late entrant), all of us would have held the Greytech II fund for the minimum five-years by 2028. The fund doesnāt allow participant exists prior to 2029 anyways.
For automatic online GV renewals these days no supporting documents are being requested. Of course this can change in the future, in which case see point #1 & 2.
I am very comfortable voting AGAINST the extension knowing there are 2 x 2-year optional extensions available should the timeline turn out to be slower than expected.
I am not sure how you arrived at this conclusion. The fund managers are saying exactly the opposite themselves:
This is off topic. I am an investor in Greytech II.
My question. Has anybody sought including their spouse, or other, as a beneficiary to their investment in the fund yet?
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Side bar here. Has anyone figured out the tax implications ( in Portugal ) for the returns that Greytech II made last year. I am not getting any clear answers from my lawyers ?
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I filed income through my Portuguese lawyers for Portugal. Although, at this point they have not notified me if any tax will be due. I think the filing deadline was end of March. They said there are potential penalties for not claiming income.