Opend Ended Fund Options

Finances
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1

Hello Nomad Family

I am short listing my investments into the following:

  1. Optimize
  2. Sixty Degrees
  3. 3Comma

the reason is i want to high liquidity fund with easy exist strategy in the case i want to withdraw or my application was rejected.

any advice or suggestion if these are good investments and how they rank?any thought is appreciated as i was only wanted to focus on two investments not three.

thank you

Lil

2

My wife and I are GV investors. Before making our investment I did deep researh into more than 30 funds, including 6 open-ended funds.

Something to know is that you are not really buying Portuguese stocks, you are buying units in a private equity fund. Most of these funds are ticking the regulatory box, which means they are investing 60% in Portugal and the balance elsewhere in order to diversify.

As the mode of entry is PE and not direct stock purchase, there is a lot of actual fine-print when it comes to exit.

I personally interviewed fund managers from 3 of these open ended funds, and all of them confirmed that liquidation will take between 1 to 6 months, and they will charge exit fees. Adding up all fees (management fee, exit fees etc) it just ate into whatever notional appreciation we expected. Combined with the fact that exit is not an instant process, this was a major deterrent to us.

In the end we finally invested in a corporate debt fund that guaranteed to pay us 8% per year (after all fees). This was a safer, guaranteed return option which made sense to us as the income is tax-free. I received the first 4% within 6 months as promised. This fund also gave us the option to exit at the end of year 3 and year 5, at our discretion. No hidden terms and conditions governing exit.

Our takeaway from all this was:

  1. Open-ended funds are not really as open or flexible as they claim
  2. They are frequently more expensive than traditional closed-funds
  3. By nature, do not offer a fixed-income guarantee.
  4. The returns on capital may not be as good as you expect (especially if you are used to traditional US equities and ETFs).
  5. The stock market in Portugal just isn’t comparable.
  6. Many of these open-ended funds are actually holding 40% in US equity positions. You will just end up duplicating your own existing portfolio positions at a much higher cost.

In summary, it is definitely worth exploring other types of funds.We found a few traditional closed-ended PE funds actually offered a higher upside, and after long months of searching and research, our efforts were finally rewarded. Wishing you good luck on your journey and hope you find what you’re looking for.

1 Like
3

Thank you so much for this comprehensive response. I’m currently in a closed-end real estate fund and am investigating other options. Your experience is really helpful.

4

The funds you cite are all overpriced (in terms of expense ratios), but are otherwise fine. Optimize assures me I can have my funds returned to me in a week, so that’s not bad. No exit fee.

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5

Per my knowledge, funds related to real estate may not be eligible for the golden visa. The criteria is that they should be invested in other sectors of the economy.

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6

Sounds like good advice. Can I ask what specific corporate debt you selected?

7

You can check CapitalGreen. In 2024, my wife and I invested in their previous fund ValorGreen PEEIF2 where they offered me 8% p.a coupon. The use Quadrantis Capital at the back end for administration and compliance. I do not know the coupon rate they are offering in their current debt funds that are still open to new investors. I recommend that you reach out directly to one of them to get more up to date information (as my information is more than a year old by this point). In case you are unable to find them, let me know I will share contacts of the person who has been looking after us and responds to all our queries.