Bluecrow and NEST are still remained on the list 
Yes, I am also going to skip it as there is no information online. Stable Core did send me a presentation about them but it does not contain any information on the past work
Why is that? Perhaps you could explain the advantages of it over the many other funds that are available. I find it interesting that Mr. Lakhani is the only fund representative trying to promote his fund on this forum. You are the only other person in this group besides him who is suggesting looking into it, so I would be very curious to understand why you think it is worth investigating compared to the other options.
Thanks
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Hi
I had a conversation with him, request you also to do so to understand further,also other than Mercan haven’t spoken with anyone else
Jeff
Let me elaborate a bit more on point #4. After speaking with them I believe the answer is different. It’s not so much about ability to get a loan, although your point is valid. They would typically go out to private markets and try to raise capital, but in private markets the investors want personal guarantees, covenants, etc which put more risk on the managers of the venture.
Please share the name of the fund
I guess that’s not really different than what they said to me. I was focused on the bank loan but local equity often wants the same covenants etc. I’m surprised that the tax benefits would accrue to non-GV investors though.
Do you have any thoughts on Indico or Shilling? I know very little about these types of funds.
Thanks!
Peter
Yes, I was on the verge of taking the leap in the Portugal Opportunities Fund, but am having second thoughts. I am VERY unsophisticated, so please take everything I write with a grain of salt. They have 5 investors at the moment and claim to have 12 non-binding contracts signed. They just started in September.
On the first conversation and from the PPT presentation, I was led to believe that they have 3 investments. In fact, they only have one. That one investment is 50% owned by the bank at a 2% loan so the bank has a vested interest. The other 2 projects on the dock include a nursing home and dorms, so it should be a diverse portfolio. They also told me that they have 500,000 EU in the fund for “skin in the game.” The property they have is a 70% completed residential luxury development that was repossessed 5 years ago.
While I am very unsophisticated, I do have friends that have been in M&A in big banks at high levels and have contacts in Portugal. They told me that POF only has one holding in the fund. That was not a good way to learn that my info was wrong, but it is easy to see how it was a miscommunication. We are talking by WhatsApp and I’m scribbling notes. My friends recommended going with a larger fund to spread out risk.
On subsequent conversations, I was told that they have more than 500,000EU of their own money in the fund, as they are selling assets in Canada.
So, why would I be interested in them? Well, first, it is a new fund but with Lakhani has experience in other real estate investments. Since they are a new fund, they are getting in the market at a good time. Second, they have no entrance fee, a tiny management fee, and no hurdle fee. Finally, unlike a lot of the other services, they have been walking me through the whole process, from opening the bank account to connecting me to apostle services. Of course, this stuff is easy to do on your own, and all of the funds recommend legal, apostle, etc. services.
But to be honest, I’m a bit paralyzed by this whole process. A lot of funds have been mentioned here and users are sharing information between each other, but I would love a more detailed analysis of people’s experiences. I would also like to know what the other variables are. What if they don’t hit their target? The money is handed back, but we lose the visa?
It would be great to see a more detailed article on this topic. If it is not allowed to actually provide details on funds, then at least I would like to have a general sense of whether the available approved funds should be good actors, what happens if they miss their target for fundraising, all that kind of stuff. Buying a property comes with a lot of risk and a lot of taxes and hassles, so I really want to go this route. It’s just very confusing to me.
As a closing thought to this rambling post, if experienced investors could identify themselves and discuss the risks, that would be great.
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@tkrunning: I recollect you talking about Monarque earlier this year and there was some scepticism as seemingly many investors had not spoken to them. Any update you have received on them since? I have to see if I should probably speak with them too before taking a call on the fund/s I want to invest in? Thanks
P.S. Others as well - please feel free to leave your thoughts.
If you are not at least somewhat trepiditious, you are sheep to be shorn.
You’re investing into a type of product (venture capital) that most people have zero familiarity with, that isn’t liquid and has little transparency (sorry Rahim but you know it’s true - we’re talking unlisted investments, the public-disclosure requirements are pretty light), in a different country with a small marketplace whose processes are different and with which you have little familiarity, and if you’re a US tax resident, with potentially significant tax complications. You can do your own due diligence of the funds, but that presumes you even know the right questions to ask, and it’s a lot of work. I’ve only done it with a handful of funds simply because I don’t have infinite time, and I’ve thrown out most of the funds because I don’t believe in their basic investment thesis anyway. I’m guessing I have more experience with these types of products than most people here and it still scares the crap out of me.
You are stuck trusting someone - either you are trusting what the fund is telling you, or you are trusting some entity like Global Citizen Solutions or Belion or whoever Susan’s firm is; it’s nice that these one-stop-shops are vetting the funds for you, but how do you really know if they have your best interest in mind? That said, I imagine a number of the third parties mean well, and a lot of people are probably better off trusting the third party than trying to guess it all themselves. I dunno. These are personal choices about which I’m certainly ill-advised to say much.
I think if you read back all the way through this topic (it goes back a long ways - you have to keep scrolling up to convince the browser to keep going back), you’ll see a lot of what you’d like to know at least in terms of generalities - certainly all that any of us know.
I imagine many of these funds at least mean well; even the ones with the high fees, may mean well - we are talking about brand new funds in a brand new market space, and a lot of initial price discovery is taking place. That said, I guarantee a few are rip-offs. They won’t be outright frauds, but you’ll get some sort of indifferent management and high fees.
@petermuennig, please see the cutout from the management regulations. There are two ways to close the fund, either reach 35 million or reach the end of the period. If our target is not reached and our time is up and we’ve only raised 30 million, we simply close the fund and cannot raise more. The funds are deployed in assets in parallel to subscription and has nothing to do whatsoever with Golden Visa eligibility. The minimum term of the fund is 6 years and then POF liquidates and provides a return of investment to all investors equally. I am happy to explain this point more if you like?
I have a question for the folks more savvy on these types of funds. One, and I’m sure all or most, have an additional capital contribution clause during investment period. What have your experiences been with this and how much could we possibly expect? I’ve yet to have an attorney review the documents yet, but in another place it says participants will not be required to contribute more capital than what they’ve subscribed.
I’m just concerned about throwing good money after bad if these additional contributions become excessive. Also, given exchange rates, I’d likely have to keep an unknown amount of money in a retail bank to possibly cover these expenses. I’d already planned on keeping a balance in a local account, but this seems to be a bit of a wildcard.
Thoughts?
Thank you @william.reichert for pointing out the fees here, I-m seeing a recurrent theme with really high fees with no real justification on the works that money buys, plus when you dig in a little bit more there are hidden charges everywhere, and in some cases, the economic model just doesn’t make any sense. It would be nice to understand what these fees are used for or at least a smaller fee that is justifiable by administrative costs.
Edit: I have removed the funds I am investing in.
My process toward the GV went something like this:
I have a known and trusted friend from college who is an investor in Portugal and also a realtor with REMAX. We found a qualified rural property for 280K that would almost certainly generate a good ROI in AirBNB revenue. However, after doing the math, it didn’t work out. 280K plus 8% in taxes/stamp + 30K of which would be subject to VAT + 10,000 in furniture that would get trashed by guests + renovation + taxes on AirBNB income. It was a money losing investment.
Next up was looking at a parcel of land. Only subject to 6.8% + stamp tax and then tax on resale. That was an easy option, as there is no income. You just put the money in and you don’t think about it until it is time to sell. Of course, you lose money on taxes and on inflation, but not as much as if I bought the other property. And since I plan to move to Europe, maybe I would develop it one day. Who knows? Maybe it would even appreciate. The problem there is that everyone from the city is buying up the countryside because of COVID. So, there is nothing good on the market, and certainly no distressed sales.
Then the opportunity funds came into my sphere of awareness. Since I’m not an investor, I did not see this as a good option, but spoke with a few funds anyway.
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Peter,
Wow. That is impressive. You have only been a member on this site for 1 day and already read every post twice. I am curious how long you have been researching the GV to get the point of making a decision. It took me a lot longer. Perhaps I am just too indecisive.
Best of luck.
It took me longer but I came to similar conclusions at @petermuennig, though I did not make the exact same investments. Our investments have now been made and are preparing our final documents for the initial visa application - (only delayed because of some delays in my state to getting back apostilled documents, now going on a 7 week wait to get some of them back). Fingers crossed!
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Thank you for the detailed explanation @jb4422!
I am also considering Rock, after going through so many posts and reading as much information as I can but given that I have significant experience in the capital markets the idea of balanced leverage especially in markets like Europe where interest rates are so low makes sense and mathematically speaking skyrockets the returns on investment.
Having said that it does raise the question on the quality of asset that banks are willing to take the risk on and from my understanding banks will not provide financing to derelict buildings that may take a very long time for licensing (thanks to Lisbon Municipality Services) and rehabilitation in Lisbon, I’m afraid that’s why they don’t go for it. It would be nice if Rock chooses buildings in their portfolio where banks share the risk with investors to show confidence.
Not very long, Michael. I have been considering a GV for over a year, but I only started to take it seriously when I heard that Brussels was considering a ban on all GV programs.
Whether or not a ban comes to pass, changes are also happening in Portugal for nearly certain, but we don’t know what they look like yet. So, I decided I had better move quickly. It could be that these funds will cost 500,000 to qualify by the end of the year. Who knows?
I’m not sure that there is much more to be learned than what has already been shared here. My M&A friends say that they have to lean on local connections rather than simply do research on terminals.
What I have heard from the local connections is that most of the funds discussed here are likely to be well intentioned. (E.G. not Ponzi schemes.) Not much else to go off of so I’m not sure what else I might learn of I wait.
The one benefit that you might get from waiting is that rural properties might start to open up a little bit after Covid-19 has come to pass.
It’s hard to name a country that isn’t looking like a failed state right now. And the countries that are ok don’t want anyone coming in. I want a hedge in the form of a passport.
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