Portugal GV Fund Comparison?

Thanks, I understand that most are not, but I know some do have perspective. Appreciate the input!

Mine was done in about 2 days. I had to send originals by DHL within 15 days as I’m not in the country. My account is already funded and ready to go.

Thanks for all your informative posts on the funds! I’ve learned a lot from reading them. May I know how you were able to find out that is was possible to split the fund investment over different funds? Is there any official position taken by SEF on this now?

I was told by various people that it is possible to split the funds, so long as the fund does not have a minimum of 350,000EU. I picked the funds that I did because they appear to allow <350,000 as an investment. If they all allowed it, then it would be possible to really mix it up. But the tech venture capital funds (which are very attractive for high risk investors) seem to have a minimum of 350,000.

Maybe someone should add the minimum investment to the spreadsheet?

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Yes the more true VC funds seem to have higher minumums ( in the 250k region).

Our legal team has verbal approval from SEF and have spoken with several others who have successfully split funds, so long as the total is 350k or more.

Any fund manager should give you domicile information if you ask.

I think every lawyer’s gonna have a different take on this, much as they do about whether you can invest in multiple funds or not. I think a legal advisor is right to at least point at the risk. It doesn’t particularly concern me, but you have to do what you’re comfortable with.

@william.reichert , you think? I guess it’s phraseology. We certainly open our funds up to additional subscriptions from time to time, which is at least akin to a capital call, and we’ve given money back as well when we’ve got more capital than capacity, too. Maybe it’s different in pure VC versus hedge; I can’t speak to that. (Matt, don’t worry about that latter, I think all the MRs for these funds don’t allow for a forcible return of capital.)

There are plenty of good reasons to take on new investors and/or more capital, and plenty of bad reasons. “Capital call” has a bad connotation in that implies “hey, we really need more cash now” and that’s bad, certainly. “We’ve got strategies with more capacity and we see room to expand” is a good signal.

@mmd I would be hyper concerned about any language that requires an investor to cough up. I haven’t seen it yet though. And as long as you have that language, then they can’t insist on you coughing up more, so there’s no real concern about having to keep money around for the purpose.

I was thinking more in the latter sense of requiring investors to “cough it up” as you say. I haven’t really seen that, although then again, I usually work with funds on the investment side rather than the structuring and internal governance side, so my assessment may be off.

@laurachan12, @petermuennig - My straw poll of ~ 6? 8? lawyers on whether you can split funds returns a whole set of mixed opinions from “NO” to “SEF said yes” to “I wouldn’t try it” to “it’s not explicitly disallowed but it’s not explicitly allowed either” to “no one’s ever asked me” to “it’s just gonna depend on the SEF person you’re assigned to” - the last item being the most dangerous, and because this is Europe, it’s civil law not common law, and therefore precedent is no guarantee of legality (or such is my understanding). I have NFI what to do myself either. That said, @drl - really? there are successful applications? If I knew I could split, I’d be 100x more comfortable.

and yea, exactly. It’s a small, not terribly sophisticated market, and more pointedly they’re small funds in a small niche corner of the market. You have to do your own due diligence the hard way, by talking to them and comparing notes and seeing if what’s being said makes sense. And maybe you have a thread where other people are doing some of the same digging - but there’s limits about how much you can listen to other people too. shrug

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I first ran into a section in BlueCrow’s MR that worried me. It specifies that management has the ability to request additional capital contributions during the investment period. There is another section which conflicts saying you can’t be required to contribute more than subscribed. I’ve got a Portuguese version and am going to have a lawyer review. That was the biggest thing that jumped out to me. Some other funds had slightly “softer” language on the subject.

BlockquoteYou have to do your own due diligence the hard way, by talking to them and comparing notes and seeing if what’s being said makes sense. And maybe you have a thread where other people are doing some of the same digging - but there’s limits about how much you can listen to other people too. shrug
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Exactly. This forum is helpful because there is so much uncertainly and not much precedent for the investment fund ARI. Just the fact that you can compare multiple opinions of different lawyers is very useful but in the end, you still need to evaluate the different information coming in and make your own decision. As we have seen even here, there are multiple conflicting opinions from lawyers on the same issue. That’s not unusual in the legal world but the difference in the US is that there would often be published regulations where interested parties have the opportunity to comment on proposed legislation and ask questions and the regulatory body will attempt to clarify those question through the regulations. I don’t believe that process is prevalent in Portugal.

Unfortunately, all of this doesn’t change the fact that there is risk and anyone interested in the GV has to accept that and move forward.

I hear that several more funds will come online in the next few months due to increased demand for funds in general. This is driven by more demand from Americans and also interest from those (Chinese, Brazilian, Vietnamese, Hong Kong) who would have previously bought real estate in Lisbon now looking for other options. I don’t know that more funds will be helpful. Already it seems like there are too many funds that are undersubscribed.

No fund can force you to invest more money. And it makes no sense why they would do that. Most of them can use leverage if they have an investment that costs more than they have on hand, or they can open up for further investment - which is my read of the section you read. They are stating they can ask for more investors, not that they can force current investors to invest more.

Hi @laurachan12 as far as I know there is no position from SEF regarding this. But as long as you comply with the law they should accept it.
Cheers,
Alex

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I had asked Duarte specifically about this clause (Article 5, point 5 in the MR) by email several weeks ago and received an answer that the it was a standard clause in almost all funds’ MR, but that the fees and costs are fund costs, so investors will not be requested and are not obliged to make additional contributions. He also said something I didn’t fully understand about how that clause is there in case it was a very small fund and hadn’t got enough capital yet, it might need to ask for more capital to cover its expenses. However, if I were to invest the fund, I would certainly ask for more clarification from Duarte and from my lawyer.

The clause does feel out of place given the nature of private equity funds and other parts of the MR not requiring additional contributions. Definitely going to clarify that and any other ambiguous verbage in any of these funds. Hoping to get all the obvious questions listed before I have a lawyer review.

All–The legal company I am using is Nuno Sousa Moniz & Associados. They were part of the POF package that gets things done quickly: the banker, lawyer, and apostle were all quickly delivered up. I did not do research on any of them prior to signing up. The banker has been great. The first apostle did not respond, but Rahim found another one that is very responsive.

Yesterday, I received a contract from POF that was full of mistakes that put but myself and POF at risk of legal action/disadvantage and the form had tons of blank or missing values in it. POF agreed that it was full of mistakes, and said that it was not Moniz who wrote the contract, but someone else and that he would send it to Moniz for further review. (I am a professor and doctor, not a lawyer, by the way.) I can read Portuguese reasonably well as I am fluent in Spanish.

Jeff, as you say, these are small funds just starting out. Mistakes are to be expected. But this is an example of why I would want to purchase shares across multiple funds to spread risk. The risk isn’t just of fraud or a bad investment, there is also a risk of regulatory or other mistakes made by the funds. Again, I’m not a lawyer, but I believe that contract could have exposed both myself and POF to substantial legal risk if a client was unhappy.

I’m not sure how to respond to the revelation that multiple funds might not be accepted by the SEF for a Golden Visa. Is there a real risk that they won’t accept my purchase of shares across 3 funds???

If there is a risk that this will not be approved, then I’m back to buying property or just giving up altogether. The insanity in my country is starting to abate, and I can get permanent residency in Japan or New Zealand by simply working there for 1 year.

I have to say, this process is a bit of a mess.

I want to add a qualifier here.

Of the funds, POF has the cleanest process and their webinar was completely pro, unlike the other fund webinars I watched. The process has been easier than with the other funds and they have been the most engaged. Rahim has been amazing and he scheduled a call with the lawyers as soon as I flagged the contract. So, unlike some of the other funds, they seem to have their act together.

I’m sorry if this is a very naive question but I was wondering if a longstanding real estate fund in Portugal could be used for the Golden Visa investment. The fund I am interested in is called Imopoupança. It is from a funds company called Fundiestamo and has been around since 2010 and rated only 2 out of 7 on the risk scale by BPI bank, so it seems super stable compared to other funds in the market. As far as I can tell, it is headquartered in Portugal and investing in Portugal, so it would seem to superficially meet the requirements. I tried to email the fund company last week to ask if it was open for GV investment but have not heard back yet. Unfortunately, all of the information I could find about this fund is in Portuguese, so I was forced to rely on a very dubious combination of Google translate and half-forgotten college Spanish to read the materials. Perhaps someone here who reads Portuguese could advise further? Here are some links about the fund:
https://www.bancobpi.pt/particulares/poupar-investir/fundos-de-investimento/imopoupanca-fia https://fundiestamo.com/
https://www.jornaldenegocios.pt/mais/analises-deco/detalhe/fundos-de-investimento-imobiliario-dao-frutos
I do know of another very longstanding fund (IMGA Ações Portugal) which, according to the people at Millennium Bank, is qualified for GV investment. However, that fund is much higher risk (6 out of 7?) and appears to have been bouncing up and down like a yoyo for the past 25 years or so.

To qualify for GV, the duration period of the fund needs to be, at least 5 years.
It appears that the Fundiestamo fund would not qualify based upon this requirement.
As is discussed elsewhere in this thread, there is some risk for funds that do not explicitly state that 60% fund be invested in Portuguese companies.

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i am using Nuno Sousa Moniz & Associados services. I find them good. All invest carry risk .