I watched the Rock Capital webinar too. When they had technical difficulties for the first 5 minutes and then admitted it was their first webinar, I basically discounted most of what I was hearing after that. With every business operating virtual for so many months now, how could a reputable firm be launching a fund with their first ever webinar.
Hope you all find the answers you seek. Iāll follow along, but too conservative to jump in yet. Thanks for all of your legwork and willingness to share data.
Hi Kenneth, Those are words of wisdom. Had a chance a couple of days ago, to see an interview with the real character model for the film The Wolf of Wall Street. The scams of so-called investing, penny stocks, how a glib tongue, knack to mesmerize folks will literally rob anyone blind, legally. I suggest readers here enjoy these clips, hunt for more. Keep your wits about you.Behind the Scenes with the Real Wolf of Wall Street - YouTube
Interviewed by Noh Kagan of AppSumo. Ask yourself about their ethics, morals, what happens to āyourā money. Jordan Belfort. Giveāem yer money! Noah Kagan | OkDork, Donāt Do What You Love | The Wolf's Den #78 - YouTube
Duncan
Yikes, only 2m and 500k of their own capital is worrying! But hopefully that is because are early in the fundraising process. I will ask. I have noticed, however, that most funds are raising much less than I would have expected (e.g. between 5 and 10 million). Even Nest, which seems to be the most successful, I think only raised about 25m. Itās not necessarily a concern in and of itself, but I just want to make sure that they have enough capital to execute their business plan.
Bill, itās very interesting that you mention Rock Capital and Lince, as I just spoke yesterday with people from the Vintage Fund, which is also managed by Lince. This one is fully subscribed now, at about 28M.
Itās a real-estate investment in a single Hotel in Lisbon, Le Vintage. Itās already operating. The developers run the hotel through their hotel managerment sister company. Itās basically owning a share in the hotel. The fund will run for 6 to 10 years, to allow the GV investors (which from my understanding represent the large majority) to vote at year 6 to dissolve the fund. But redemption is not immediate. And this I had to ask twice to get a clear answer (this type of info seems too often to lack in the presentation decks of portuguese funds). Once the investors vote for disslution, they will put the Hotel on the market and find a buyer! Itās not bad thing per se, but the investor must be aware of that and accept that the funds are in a hard lock-up and not easy to liquidate.
All in all, I like this Fund. The investors, developers and managers are all aligned. The evaluation of the asset managersā performance is straightforward. Itās an easy to understand business model. And this Fund, they practically have no debt in their capital structure.
Thanks very much for this Philippe. This is very helpful. Also good to hear that they raised 28m for the Vintage Fund. While I would not want to invest in a single asset fund (too risky in my view as any number of issues could arise with the asset), Iām glad that they were able to raise a decent amount. Also, I see that the subscription deadline for the Rock fund is more than a year away, so presumably they have just started fundraising (which would explain why so little has been raised so far).
Will provide an update after my call with Rock tomorrow.
Thanks Bill,
I was also on the Rock fund call yesterday and had similar concerns, but also liked their approach of looking for opportunities in the upper middle class domestic real-estate market. Instead of the likely inflated high-tier luxury market. Iāve been following this thread, but quiet because Iām not looking to invest in a GV fund until next year. I appreciate everyoneās valuable insight.
-Kent
Hi Bill, would appreciate if you could send me the presentation as well. For the Rock Capital webinar, who was the presenter? Was it Artur Saraiva? He is the guy who is also a partner in GCS, an immigration consultant I am talking to on the GV. He is definitely knowledgeable and so far, given the firm is not large like the La Vida of Henleys of the world, they have been patient with information.
Look forward to hear your thoughts once you have had your call with them.
Just got off of the call with Rock Capital. I remain very interested.
One thing to know is that this is their first fund. Some people would consider this a red flag, and not without reason, although I am more concerned with their experience in the Lisbon real estate market. I think they have genuine experience here, although I strongly suggested to them that they need to provide more information on this (there is almost nothing in their presentation). I told them that it would be helpful if they could share with me (and with other investors) a short presentation with their CVs and the projects that theyāve been involved in. They said they would do that and I will share it as soon as I receive it.
The fact that they did not include this upfront is I think reflective of their inexperience in running a fund. But they say that they have completed five projects in Lisbon and have had a return of at least 80% on each of them!!! I think this explains why they are willing to take a very low management fee (0.5%) and a high hurdle rate (30%), although I think the fund economics are also due to the fact that they do not have as much experience in running a fund, and so need to offer more attractive economics to entice investors (or just donāt know better!).
They did provide me a website of one of their projects (which is showcased in their brochure): EdifĆcios JB. They said that they purchased this building for less than EUR 700k!! Their strategy is to purchase similar buildings, which seems like a smart idea. They are not looking at central Lisbon, where prices are inflated, but the outskirts, where valuations are much more affordable.
As for capital raised, they say that they have received quite a bit of interest lately, and expect to have at least EUR 10m raised by the end of the year. If they are looking at similar projects to the one noted above, this is plenty to run a decent fund.
I will probably not invest with them right away, and will continue to look around, but they are probably at the top of my list right now. I am also going to try to have a call with Lince Capital (the fund manager) to learn a bit more about them.
Yes, it was Artur who was speaking most (including on my call today). I think this is merely because Pedroās English is not as good, although Pedro is the one with the technical expertise (25+ years as an architect in Lisbon). Interesting that Artur is with an immigration consulting (he said that he has been in banking, but likely dealing with private wealth issues). That shows how he got his idea for the fund of courseā¦
Very happy to share the presentation with you. Can you send me a message with your email?
Hi everyone! I just wanted to thank you all for putting this together and doing so much collaborative research. Iām still in the super early planning phase (wonāt be investing in a GV fund until late 2021/early 2022) but all of the information shared here has been super helpful for me. I will definitely continue to follow this thread and truly appreciate everyoneās valuable insights here!
-Krish
Hi everyone, I am joining this thread a bit late. Appreciate everyone sharing their research. Like many, I like this approach to the golden visa as there are definite efficiencies, but agree there are some real concerns with manager quality and risk profile. In general, I feel like funds that need to rely on channels like golden visa participants to raise capital are going to be relatively inexperienced, but that may just be the reality. Has anyone seen options that offer a more diversified strategy with less emphasis on real estate? Like several others, I am concerned that real estate may be a lagging asset class given Covid, especially in areas where many of the funds are focused, like commercial real estate or residential developments in urban settings. Finally, is there any sort of secondary market that provide liquidity options should you want to exit early (though I understand this has implications under the visa program)? Apologies in advance if some of these questions have been covered by earlier posts. Thank you.
There are some funds that are more traditional VC funds, but indeed, the majority of them focus on real estate (which I donāt think in and of itself is necessarily bad ā perhaps less return, but not as risky as investing in startups). I believe a couple are mentioned in earlier posts.
As for a secondary market, that is definitely not something I would count on!
I agree that commercial real-estate returns might lag a little over the next few years. And I agree that many of these funds seem too opportunistic. As I wrote earlier, this reminds me of the Caribbeanās hotel craze from a few years ago. New CIP programs, new developers, new projects, and terrible results, with often nothing being even built.
That said, just like Bill, I am warming up to the RE focused funds. From the one I have reviewed, even if the fund does not perform or flat-out fails, you have an ownership share of the underlying assets. And in general, since some of these funds are also un-levered, this really reduces the risk profile.
I saw that someone posted about a fund thatās active in renewable energy called Quadrantis. Has anyone come across any other funds that are active with renewable energy or energy efficiency projects? I have worked with solar and wind projects for a number of years and this would be an easier asset class for me to diligence. Portugal has set some aggressive renewable targets and I believe this will be a solid growth sector. Thanks, Peter
Joining in late, thanks everyone for some great content here, very helpful. I will be speaking to Rock capital guys soon and will reply with my thoughts and findings.