Hi all,
The 2 stock market funds mentioned sound interesting. For US investors, is anyone aware of whether or not they provide a PFIC statement? Even if not it could still count for the Mark to Market approach I assume.
Thanks.
B2D2
I’m afraid I don’t see “Dunas Capital” or “Nest” in the list? I do see “Next”?
Forgive me I’m new to this.
Thanks,
Curtis
Nest is now Next by Lynx Asset Capital
Dunas can be found at https://www.goldenbridgefund.com/
I did invest with Nest, but honestly it has been difficult to understand their plan due to the pandemic.
Next is managed by Opylon Krea, correct?
What do you mean by understanding their plan? I understood it was a pure play in high street retail real estate. I assume their play now is to buy distressed retail and lease it short term until tourism returns and then enter into long term leases at higher rates.
Can you say whether they are performing well or not so far?
Nest is managed by Lynx Asset Mnagers and the Fund advisor is Optylon Krea.
Due to Covid, they are maintaining a large cash position waiting for the right opportunity to purchase something.
I don’t think they are alone in that regard by any means. When I was first interviewing funds it appeared that they understood their mandate was foremost to preserve capital. I was unsure whether they really intended to do that but from what I have seen that is indeed the case.
If we closely look into the text of the law, a qualifying fund investment should have the following conditions:
1- Transfer of capital in an amount equal to or greater than € 350,000,
2-acquisition of units in investment funds or venture capital funds
3-fund should be constituted under Portuguese legislation
4- fund maturity , at the time of the investment, be at least five years, and
5- at least 60% of the value of the investments be made in commercial companies based in Portugal.
Now, the question is how does an exchange traded fund satisfy No.4 above?
The fund managers and the bank may say their fund qualifies, but how do they address this specific question?
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My Google translation of the law is “maturity of at least 5 years”. The prospectus of the IMGA states that the “fund was authorised by [CMVM] for an indefinite duration.” An indefinite duration is > 5 years.
As I have said, I think people are taking the qualification requirements too literally. This is just a wild guess on my part, but I don’t think SEF really is aggressively scrutinizing every aspect of the app and hunting for ways to reject an application, for example you forgot to initial section 3. SEF will AFAIK verify your investment every 2 years to ensure you are still invested if you want to renew, and if you no longer have the investment you cannot renew your GV. Thus I imagine this requirement is not intended to force you to be in an investment for 6 years but rather a way to weed out non-compliant investment choices.
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I was hoping to just make back the rate of inflation and considered this dead money for the next 5 years. I was just trying to avoid making someone else rich because I need them to get the Golden Visa. .
I’ve added Lince Innovation (not Lince PT Innovation) to the Google Sheet.
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Thanks for the quick response Michael! I’m just now looking into GV/Portugal. Mind if I pick your brain from time to time?
Be safe!
Curtis R. Markham, M.D., DABAM, DABA, FASAM
Was all set to go the PE fund route but upon hearing about these Index fund options, would like to learn more. Would also be interested in a contact at BPI to discuss the fund and bank account setup. Pls PM if you’d prefer not to share publicly. Thanks!
My first impression was that SEF requires a 5-year lock-in period, but I guess your interpretation is closer to the letter of the law.
To be clear:
- The GV requires that the actual investment be for a minimum of 5 years.
- The clock on that begins when you get your official visa approval, after you do biometrics. That can currently take up to a year after your initial application.
- After the 5 years, it then takes more time to get your permanent visa or citizenship, and I’m not sure how long it takes but I’m guessing it helps to still hold your investment during this time.
Due to this vague timeline for the application, and that you often can not get your money out immediately, you need a fund that allows your money to be in for at least 7 years, and many give you an option up to 10 for the reasons listed above. So bottom line, I’d consider your money as locked in for at least 7 years.
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I understood from the webinar,that they bought raw land and let the tenant be responsible for looking after it.
After I read @joseph.c.lapierre ’s post about investing in Investment Funds, I did some research. Here you can see a list of all investment funds (mutual funds) with their annualized returns and risk classes:
http://www.apfipp.pt//report.aspx?itemcode=MR_FIM_PUB_EN.rpt&calendar=yes&type=FIM
This is the website of the Association of Investment Funds and Pension Funds of Portugal and has tons of useful information. In the list, there are many funds that invest in bonds or in foreign stocks and therefore do not qualify for GV. I guess it takes some digging to find out which funds qualify.
From my quick reading of it there are only 3 funds that may qualify. They’re in the Domestic Equity Funds category.
Another fund that’s popped up in the pure-PE space is Indico Capital Partners. They’re more like Shilling, incubator/early-stage, bunches of 100k-500k investments in startups, but with a lot more mass behind them than Shilling appears to have. Again, it has to be your thing, but it’s another option. I might have more to say later on them.
So really there are quite a number of reasonable options now in the fund space that are likely to have pretty decent returns, outside the “looks like a REIT” space. It’s just that they don’t come in the nicely-wrapped package of listed-share index mutual funds. That said, one might look at it as an opportunity: in the US, most people don’t have much opportunity to get into the PE space due to the US accredited-investor rules; here, you can.
FWIW I’ve thrown the Oxy Capital fund out the window. They’re doing another REIT. The thing being they have no direct experience in doing REITs. They have a lot of money in buying real estate companies, but that ain’t the same thing. It feels like they’re spinning something just for GV, it’s a small fund and they’ve been doing larger funds, they want your full 350k… meh. Maybe it’s fine, and arguably Oxy’s a better choice than any of the Lince-backed funds because Oxy is a real player, but shrug YMMV. They do admit that they’re charging that 3.5% subscription fee to pay referral fees. Gives you a notion of what folks like GCS and Magwind are getting on top of what they charge you…
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