There is very little talk here about the fund options of EQTY . Though they seem to have just launched thier funds in March, it seemed quite interesting to me, and I have had extensive discussions with the partners a couple of times to clear any doubts I may have
They have basically 2 fund options
The Prime Real Estate with a lot of Diversification
The Prime real estate option and 20% will be invested in a venture fund which has been giving some good returns for that additional Alpha
For those that looked at the two fund options,
BPI Fundo de Investimento Aberto de Ações / IMGA Ações A - Fundo de Investimento Aberto de Ações
Does anyone know if individual stocks are able to be held as part of the qualification?
Here’s why I’m asking, I have a large holding already with interactive brokers, and am enabled for margin. However IBKR doesn’t have any of these funds available, however it does have the following, and I’m adding their weighting of the PSI-20 index for comparison:
GALP - 11.5% Oil and Gas
JMT - 10.5% Retail
EDP - 10.36% Utilities
EDPR - 9.69% Utilities
Based on this, approximately 88k euros of each of these gets us to 40% weighted value of the PSI-20, lets me use portfolio margin at my brokerage, and keep the stocks in the brokerage, thus lowering the impact on my margin as the holdings are also valid for portfolio margin. Given that IB is charging less than 2% for interest, it becomes a no brainer to hold these, in effect making the GV almost free.
Under the fund route, no. It specifies funds:
vii. Capital transfer of the amount of 350 thousand Euros, or higher, for the acquisition of units of investment funds or venture capital fund of funds dedicated to the capitalisation of companies, capital injected under the Portuguese legislation, whose maturity, at the moment of the investment, is, at least, of five years and, at least, 60% of the investments is realized in commercial companies with head office in national territory;
Individual stocks would probably fit under
i. Capital transfer with a value equal to or above 1 million Euros;
But none of us have ever really understood all the conditions around this. I am guessing
IB isn’t going to bother helping you with anything like an attestation to SEF (customer service?? you jest!)
SEF seems unlikely to accept such an attestation from a non-portuguese brokerage
your money won’t have crossed into portuguese territory really or in any guaranteed sense
use of margin seems unlikely to be acceptable but who knows
Jeff, you may be right about the capital transfer portion.
I will point out though, I’ve had IB give me me a signed letter acknowledging my portfolio value and then taking that to an embassy for a visa that required a certain net worth, so even if it wouldn’t work for GV, I imagine it will for the D7.
I don’t think use of margin will be a problem here, as I can always withdraw that money, send it to Millenium / BPI and invest there, and they’re none the wiser as to whether or not it comes from my margin account, from a home line of credit an inheritance or from my grandma for that matter.
@joseph.c.lapierre / @madpoet are you able to share either in the thread or via PM the lawyers you used for your paperwork? I’d like to see if there’s some firms who have a bit of experience of GV via publicly traded funds to pose some of these questions and to see the best way to proceed.
So, I had a chat with another fund about the various legal/regulatory issues around the fact that so many of the funds are REITs in disguise. Their take on it was basically “they probably lied to CMVM about their real intent when they established the fund.”
Wonderful.
This jives with something someone else said about yet another fund which had a bunch of legal issues around its formation (which did get sorted out apparently).
Granted there is probably a lot of back-biting and smack-talk between the funds, for all of the obvious reasons. I would not say this is unique to Portugal either. That said, in the case, I’m willing to accept their statement a little more than I might with others, because they also have more direct relationships with the government through their ties to IFD/Banco Fomento (the big Portuguese government-sponsored evelopment bank).
And granted I’m not entirely happy with the wording of the fund’s own MR. But they could make a legit case that what they were doing bore some resemblance to the MR, it’s just not super-obvious. (I don’t know if it is my place to say in detail as it is internal to the fund.) And given that IFD is willing to publicly acknowledge them as one of their financial partners, I kind of accept that the firm as a whole is probably relatively credible (at least within the bounds of what passes as acceptable in .pt) and therefore probably isn’t playing too fast and loose in what they are doing. It’s not absolute, but it’s something.
(For the curious - http://www.ifd.pt/en/partners-2/ FWIW, this is roughly mapping to a list of the “who’s-who” of PE in Portugal, from my various conversations with the funds; if you drop names and ask the questions the right way, you can get at least a little feedback. But admittedly this is also skewing towards early-stage and series-A/B since this is a development bank; I’m not sure, I haven’t tried to dig out IFD’s mandate vs PV or the others.)
BUT they also pointed out the reality - that most investors are skittish and unlikely to take a risk on true PE; RE is something people understand. Since that’s what the market wants, that’s what gets created and peddled. AFAICT, take-up of PE funds vs RE by GV has been fairly limited. And the introducing firms are unlikely to have enough experience to dig very hard - and probably little interest in doing so. shrug
Hello all. I have narrowed down to move ahead with IMGA but wanted to have an idea how many people have already proceeded with it and if someone has got the GV resident card already through IMGA.
Hi Joe, thanks for sharing this option. Depending on your investment objectives, this fund provides some liquidity and diversification advantages. I see from your post that you are a US citizen and therefore must still file taxes there. Will IMGA supply a PFIC Annual Statement so you can opt for QEF status? From what I’ve read this is a significant tax advantage for US tax investors. Thanks, Peter
Yes, I’ve been told that the statement will show up in my bank account portal. I use Bison bank and they are used to dealing with Americans and US taxes.
Other funds have (incorrectly) told me the same thing. Unfortunately, that is not how it works. They are likely referring to a FATCA report or something like that. Bison Bank is not involved with the PFIC report. This was already discussed in another thread.
I think there are going to be some very lively conversations about PFIC and QEF in early 2022.
Setting a superlative example, my investment fund issues QEF statements to mollify the Americans, even through it doesn’t foresee earning passive income at all and is presumably not subject to PFIC treatment. I commend them for being exceptionally proactive about accommodating the overwheming complexity and administrative burden of the American tax system. They also send out informative investor updates every quarter; I promptly read these with rapt attention.
I decided to start my process and contacted a lawyer to give power of attorney.
They sent me a POA sample to sign at the local notary. But when I read the POA, this paragraph worried me too much:
With any bank entities, open new accounts and operate them or operate any deposit accounts already held in the name of the grantor, request debit card issuance, withdraw and endorse checks regardless of their value, request bank checks, check books, withdrawing, depositing capital, requesting balances and account statements, signing receipts or checks, and also moving current accounts, term deposits, asking for redemptions and giving them discharge, selling or redeeming any financial investments, subscribing and refunding investment funds, shares, bonds, or other capital securities owned by the grantor, sell shares or bonds owned by the grantor or other credit securities held in banking institutions and proceed with all other operations necessary to practice and sign everything else necessary for indicated purposes;---------------------------------------------------------------------
What are your thoughts about this? (For who have given POA to a lawyer) Does your POAs include that kind thing?
