Portugal GV Fund Comparison?

No, usually it looks like

a fund gets 1-2% of AUM (yearly)
5% returns to investors
the rest of profits - 20% to the fund manages, 80% to investors

here what they do is change you 1.75% yearly (more or less normal) , then at the end of investment period that gay takes 35% of profits, then the fund takes 10% and the rest goes to investors

I invested in a different fund, but this has been my thinking all along. Preserve capital is my hope.

It might be worse, but also, surprisingly, you might end up better off.

This is the thing about private equity. It’s different. Having a 5-7 year lock in sounds bad, but it means that the manager can take long-term bets without worrying about the stock price. If they’re managing well, they sit on cash and buy at the bottom. Or, they’re writing notes on assets that have long term value that will survive economic conditions.

“Bad” economic conditions represent an average. Almost invariably someone is doing well. Some folks came out of the Weimar disaster smelling like a rose.

The difficulty of course is in picking the winning horse, and yes it’s harder in PE unless you have the background to do it.

having multiple share classes is normal. there are often preferential holders, and valid reasons for there to be preferential holders. for example, you need seed money for the fund, and someone has to cough it up. naturally they will want a higher rate.

One fund I own (not a .pt GV one) has the manager getting 40% on anything above 15%. I sank a lot of money into this fund because 60% of the actual returns is still a pile of money and I am bloody happy with the return profile.

I think you can focus too much on how much someone else is getting compared to you. You have to look at the overall picture and decide whether it’s worth it to you.

(That doesn’t mean fund managers aren’t greedy though, and maybe whatever that fund is, is a bad deal. I don’t recall that specific one.)

You will want to discuss this with your lawyer but yes you should be fine shifting to another investment so long as it is of the same type (e.g. you can’t choose to go buy a house).

Good question about IMGA vs BPI. Here’s my story on that. I initially thought I wanted to invest in real estate. I opened a bank account at Millennium Bank. Then I came to my senses and decided to invest in a PE fund. I found two or three PE funds that were appealing. Unfortunately, MB will not act as custodian for PE funds, so I had to open a new bank account at Bison Bank. Then I heard (not from Bison Bank, ironically) about IMGA. I decided I wanted to invest in an open end fund. When investigating the open end fund, I learned about BPI. I contacted BPI and they told me that I would have to open a bank account at BPI (or whatever bank they use).
At that point, UDS/EUR exchange rates were moving in the wrong direction. I had already had my lawyer open two accounts, and I wasn’t going to hassle with a third. I did no further diligence on BPI. My attorney told me that I could move my money from IMGA to BPI later if I wanted to, and it would not substantively affect my SEF application. (I do not know if that’s true, or if I understood what was said correctly, or if I am remembering that correctly, so don’t count on it). At the time, I figured, I will invest in IMGA now. It’s open ended. No subscription fee. No redemption fee. If I find something better later, maybe (and I say maybe) I can switch.

The fees charged by IMGA and BPI are just like US mutual fund management fees. You don’t actually pay them. Instead, they are paid from the fund. So they affect return on the NAV. I just checked BPI vs IMGA, and I see that BPI does appear to have marginally better long-term results that could indeed be attributed to a 1% lower management fee.

I see that someone who did more diligence than I did said that BPI was not as helpful with the PFIC. BPI will change their response if they get enough inquiries. There may be other pros and cons of BPI. I don’t know. I have no other information that would suggest BPI is not a good idea. For all I know, it is a better idea than IMGA.

Also, I have said this before in an earlier post, but one thing no one else seems to be aware of, and is a negative about open end funds like IMGA and BPI is that open end funds have less favorable Portuguese tax treatment than closed end funds. As I understand it, capital gains on closed end funds are taxed in Portugal at 10%. Capital gains on open end funds are taxed in Portugal at 28%. That’s what I heard, but I don’t know if it’s true, and don’t ask me to explain it, or to explain how Portuguese and US tax laws interact under relevant tax treaties. Do your own diligence on this subject. That’s a pretty big difference. I accepted it. 28% is basically the same as what I pay on capital gains in the US. Like others, I was thinking of capital preservation (in addition to transparency and liquidity of an open end fund), and thought any gain - anything - would be a bonus. Of course, now that I already have some paper gains in IMGA, I am greedy, and hate that 28% of the capital gain if I sold today would go to taxes. But that doesn’t make me unhappy that I invested in IMGA.

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Hurdle rate of 15% is already a good point in your case ) anything above it would be ok.
But of course I do agree and support your point. One should focus on the fund and long term value, rather than on how much somebody gets. At the same time this particular fund amazed me with these fees\rates.

I’ve started the process to invest in IMGA, not super worried about fees, taxes, or returns, capital preservation is enough for me if I end up with citizenship or PR at the end.

Slightly worried about the risk that rules will change so GV holders can’t get citizenship, but not a tremendous amount at risk for me monetarily, so worth it I think.

Only other major concern is the slow biometrics stuff but I’m hopeful that will speed up, and we’re able to get last minute flights to portugal to hit the appointments if necessary. There’s only two of us, so very easy.

Just need to make sure the lawyer I work with is going to be aggressive about getting those appointments for me :slight_smile:

I’m considering Greytech II from Iberis and in the process of scheduling a meeting with them. If you guys want to ask them any questions, let me know.

Has anyone on the thread looked at or invested on Aston Gold from Dunas Capital? Curious to hear comments. They are a 6 year close PE fund. So timing is about right with GV citenzenship. They have lower subscription/maintenance than Iberis Yield and BlueCrow. Dunas Capital seems to be a conservative management company.

I am very concerned with fixed-duration closed funds. Sounds like a lot of things are slow in .pt so open ended is very attractive to me

The one benefit Shilling has over Indico is the low Ticket price (100K. Min V. 250K) so looks like a better diversification option to me. Still good management and track record for an early-stage fund.

Hi there AlexEcho, yes the minimum investment into the fund is 100K. I believe the website says that the minimum investment to achieve a GV is €350k - slightly stating the obvious in the context of this forum.

Hey,
Now read all your posts and thanks for the information. I would like to just few more things incase you know. May be it will help everyone so let me ask you detailed questions here.

  1. How did you choose / find which funds like these ( Non real estate type GV focussed) are acceptable for GV investment
    e.g. IM Gestão de Ativos
    In this list only fund that invests in Portuguese companies will be allowed or Any of the funds managed by IMGA will be acceptable.
    e.g. instead of the IMGA Acoes Portugal if one wanted to invest in say the Multi Asset Global Fund managed by IMGA IM Gestão de Ativos

  2. Would close ended funds also qualify?

Thanks
Anu

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Thanks everyone for your posts so far. This is a wealth of information. I am now in the final stage of shortlisting two funds for the investment.

This is how I am looking at this:

  1. Real estate based : Choosing between Rock Capital and Bluecrow. Very different in terms of fund and fund manager background, types of real estate exposure, source of income (boring locked rental yields vs appreciation) etc. Unless I choose to stay fully in RE, I will choose one of these

  2. Diversified VC: Choosing between Portugal Gateway and Iberis. A close third option was Indico Blue Impact. Iberis by its investment philosophy seems less risky between the two but I may be biased towards Portugal Gateway at this point.

Would be grateful for any views on tradeoffs between these pairs of funds.

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On behalf of all of the main contributors, thank you for doing the work of reading the entire chain first.

Rock/BC - as you say, very fundamentally different, you’ve done the work and identified the main tradeoffs, which I imagine means you know/have gleaned all the details of those tradeoffs. From this point, it’s just a matter of what makes sense for you personally.

PG/Iberis/Indico - PG effectively has state backing via PV (it isn’t but it is IMO), which means their startups get more incubation services than the others, and they have a lot more seed capital - there’s no risk of fail-to-launch. They all have track records; I view Iberis’ skeptically, but that’s a personal viewpoint. Gavin has a less than cheery view of those track records but IMO there’s also only about so much you can expect for returns in a country as small as Portugal esp going back to 2000 - “not losing your shirt” is probably a fair benchmark given the PIIGS disaster. But really they’re all fine, none of them are fly-by-nights, it’s just how you view the merits/upsides/downsides of their chosen risk profile and targeted sectors and what the manager brings to the table; all the data is up-chain, and it’s just something where only you can know what makes sense for you - there’s no one Right Answer. But I am guessing that you already know that by now too. :slight_smile:

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Please I need contact information for lawyers that did some actual gv applications based on bpi or imga

Much for

Why people don’t like Iberis or PG?

what gives you that impression?

I see it from what people say here, viewing either Iberis or PG sceptically.