Portugal GV Fund Comparison?

yeas, as Guiā€™s comments , SEF only posts general investment principles on fund investment sector which is eligible for GV, so investors have to double check with fund managers. By my understanding, investment funds ( VCs or PEs) with focusing on local SMEs or Start-up companies should be eligible,

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Thanks @guifig and @pigletjulia. Will let you know when I speak to them.

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In order to be eligible, a fund needs to have a maturity of 5+ years and invest at least 60% of its resources (cash) in Portuguese companies.

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Hi all,

I am new to this site and have been reading up on this forum all morning and attempting to absorb as much info as I can. Many thanks to all of you for openly sharing so much information as well as to the folks who started putting together and contributing to the spreadsheet about the funds as well as the lawyers.
I have a question about picking the laywer for you - how are yall going about that and making that choice? I have also tried to search the various topics and this is one where I havent found as much information on.
I did reach out to Thomasā€™ recommendation Margarida Torres.

Many thanks in advance for the help. Please advise if I should start a different thread on this topic.

Cheers,
Harish

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Thanks everyone here for your incredible and open insights. @faizal thanks for putting together the list. I wanted to give back. I added a new tab of all the information (didnā€™t want to mess anything up in the existing one) I collected from various funds and my thought in case helpful for others with more information.

It includes additional thoughts and information about the funds that I explored. There are some open questions I have and will be following up with various funds to clarify. I tried to capture in the final column Q (summarized thoughts and questions) all the information and how it ranks. Welcome any one to edit it as well. @william.reichert and @beckettmatthew would love to get your insights if you agree.

One thing I noticed overall is the opacity of the fees here compared to funds in the US. There isnā€™t always clarity who is paying the 3% introduction subscription fee for introducing us investors to the funds is coming from. Some funds clearly show where it is being paid, others donā€™t. (This Nomad Gate site has a brilliant business model).

Welcome everyoneā€™s thoughts!

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yes, can pls share your comments once talking with them. I suppose PEEIF is an exiting fund(not new one) but donā€™t know if the track record info is enough.

Thanks!

Nice work.

For Bluecrow, the fees are a little confusing. Iā€™ll just quote Duarte:


Beware also of this symbol: ā€° it is percentage to the hundred. And it applies on that presentation on bank fee and supervision fee, so Supervision fee is 0,1596ā€° = 0,01596% and bank 0,5ā€° = 0,05%
ā€¦
Total current costs in percentage: 1%+0,05%+0,01596%+0,005%+possible taxations = 1,1%

They arenā€™t trying to be misleading; indeed, theyā€™re being very exact - the audit and custodian bank and supervision fees have caps and floors, thus the actual fee paid is a function of the size of the fund at the time.

I think subscription fees only show up when youā€™re not dealing with the fund manager directly in the first place. There are none for Bluecrow.

And as far as opacityā€¦ I kind of feel like itā€™s no different than it ever was in the US with mutual funds, before Vanguard. If youā€™re based in the US, itā€™s easy to take the US capital markets for granted.

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Never even knew ā€° existed as a symbol! Thanks for sharing.

Interesting on the subscription fees, but I know that Bluecrow has to pay it somehow - someoneā€™s got to keep NomadGate going. :wink:

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Honestly, I donā€™t mind too much on subscription fee etc. Their investment policy and leverage level would be my key concern. Have yet got presentation of Bluecrow Growth Fund? Does anybody can share ? thanks!

I donā€™t know if itā€™s my place to share his materials or not. Just ask Duarte for them. Did you not get Thomasā€™s link for the webinar?

Iā€™ve had fairly extensive conversations with him. They donā€™t use any leverage. Wā€™s writeup in the sheet agrees with what Iā€™ve been told, 'cept at this point they have no intention of investing any further into the leisure sector until post-covid (as opposed to other funds which view the current situation as an opportunity to buy cheap). It actually is an operating fund with a track record, which is interesting.

Of the entire list of funds available, itā€™s the odd duck out. Itā€™s dull, itā€™s boring, itā€™s completely un-sexy, they donā€™t promise huge gains. If you agree with the basic premise of the fund (buying super-boring likely-low-growth yield-producing properties outside the non-tourist/retail/residential sectors) then I think itā€™s really worth looking into. But you have to buy into the underlying premise in the first place and a lot of people donā€™t/wonā€™t because they pretty non-traditional sectors, esp for US investors - itā€™s not like you see warehouse REITs featuring on CNBC and I know of no farmland REITs 'cuz the sectors simply donā€™t work that way.

Itā€™s also a different duck because Bluecrow isnā€™t a fund manager like Lince - itā€™s a wealth management advisory firm. Go look at their web page. Their real business is managing money for HNW clients; funds are just one way they do it - which is not uncommon really, just look at the various Swiss wealth management firms, they often create funds you put money into as their client, itā€™s their way of encapsulating a portfolio. Again, you may find this good or bad.

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I just got presentation from Duarte and took a quick review on their Management Regulation too.

I agree with you on almost all your points, thatā€™s why I am still sticking on it. Basically, they are two key strengths:

  1. track record. At least, the fun was set up in 2018. It has a valuation up to now.

  2. They keep highly cautious on PT property market, which is very different with their peer group.Most of local fund companies still advertise RE would keep growth and achieve high appreciation in the near future etc. I suspect investment in RE at this stage/ next year would highly possible stand at the price peak of property mkt. The challenge is not you enter in this mkt now or next yrā€” itā€™s how much downside would be borne by investors after 5-6yrs? Your original capital might be wiped out 50% even more in the worst situation? Although I donā€™t believe these funds would go bankrupt in most scenarios .

Key concerns:

  1. Bluecrow is a very small company. The original capital fund was just raised 5Mn euros.

  2. the perspectives of farm land: on webinar, they emphasized more on investment strategy on farm land and industry logistic facilities. I have no idea on the value of buying farm land? is it real or just a publicity stuntļ¼Ÿ

Happy to keep discussion.

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I spoke with BlueCrow today. Yes they started with 5M from a single family but now have 14M and 18 total properties. They are in final stages to invest several M more in new properties. Their track record with the original fund is good and have been paying a 5% annual yield. They have smartly pivoted away from leisure properties and moved to agriculture but may move back towards leisure in 2021. They plan to list as a public stock in 2023 - not sure what to make of that. Good or bad?

Hi Larry,

Thanks for sharing your info. It seems quite positive feedback.

I have yet spoke to Bluecrow but try to do it shortly. I agree with them not touching in RE now, but keeping eye on on Leisure sector at post era of Covid-19. In terms of listing plan, it sounds quite interesting. If they wanna go public, the fund should become more transparent and flexibility on investorsā€™ exit. However, I am wondering if a public fund would be eligible for GV ?

It seems unlikely any of the RE funds would go bankrupt as long as theyā€™re not levered. Your exit of that fund could be incredibly painful though - if the losses are high, the tendency will be to ā€œhang on until prices recoverā€ and so you might end up trapped as the minority vote even if youā€™re fine taking your 50% and running.

I donā€™t think small is an issue. You have to start somewhere. And if you look at, say, the small Swiss wealth funds, theyā€™re mostly not huge either. Donā€™t have to be. And the initial assets which were rolled into the fund were purchased in 2014. So you can ask about track record of the assets before 2018. But I think you have to look at the fact that Bluecrow has EUR200mm AUM, assuming they are to be believed, not that this particular fund is 5mm.

Farm land - I donā€™t think itā€™s at all a publicity stunt. Itā€™s what theyā€™re doing. One of the partners claims to have significant experience in the ag sector.

In the US, farmlandā€™s been a terrible investment mostly. I live next to a 150 acre farm and Iā€™ve watched the listing price drop continually over the last 8 years. However if Nebraska and Iowa turn back into a dustbowl because of climate change, farmland in New York State is gonna look like a damn sight better. And this is European farmland, completely different market. Maybe EU price supports make farming a really viable biz. Certainly Dutch and German farmers keep growing potatoes for a reason. And God knows the resultant foodā€™s way better than what we get. They said theyā€™re buying a pine nut farm and a olive oil farm, IIRC. Are those good investments? shrug Got me. But hence why I said itā€™s not a fund for everyone.

No one mentioned going public to me. The current investors are going to have to vote to approve it in any event, it isnā€™t Bluecrowā€™s decision, per the operating documents.

If theyā€™re at 14MM now theyā€™re sucking in capital fast - 2h2020 report to investors listed ~10mm. So you can guarantee your yieldā€™s gonna be well under 5% - they were/are sitting on a ton of cash. Thatā€™s not bad, just something to be aware of.

In any event Iā€™ve decided to go with them. Iā€™m just too much of a contrarian to buy the same dang hotel/residential/retail property everyone else is selling.

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sorry for my misunderstanding the msg-- ā€œto list in 2023ā€, Not to go public. I suppose it would be keeping as a closed-end VCs throughout the whole investment period.

  • 5% dividendā€“will they pay annually or accumulated one when investors choose to redemption?

  • Farm landā€“yeah, you are right, US farm industry doesnā€™t look profitable as it does in Europe.

  • donā€™t know when they acquired 18 projects in their basket ?I note there are a few projects in Lisbon and Porto are at negative value, say -18%ā€” -14% respectively. Should investigate more.

yeah, agree with your judgement. I donā€™t like to go RE investment too, but wanna investigate more on Bluecrow. will you plan to engage the lawyer they introduce to? I have yet contacted any law firm.

Just completed a call with PT Co. They are stating they are a ā€œconservativeā€ investment fund and thus, only will aim for a 1.5% annual dividend.
Here are the questions I raised, which they could not answer:

  • they, of course, can not guarantee my principal
  • their investments are in things like mezzanine loans and other secondary RE investments. These donā€™t strike me as especially conservative investment choices.
  • They said that they might not give 1.5% one year but then would ā€œpromiseā€ to make it up in a subsequent year
  • Any appreciation on the investments would be kept by the fund. This sounded like a 100% performance fee to me. They did not argue.
    So, help me out here. I see a fund that invests in a non straight forward way that is not conservative in reality, wonā€™t guarantee my principal, give me almost what Iā€™d get by investing in a CD and takes all the profit. Am I missing anything? Has anyone invested with them?
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Thatā€™s exactly what I heard. I threw them out of my consideration list immediately; Iā€™d have thrown away 280k into one of those apartment units before doing that. I want to say it frightens me that there are folks/firms who would market such a fund, but truth is that thereā€™s always dumb money in the market and people who will take advantage of that.

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Iā€™m still struggling with the how to choose a lawyer thing. There are so many choices, and itā€™s not clear to me how much it really matters - is it just plug-n-chug and anyone will do, or what.

The dividend is voted on by the unitholders at the annual meeting. They can choose to pay it, or accumulate it; there is no rule in the MR about it. If youā€™re a US tax resident, it doesnā€™t matter anyway; under IRS PFIC rules, youā€™re stuck paying mark-to-market as if it were paid, whether it is or not. (Thatā€™s under the best case scenario; itā€™s possible to make it far worse. Fair warning to everyone who is a US citizen considering a fund investment - CONTACT YOUR TAX PROFESSIONAL AND MAKE D&*%^ SURE THEY UNDERSTAND RULES AROUND PFICs.)

The properties were acquired between 2014 and 2018. Some are negative; itā€™s just what happens, you canā€™t win them all.

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@pigletjulia thank you for that. I think these funds are Qualified Election Funds (QEF), which would avoid Mark-to-market issues, and/or having to allocate final gains over the life of the fund?
One issue to be aware of is that gains may be taxed at ordinary income rates, not capital gain rates.

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