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3 Disastrous Mistakes to Avoid When Investing in a Golden Visa Fund

Optylon Krea
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Hakan Kodal, chairman of Optylon Krea, shared his predictions with IMI in 2019 and again in 2021 regarding the new Golden Visa eligibility route through venture capital funds.

He was 100% right and correctly predicted the future of the Portugal Golden Visa program. 

Optylon Krea, the first company to launch a fund eligible for the Golden Visa in 2018, navigated the different changes made by the law for the Golden Visa in Portugal. Today, Optylon Krea is the market leader in advising funds, having raised a total of 185M€ equity from 600 Golden Visa investors from 40 countries. 

Until 2023, you could apply for the Portuguese Golden Visa by investing in residential or commercial real estate in Portugal. However, due to increasing property prices, the government put a radical stop to this real estate-related Golden Visa route and shifted to allowing investments only through venture capital funds.

These funds must be non-real estate related directly or indirectly and regulated by the capital market board of Portugal, the Comissão do Mercado de Valores Mobiliários (CMVM).  

This time, we have asked Hakan Kodal to share his experiences and valuable insights on choosing suitable investment funds. 

Crucial advice from an expert

Before looking into any venture capital fund alternatives in detail, here are three essential matters to consider: 

Funds are serious business: Seek professional help

Venture capital fund advisory is a serious and regulated business that financial advisors should carry out rather than pure Golden Visa advisors.

As a Golden Visa investor, your motivation may not be the return on investment. Make sure you are in good hands and conduct your research independently.

Ideally, you should have your financial advisor identify which funds are a good fit for you and match your risk profile. 

⁠Make sure the fund doesn’t invest in real estate

Ensure the fund does not own or invest directly or indirectly into real estate, as the law clearly states it’s no longer eligible for the Golden Visa. You may risk losing your Golden Visa in the future. 

⁠Avoid buy-back options

You may hear that venture capital funds offer so-called buy-back options or guarantees, but they do not align with Portugal’s capital market board (CMVM) regulations.

These schemes target to attract non-sophisticated Golden Visa investors, and intermediaries looking for higher commissions rather than protecting their client’s interests are the ones who typically advise on them. Be careful when choosing who you work with, and make sure they have your best interests at heart.

Remember, as long as there is no bank guarantee, there is no guarantee whatsoever. 

The investor’s checklist

Once this is clear and you seriously wish to invest in a venture capital fund, here is a thorough checklist to help you choose the one that suits you best: 

  • Is the fund managed by investment managers or advisors who have a proven track record, ideally both in Portugal and outside of Portugal? 
  • Does the fund’s management team have solid experience in the sector they are investing in? 
  • Does the fund’s presentation include enough objective data about the industry and investments to cross-check the validity of the assumptions? 
  • Does the fund’s strategy consider possible economic downturns, and does it have contingencies for such cases? 
  • What are the fund’s underlying investments? Are they risky? What is your risk tolerance in such cases? 
  • What is the fund’s exit strategy, and how realistic is it? 
  • Is there an alignment of interest between investment managers/advisors and fund investors? 
  • Have there been Golden Visa approvals for the current fund or a previous fund overseen by the same team? 
  • Is the fund audited by a reputable audit company? 
  • Compare the different costs, such as fund management costs, set-up fees, and subscription fees. 
  • Diversification is an essential investment element, so make sure the fund has a diversified portfolio. To qualify for the Golden Visa, you may also choose to invest in two or three venture capital funds. 

Lastly, I should say that the Ando Europe Fund, managed by Stag Asset Managers and advised by Optylon Krea, is certainly one of the best options on the market. So please consider it and challenge us; we will happily answer all your questions. 

About the author: 

Hakan Kodal (Founding Partner & Chairman, Optylon Krea) 

With over three decades of experience in real estate investment and development, Hakan Kodal stands as a respected leader in both industries, highlighted by his tenure as the Founding Chairman of real estate organisations in Türkiye, including GYODER and AYD.

In 2006, he founded Krea Real Estate in partnership with Merrill Lynch. 2016 Hakan partnered with Charles and William and founded Optylon Krea, which quickly grew into a Pan-Mediterranean real estate development and investment management company.

The three partners founded Ando Living in 2019, a perfect combination of Hakan’s extensive expertise in branded residences and William and Charles’ considerable track record in serviced apartments. 

Optylon Krea 

The company was formed between Krea Real Estate and Optylon Capital to develop a Pan-Mediterranean real estate and investment management presence. The combined track record of the partnership exceeds €1.8 Billion in investments in Portugal, Turkey, and Spain.

Optylon Krea advises five investment funds regulated by the capital market board CMVM. 

To learn more about investment funds advised by OPTYLON KREA and the Portuguese Golden Visa investment option, please get in touch with our advisers at sales@optyonkrea.com  and visit www.optylonkrea.com