What is EQTY Capital?

EQTY Capital is an advisor to the EQTY Capital Funds ("The Funds"). We are not the fund managers. The Funds are managed, from a regulatory and administrative perspective, by regulated fund management, by regulated fund management companies in Portugal.


Will The Funds invest in assets in primary locations, restoration areas, or strategic locations?

The Funds EQTY Capital are advisors to will invest (via SPV's) in a mix of locations geographically. The nature of Portugal means that strategic locations as well as prime locations are in need of restoration. Furthermore, The Funds will also invest into commercial properties with long term AAA tenants. Thus, diversity is key. What is important to consider is that each investment is not limited to one income stream, for example short term v long term rentals.


Are both funds, as highlighted in the deck, available for subscription currently?

The Prime Residential and Balanced Portfolio funds are fully subscribed and closed to new investors. The Global Growth fund is circa 90% subscribed and still open to investors. Two new funds, the Prime Portugal and Balanced Plus funds were recently launched.


Has the EQTY management personally invested in the EQTY Capital Funds?

Yes, and in addition, EQTY Capital also holds units of participation in The Funds.


Who are EQTY Capital's top 3 competitors?

We are unique in Portugal in the general fund space with the use of sub-funds. In the Golden Visa space there are a number of funds eligible for investment. Looking at what is on offer, EQTY is an elevated option offering a platform as opposed to a single developer focused fund. A significant make-up of the team is focussed on good governance and compliance. This sets EQTY apart further.


What is the expected IRR of The Funds? Are they planning on distributing annual dividends?

The expected IRR is between 50% and 63% conservatively targeted depending on the sub-fund chosen by the client. Clients are able to blend their investment across both sub-funds. Annual dividends will be distributed bearing in mind that The Funds will in majority be investing off-plan. Therefore, dividends are anticipated mainly from year 3.


How much are The Funds trying to raise?

Sub-Fund I and Sub-Fund II, which are both fully subscribed, raised €45M together. The Global Growth Fund, which is subscribed at circa 90%, will raise €40M. As for Sub-Fund III and Sub-Fund IV, they aim to raise €30M each.


What is the annual management fee? Are there any hidden fees?

Fees are simple: 1,5% (Management Fee), €5,000 (1 off subscription fee of 1,5% of capital invested assuming a €350k investment).


How do The Funds diversify risk through a balanced portfolio selection?

Diversification is considered top to bottom not only in type of investment but also location. This is even true in the Residential-Only Fund as investments will be made in various locations, in assets of differing values and developers.


What is the target investor profile?

While investment is from €50k for the Sub-Fund III and IV, the minimal investment is otherwise €100k and up. The funds are also suitable for investors seeking alternative residence and eventual EU passports.


Are The Funds CMVM registered? Will pending regulatory changes affect The Funds?

The Funds are regulated by CMVM. All information about the registration of The Funds can be found under the Private Equity and Venture Capital section of the CMVM website.


How long will the investment be locked in for?

The Funds have an 8-year lifespan which can be extended for a period of 2 years should the need arise. If the investment is being made for Golden Visa purposes, the investment must be maintained for at least 5 years, however, can exit early but could put their Golden Visa at risk and at an expected cost.


Does The Fund have any potential extension period?

There is a 2 year extension option available subject to unit holders' approval.


When does the subscription period end?

The subscription period for each fund runs for 18 months.


When is the fund closing / maturity date?

8 years with exits from investment occurring from year 6.


What is the structure and background of the team?

Fund Box is a leading fund manager with over €300M AUM. They are the market leaders in real estate funds particularly and have been in operation successfully for a number of years. STAG is part of the Dixcart Group, an international organization with over 40 years of experience. STAG is a fund management company with a team of professionals that combine over 30 years experience specialized in dealing with private equity, corporate restructuring and corporate finance across multiple jurisdictions.


Do the interests of the investors match those of the Fund Managers? Are incentives the same?

The Fund Managers have a stake in the 20% profit share, therefore their interests are aligned with investors.


Is there a performance fee at exit? Will this be a percentage of the profit?

The performance fee at exit is 20% of the profit.


From an investor's perspective, what tax implications would he/she need to be aware of?

The Funds are tax neutral in Portugal. The investor would need to declare income in their home fiscal jurisdiction and pay personal income tax accordingly.


How long has EQTY Capital been in existence? Would you have a chart depicting the total returns (annualized) generated since inception?

Three EQTY Capital Funds were launched in 2021, which are all at the initial stage of their acquisition phases.


Is EQTY Capital the one that has approval from CMVM to operate the fund or will this be run by another (local) entity? If it's the latter, will this not increase the overall risk to an investor?

EQTY Capital is the advisor to the EQTY Capital Funds ("The Funds"). We are not the fund managers. The Funds are managed, from a regulatory and administrative perspective, by regulated fund management companies in Portugal. If anything, this should add comfort to investors, as it is the regulated fund manager’s responsibility, through its Investment Committee, to verify whether the assets EQTY Capital is proposing for acquisition are of good value to The Funds, ensuring that the investors’ best interests are at the base of any decisions. Additionally, the Fund Manager reports frequently and directly to the Portuguese market regulator.


I did find details on the executive members and core team in the deck, however, I couldn't find information on the fund manager (who is he/ she, what's the background, what's their strategy to manage the portfolio/ optimize risks etc).

FundBox is the manager for the EQTY Capital Fund I, which comprises of 4 sub-funds, namely Prime Residential, Balanced Portfolio, Prime Portugal and Balanced Prime. STAG Fund Management is the manager for the EQTY Global Growth Fund.


I notice that there will be an exit option that can be exercised in Year 6 or 7 (depending on the choice of fund) by the investor. Is there any additional expense to be borne by the investor for exiting at this point?



Does the investor have a choice between a growth option (i.e., dividends reinvested) or a dividend distribution option within this fund?

All of the EQTY Capital Funds pay dividends on a quarterly basis, if there is a positive cash flow. The dividends are not reinvested.


If I understood correctly, the expected IRR for the portfolio is between 7-8%- Is that after deducting all applicable set-up fees, AMC and any other expenses?

All target returns, including IRR, are net of all costs, fees, charges or profit-share.


Is there any exit load on the fund (at the time of withdrawal)?

The EQTY Capital Funds have 8 year terms. Initial exists are permitted in the 7th year. Investors wishing to exit before the 7th year are free to sell their units of participation to an incoming investor. Neither option is subject to an exit load. Unit holders investing for the purpose of the Golden Visa should be aware that it is likely to take around 7 years to obtain a permanent residence visa and/or citizenship.


What are the biggest risks in the fund and how much draw-down from the portfolio should investors prepare for (on a worse case basis)?

This is normally covered on calls with potential investors, as it requires a more detailed overview of the Portuguese real estate market, but one thing to bear in mind is that the target returns for the EQTY Capital Funds are the result of a conservative approach. For example, annual capital appreciation on prime residential property in Portugal has been at around 8%. The funds’ target returns have assumed capital appreciation of circa 3,5%.


How can an investor check the performance of the fund?

The Fund Managers are obliged to report to unit holders twice a year. In addition, a quarterly report will be provided and an online portal will be made available to unit holders in Q2, 2022. The portal will provide information such as the value of the investor's units of participation, acquisitions made by The Funds and overall performance of the assets.


Does a non-resident in Portugal need to file taxes annually, even if only income is from the fund distributions?

As a non tax resident, you would not be required to file an annual tax return in Portugal and the tax on dividend and capital gains from Venture Capital funds is 0% for non tax residents.


What are the options if the fund closes prematurely (including the impact on the investment as well as GV status)

The funds do not close prematurely. If anything, a new fund manager may be engaged to see the fund through to maturity, meaning your GV status would remain unaffected, irrespective of the value of your units of participation in the fund.


Do you have preferential rates for GV legal assistance?

We do not provide legal services, nor do we have any legal fees agreements with local law firms, as this would present a conflict of interest. Your local legal advisor’s job is to perform due diligence on the fund you are investing in.


What is the communication strategy with the investor(s) once the fund is fully subscribed?

The Fund Managers are obliged to report to unit holders twice a year. In addition, a quarterly report will be provided and an online portal will be made available to unit holders in Q2, 2022. The portal will provide information such as the value of the investor's units of participation, acquisitions made by The Funds (via SPV's) and overall performance of the assets.

Would you like to know more?

Feel free to call us +351 215 950 000 or send a message below.