Why do Golden Visa Private Equity returns differ from institutional returns?

The primary difference is the funding model. Institutional investors typically benefit from 'Capital Calls,' keeping cash in their accounts until needed. Golden Visa investors usually fund 100% upfront to meet immigration requirements, creating 'Cash Drag' where idle capital dilutes the Internal Rate of Return (IRR).

What is the 'Accrual Anchor' in a Golden Visa fund?

The Accrual Anchor is the specific date when your Preferred Return (hurdle) begins calculating. If defined as 'First Deployment' rather than 'Subscription' (Paid In), you may lose 12–18 months of guaranteed accrued interest while your capital sits idle waiting to be invested.

How does a 'Deducted' subscription fee impact my investment returns?

If a subscription fee is 'Deducted' (e.g., €3k from €100k), only the remaining net amount (€97k) is invested. This means your capital working for you is lower, and often your Preferred Return is calculated on this smaller base, reducing your total profit compared to fees paid 'On Top.'

What is the difference between 'Committed' and 'Net' Return of Capital bases?

A 'Committed Base' requires the fund to return your full headline commitment (e.g., €100k) before the manager takes performance fees. A 'Net Base' only requires returning the invested amount (e.g., €97k), allowing the manager to enter the profit-sharing phase sooner.

What is the 'GP Catch-Up' in a distribution waterfall?

The GP Catch-Up is a waterfall phase where, after you receive your Preferred Return, the manager (GP) receives 100% of the subsequent profits until they catch up to their target profit share (usually 20%). This mechanism can aggressively reduce the remaining profit available to investors.

Why standard private equity calculators fail for Golden Visa investors?

Standard calculators assume institutional rules: gradual capital calls, huge legal leverage, and different fee structures. They do not account for the 'Cash Drag' of upfront GV payments or the specific legal definitions (like Accrual Anchors) found in Golden Visa fund PPMs.

How does 'Distribution Proration' affect my share of fund profits?

Distribution Proration determines if your slice of the profit pie is calculated based on your Gross Commitment (€100k) or your Net Invested Capital (€97k). In funds with mixed investor classes, this definition significantly alters the cash distributions you receive.

What risks can I model with the Golden Visa Private Equity Funds Return Simulator?

The simulator features 'Risk Knobs' to stress-test your investment against Deployment Risk (delays in investing cash), Execution Risk (write-offs or lower yields), and Exit Risk (delays in selling assets or forced holding periods).

What is 'Cash Drag' in the context of Portuguese Golden Visa funds?

Cash Drag refers to the period where your 100% upfront investment sits in the fund's bank account waiting to be deployed. Since this money is not yet generating returns but is counted as 'invested' by you, it significantly lowers your effective Internal Rate of Return (IRR) compared to institutional investors.

Does the 'Preferred Return' apply to my full €100k commitment?

Not always. It depends on the legal definition of the 'Preferred Return Base.' If the fund defines it on 'Net Invested Capital,' you only earn interest on the amount invested after fees (e.g., €97k). If defined on 'Committed Capital,' you earn interest on the full €100k.

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Cristóvão Matos

Managing Director

Nomera Capital

Published: Dec 8, 2025Updated: Dec 8, 2025