Each fund manager or fund advisor has been invited to answer a series of questions about their own funds as well as the market in general.
We spoke to João Ribeiro at C2 Capital to find out more about the MedCapital fund.
Could you please start by giving us some background about yourself and the team working on MedCapital Fund?
Team of 2 Operating Partners with 20 years of combined experience in a major healthcare operator, together with C2 Capital Partners, Portuguese Private Equity firm with +€500M of capital raised.
Why did you decide to create the MedCapital Fund?
We identified investment opportunities in the Portuguese private healthcare sector, which is still a very fragmented market, with an increasing consolidation trend.
Has the management/advisory team invested in MedCapital Fund and, if so why? If not, why not?
Yes, C2 Capital and both Operating Partners will invest up to 2% of the target Fund size (€50M).
MedCapital’s chosen investment sector is Healthcare which is unique amongst Golden Visa-eligible funds. Would you please explain a little more about the fund and how it operates?
The private healthcare sector in Portugal is still very fragmented, with regional differences between supply and demand of health services.
The investment policy of the MedCapital fund is based on regional consolidation strategies, enhancement and optimization of isolated units, and/or development of product ecosystems.
We aim to start divesting and distributing capital to the investors in 2026, enabling the investor to have a full invested capital reimbursement in 2027 (expectation). Following this period, the Fund aims to start generating annual capital gains until 2030.
How would you describe MedCapital Fund’s risk profile: Conservative, Moderate, or Ambitious?
The Golden Visa rules state that a qualifying investment must be held for just five years but MedCapital Fund lifetime runs for longer. Could you please explain the fund’s lifetime including the launch date and subscription period?
The launch date was December 15th 2020 and our subscription period deadline is December 31st 2021.
C2 Capital Partners commits to complying with Golden Visa investors’ obligations under the Golden Visa program, namely in what respects maintaining the qualifying investment for a minimum of 5 years after the issuance of the Golden Visa.
As per the Fund’s regulation, capital reductions can only be made via a proposal by MedCapital’s management entity. Therefore, C2 Capital Partners will not propose any such measure to the Fund’s General Assembly if the interests of Golden Visa investors are not adequately protected in terms of ensuring that the holding period for the qualifying investment is at least 5 years.
On average, how long does it take to onboard an investor into the Portugal MedCapital Fund prospectus and what are the main obstacles in the onboarding process?
As long as the investor has a Portuguese bank account open and Portuguese tax number, the process takes 1 week (on average).
In general, some investors are cautious because of the funds’ lock-in periods. How do you plan to deal with investors who wish to exit the fund before its full lifetime?
If the investor decides to exit the Fund before Fund’s maturity, there are two possible options; either the investors grant a sell-side mandate to the Management entity to find a potential buyer (most common), or the investor can try to sell it in the secondary market.
Could you please give us an insight into de type of investors who have already committed to the MedCapital Fund?
As of early September, the investor profile is split between 50% of institutional investors, family offices, and C2 Capital, and 50% from GV investors (>55) from different nationalities. Moreover, we are in very advanced talks with 2 strategic investors from the healthcare sector, one Portuguese and one international, that could have a significant impact on our fundraising.We have maintained a steady effort on raising capital and, as of early September 2021, we are at around 45% of our initial target of 50M€.
Many of those considering the Golden Visa are currently comparing funds vs real estate. What advice can you offer to help investors make the right decision for them?
We can only really comment on what we’re focused on within the MedCapital fund and healthcare is a rapidly growing sector due to long-term solid drivers, especially in the private sector, showing remarkable resilience to economic downturns. We have identified investment opportunities in the Portuguese private healthcare sector, which is still a very fragmented market, with an increasing consolidation trend.
The MedCapital fund has a solid and experienced manager in the form C2 Capital Partners which a Portuguese Private Equity firm with over €500M of capital raised and a strong track record in the hospital sector.
MedCapital’s two Operating Partners have 20 years of combined experience in one of the leading private Portuguese healthcare operators (recently joined C2 Capital) in the areas of business development, M&A, and optimization of healthcare units
The MedCapital fund is fully compliant with the Portuguese Golden Visa program, supervised by Portuguese authorities, with regular reports to investors.
Considering the incoming Golden Visa rule changes a on January 1st 2022, what advice would you give to investors who are currently looking into the program?
We would strongly suggest starting the process over the next 2 months
What is your outlook for Portugal from both an investment and lifestyle perspective over the coming years?
We would like to add that we see quite a positive dynamic in the Portuguese private healthcare market, with players growing at very healthy levels even in the current context and with several new opportunities for investment appearing in the market.