In Costa Rica, yields on these investment instruments have been declining since 2017 and even more this year, partly because of the increase in the unemployment rate of real estate.
The prices of real estate investment fund shares on the stock market have fallen significantly in the last year. Economist Adriana Rodríguez, director of the consulting firm Frecuencia Económica, explains what to expect in the medium and short term.
Arguing that a complete report on the financial situation of the companies owning the development was not presented, the Costa Rican Tourism Institute decided to cancel the concession of the Monte del Barco project, in the Papagayo Tourist Pole.
Aldesa Fondos de Inversión reported that Inversiones Monte del Barco S.A. and Inversiones GODA S.A., companies owning the tourism development, were notified last July 4th, but the concessionary companies will proceed to file in time and form, the appeal for replacement or revocation before the Board of Directors of the Costa Rican Tourism Institute.
Some days after having initiated the administrative procedure against Aldesa Puesto de Bolsa, the judicial authorities of Costa Rica carried out several raids in the homes of the directors of the entity and its offices.
On May 24, through a relevant fact, the General Superintendence of Securities (Sugeval) explained that investigations would be made to determine whether or not the stock exchange carried out the necessary accounting records of accounts receivable payment operations for nine months.
In Costa Rica, the General Superintendence of Securities initiated an administrative sanctioning procedure against Aldesa Puesto de Bolsa, arguing that the company would not have kept the necessary accounting records.
On May 24, in a relevant fact published by María Luisa Fernández Garita, head of the General Superintendence of Securities (Sugeval), it was explained that investigations will be made to determine if the stock exchange post did not keep the necessary accounting records of accounts receivable payment operations during nine months.
In Costa Rica, Aldesa Corporación de Inversiones applied for judicial intervention because of lack of liquidity and announced the closing of the stock exchange.
From Aldesa's press release:
March 8, 2019. The uncertainty generated by the fiscal crisis among Costa Rican investors during the last quarter of 2018 led to a severe loss of liquidity in the market, which impacted the private real estate projects managed by Aldesa.
The continuous acquisition of real estate and the diversification in the type of infrastructure invested, are the reasons for the growth of real estate funds, which monopolize nearly 40% of the industry's assets.
According to data from the General Superintendence of Securities (Sugeval), the proportion of real estate funds concentrated in the market has been growing for years, since in November 2013 they represented 29% of the industry and in the same of 2018 it rose to 41%.
Costa Rican fund manager Vista SFI was authorized to market shares of its Fondo de Inversión Inmobiliario Vista in the Guatemalan market.
From the statement of the Financial Group ACOBO:
• Negotiation of the Fondo de Inversión Inmobiliario Vista in the Guatemalan stock market will allow a wider coverage in the negotiation of securities through the Central American market.
The investment fund belonging to the fund manager of Grupo Prival has authorized a maximum amount of $150 million and the term will be 30 years.
The General Securities Superintendency authorized Sociedad Administradora de Fondos de Inversión de Grupo Prival to set up and sell stakes in the real estate investment fund.
Elfinancierocr.com reports that "...The amount authorized by the General Securities Superintendency (Sugeval) for the Prival fund is $150 million, with 30,000 shares and each of them will have a nominal value of $5,000.The expiration term will be 30 years and the maximum term for the placement of the authorized amount runs up to December 31, 2022."
Stable returns is the main characteristic of real estate funds which in Costa Rica have shown annualized growth of 26% in their net assets.
An article in Nacion.com reports that "...Real estate funds spent $284.2 million on the acquisition of 32 buildings between April2016 and March 2017. As of March, net assets managed by the seven investment fund management companies (SAFI) amounted to¢754,255 million, after a year-on-year increase of 26%, according to the Superintendency of Securities (Sugeval)."
Three financial funds in colones and dollars have started to be marketed by the fund management company of group Prival, of Panamanian origin.
Three financial investment funds have now received authorization for public offering by the General Superintendency of Securities.
One of the funds is public and in colones, another is public in dollars and the third is diversified and in dollars. Manager VidalVillalobos told Nacion.com that"...'The difference between the public fund in colones and the diversified fund in colones is that the latter not only invests in public titles but will also invest at least 30% of the fund in private instruments'.
Grupo Prival has received authorization to operate an investment fund management company in the local market.
The Superintendency of Securities has authorized Grupo Prival to open a fund company, and it has a term of a year in which to register at least one investment fund.
The new regulations for investment funds in Costa Rica allow for finances to be raised for construction, energy, transportation and public infrastructure projects.
The amendment to the General Regulationon Managing Companies and Corporate Investment Funds was adopted on 23 June. With this change, any investment project, from theconstruction of houses to hydropower stations, can be financed and developed using a special investment fund which will be known as Infrastructure Project Investment Funds.
A bill already approved in Legislative Commission intends to increase the tax paid on income from investment funds from 5% to 8%.
The bill leaves unchanged income tax paid on the profits generated from real estate development funds whose projects are"... popular housing and middle income housing, and those of environmental interest and public works."These will still only incur the rate of 5%.
At the end of April 2016, assets under management grew by 5.8% compared to December 2015, equivalent to an increase of $242 million.
From a report by the Chamber of Funds in Costa Rica:
Managed assets at the end of April 2016, investment funds showed growth in assets under management of 5.8% compared to the volume that was handled in December 2015.In effect, it went from the equivalent of US $4,181,000 (December 2015) to US $4,423 million (April 2016), in other words, and there was an increase of US $242 million.This increase is explained by open-end funds, which made US $193 million, while the closed-end type, made US $49 million.
The market regulator is preparing rules for a new type of short-term investment fund, which will be available before July.
The Superintendency of Securities (Sugeval) in Costa Rica announced that it will add to its portfolio an investment fund focused on very short term securities which are low risk and high liquidity, reported El financierocr.com. This new instrument will be approved in the first half of 2016.