Spearhead Capital
Investor Data Room
Confidential
Spearhead Capital
Venezuela’s political transition has begun, and it is early, uneven, and reversible. This Fund exists for investors who share one view: that normalization proceeds.
“We do not present certainty. We present an asymmetry, priced — resort keys at under a fifth of the region’s last major portfolio trade, and beachfront at a tenth of its own prior pricing.”
On January 3, 2026, U.S. forces captured Nicolás Maduro and brought him to the U.S. to face narco-terrorism charges, ending a regime that suppressed Venezuelan economic activity for over a decade. The investment thesis no longer requires a future assumption.
Energy-sector sanctions eased in mid-April. Diplomatic relations reestablished. Debt-restructuring talks formally authorized in May. A Cabinet-level trade delegation — Shell, Halliburton, SLB — dispatched to Caracas. Sovereign bonds re-rated to ~40–43¢ within days of the capture (Bloomberg, Tradeweb).
BlackRock’s Larry Fink — head of the world’s largest asset manager — declared publicly that he is “quite bullish” on the opportunity to invest in Venezuela, adding that the country could be brought “back into its glory.”— Bloomberg, May 2026
Institutional capital is returning in two waves. The first — sovereign debt and energy — is arriving now: it validates the normalization and builds the buyer pool the Fund expects to sell into. The second wave — real assets — arrives later, because it requires infrastructure foreign capital does not yet have here: counterparty screening under sanctions, per-parcel title and authorization work, and rails to move principal in and out (see Sanctions & Compliance, How the Fund Holds Its Assets and How Capital Comes Back). The Fund’s acquisition window sits in the gap between the waves. The first wave is not competition — it is validation, and future exit demand.
Global hotel transaction volumes +22% in 2025 from the 2023 trough — Americas +27%; luxury resorts and trophy assets emerging as top investment targets on record dry powder (JLL Global Hotel Investment Outlook, Feb 2026).
The Caribbean construction pipeline has contracted 12.1% since December 2023 — financing costs, construction costs, and insurance availability are keeping new supply out (IRR/CoStar Q1 2026; only four new projects started region-wide since March 2025). The Fund carries none of the three constraints: committed equity means no financing dependency; Margarita’s duty-free zone cuts imported build-out costs 20–30%; and repositioning existing stock sidesteps ground-up construction risk entirely. Repositioned keys arrive into a region that has stopped building.
The political path will not be linear — but the directional shift is unambiguous. A U.S.-aligned government is in power, sanctions are being dismantled sector by sector, and sovereign capital markets are already repricing. The events below are wave one — sovereign debt and energy. Wave two — real assets — is the Fund’s exit horizon (years 4–8); the Fund’s acquisition period sits in the gap between them.
Delta Force operatives capture Nicolás Maduro; he faces narco-terrorism charges in New York. Delcy Rodríguez sworn in as interim president on January 5.
With the market reopening, international institutions re-engage. The nearly 8 million-strong diaspora sends an estimated ~$4B in annual remittances (Inter-American Dialogue, 2022) — evidence of a sustained hard-currency connection to Venezuela, the same channel through which property demand returns.
Single digits after 2018 sanctions → nearly doubled through 2025 under U.S. pressure → ~40–43¢ within days of the capture (Bloomberg, Tradeweb) — approaching analyst recovery estimates of 50–60¢ (as of Q1 2026).
Central-bank sanctions on the energy sector eased; diplomatic relations reestablished; Commerce Dept. launches a Venezuela Business Information Center.
U.S. authorizes Venezuela to hire restructuring advisers. A Cabinet-level delegation — Shell, Halliburton, SLB — visits Caracas. Larry Fink declares he is “quite bullish.”
Both the transitional government and the opposition are incentivized to demonstrate economic progress beforehand. The elections fall inside the Fund’s hold period, before base-case exits begin — the portfolio holds through the political test. The window to acquire at distressed basis is open now.
Venezuela’s real estate market has been decimated — cut off from Western institutional capital since the 2007–2012 nationalization wave, and formally walled off by sanctions since 2017. The physical framework of one of Latin America’s most urbanized countries remains — what collapsed was confidence, rule of law, and capital access, not the underlying asset base.
The 2007–2012 run-up was bolívar flight, not Western capital — a “hedge-building” wave as locals escaped the controlled exchange rate into concrete (FVI). Foreign institutions had already exited after the nationalizations. Today’s closed prices sit at roughly double the 2020 bottom and under half the documented 2012 average — the Fund enters below the closed range and underwrites its exit to 60% of that average. The 2007 maximum is a ceiling reference only, never underwritten. Current asking $2,700–3,900 — closings historically ~50–91% of asking. Source: Fondo de Valores Inmobiliarios (FVI) — Venezuela’s largest publicly listed real estate owner — public-offering documentation and the TIR Inmobiliarios registered-transaction study, both via Banca y Negocios (Aug 2019, Jun 2021); current closed range per Cámara Inmobiliaria de Caracas (Descifrado, Mar 2023). Nominal USD/m².
The first SPV targets distressed beachfront land, hotels, and commercial mixed-use assets on Isla de Margarita and in Caracas, available on a distressed basis at $200–$500 / m² ($19–$46 PSF) for beachfront land and $500–$2,000 / m² ($46–$186 PSF) for built hotel and commercial assets — versus prime transactions of $2,000–$3,000 / m² ($186–$279 PSF) in the same micro-markets (Cámara Inmobiliaria Metropolitana; 2025–26 listings, labeled asking) and $3,800–$7,400 / m² ($353–$687 PSF) for prime new-build product in comparable Latin American capitals and Caribbean resort markets. This is not a discount; it is structural arbitrage of a magnitude rarely available in any asset class.
Buy large beachfront parcels at today’s distressed basis. Sell permitted lots into recovery. Base-case exit below what comparable lots list for today — and a tenth of the region’s ceiling.
Land comparables: Spearhead comp file, Exhibit C — verified listings, 2025–26; available on request. The entry basis is further corroborated by verified regional tract pricing (Exhibit C, Appendix A).
Seven Mile Beach: 0.61-acre direct-beachfront parcel, hotel/tourism zoned — the region’s most institutionalized beachfront market (CIREBA MLS #418731); larger Seven Mile tracts list at ~$1,600–1,900/m² — bracketing Margarita’s own prior peak.
Aruba appears in the built-product band only — its resort corridor sits predominantly on long-term government lease land, so no freehold beachfront land market exists to compare against.
Buying the capital’s best buildings at a discount: trophy Class A — the Torre Luxor / Torre Digitel / FVI-portfolio tier — at $2,000/m² ($186 PSF) all-in, a hard cap in the investment guidelines, against current tier asks of $2,700–3,900/m². Underwritten to only ~60% of the tier’s own documented 2012 average. Caracas is the Fund’s income and downside leg — never a second 6× story.
Sources: Cámara Inmobiliaria Metropolitana / TIR Inmobiliarios (M. Fernández — one evidence line, shared authorship) — closings at ~50–91% of asking; current $2,000–2,500/m² (Descifrado, Mar 2023). FVI public-offering data: office average $5,500/m² (2012) → ~$1,000/m² (2020) (Banca y Negocios, Jun 2021). 2007 maximum ~$7,000/m², 1996 bottom ~$1,000/m² avg: TIR/FVI registered-transaction study (Banca y Negocios, Aug 2019). Tower asks: 2025–26 listings, labeled asking. Flight-to-quality: JLL LatAm Office Overview H1 2025 bifurcation; in-market quality spread (new Las Mercedes $2,600–3,900 asking vs. older El Rosal $1,100–2,000 asking); embassy-corridor demand concentration (Cámara Inmobiliaria Metropolitana). Rents commence year 2; landlord bears condominio on vacancy. Exit methodology: the office is underwritten as price reversion (~60% of the 2012 tier average), not yield convergence — at the modeled flat rent of $18/m²/mo the $3,300 exit implies a ~3.4% buyer yield, disclosed here; no rent growth is modeled anywhere in the hold. The base exit sits below what an entire Las Mercedes tower asks today (19,023 m² at $3,680/m²). Sale and rent comparables: Spearhead comp file, Exhibit D — verified listings, Jul 2026; available on request.
Margarita’s current ADR of $45–65/night reflects crisis-era distress, not market fundamentals. Recovering to even half of Caribbean peer levels implies a 3–4× revenue uplift on existing hotel stock — embedded in assets available today at 50–90% below replacement cost.
ADR repricing headroom from Margarita’s distressed baseline to the 2025 Caribbean average — on 2.8M international arrivals Jan–Oct 2025, following consecutive years of high-double-digit growth, with Margarita arrivals up ~20% in 2025 (Venezuelan Ministry of Tourism; no independent series available — Venezuela does not appear in CTO/CoStar regional reporting). Margarita’s ~$55 is a Spearhead estimate from market data — no formal STR reporting exists for Venezuela; ~$55 is the midpoint of a $45–65 estimate.
WHAT THE REGION PAYS PER KEY — The Fund’s all-in basis of ~$65K/key compares against the region’s notable trades of the trailing twelve months: $352,188/room — Hyatt’s sale of the 14-property, 5,600-room Tortuga portfolio (Mexico, Jamaica, DR) — and $615,314/room for the Grand Lucayan, Freeport, acquired for redevelopment. (IRR Caribbean Hospitality Market Report Q1 2026, CoStar data — available on request.)
The Fund’s exits are underwritten on stabilized income at a 10% cap rate — no convergence toward these per-key marks is required or assumed. Any convergence is upside. Linear scale; no axis truncation.
The Fund’s $190 stabilized ADR is not a projection of a future market — it sits in the lower half of the band the island’s current quality tier already publishes, today, before normalization:
These prices clear on domestic-led demand, with no U.S. airlift and constrained international access. A full-scale branded resort already publishes 45% above the Fund’s stabilized assumption. The underwriting assumes only that repositioned beachfront assets reach a tier that already exists.
PUBLISHED OTA RATES, JULY 2026 (GOOGLE HOTELS, BOOKING.COM REGIONAL DATA, KAYAK); PER-PERSON PORTAL RATES CONVERTED AT DOUBLE OCCUPANCY; ISABEL LA CATÓLICA BY DIRECT QUOTE, ON FILE. PUBLISHED RATES ARE MARKET-PRICE EVIDENCE, NOT ADR PERFORMANCE DATA.
FUND STABILIZED ADR $190 — IN THE LOWER HALF OF THIS OBSERVED BAND, PRE-NORMALIZATION. PUBLISHED OTA RATES, JULY 2026; RATES FLUCTUATE DAILY — LINKS PROVIDED PRECISELY SO THE READER CAN CHECK.
The Fund concentrates on coordinates that cannot be reproduced — the financial core of the capital and the most established beachfront on the country’s premier island. Switch between the two markets and select a marker to see the asset focus and entry basis for each.
Venezuela anchors the Caribbean coast of South America. Both target markets sit on that coastline — Isla de Margarita, the country’s premier resort island, and Caracas, the capital, roughly 350 km west. Select either marker to fly the satellite view there.
SATELLITE IMAGERY © ESRI, MAXAR, EARTHSTAR GEOGRAPHICS. MARKER POSITIONS ARE APPROXIMATE; ENTRY-BASIS RANGES ARE ILLUSTRATIVE DISTRESSED-ACQUISITION TARGETS, NOT QUOTED PRICES.
Both markets were once fully wired into international travel demand. That connectivity is not being invented — it is being restored, and each restored route is a visible normalization marker.
At peak — 25+ international nonstops. American, United, Delta, Iberia, Lufthansa, Alitalia, KLM, Air Canada and Venezuela’s own Viasa connected Caracas nonstop to Miami, New York, Houston, Toronto, Madrid, Lisbon, Rome, Frankfurt, Amsterdam and Paris — including Air France Concorde service, 1976–1982.
Today — roughly a dozen international routes (Madrid, Lisbon, Istanbul, Panama City, Bogotá, Curaçao); U.S. nonstops suspended since 2019. Their restoration is among the clearest catalysts to watch.
At peak — direct international charters from Toronto, Montreal, Frankfurt, Milan, Prague and London; Conferry ran up to ~12 daily mainland car-ferry crossings (Puerto La Cruz · Cumaná); and the island was a scheduled cruise port of call at El Guamache.
Today — largely domestic (Caracas ~40 min) plus regional links; ferries at reduced frequency. Eastern-European charter programs resumed 2023–25, and El Guamache received its first post-crisis cruise calls — the early signal of the same rebuild.
ROUTE HISTORIES: CARRIER TIMETABLES / OAG — ILLUSTRATIVE, NOT EXHAUSTIVE. POPULATION: INE / UN ESTIMATES; EMIGRATION-ERA FIGURES CARRY WIDE ERROR BANDS. ISLAND AREAS: ARUBA 180 · BARBADOS 430 · CURAÇAO 444 · MALLORCA 3,640 KM².
Target foreclosed, underutilized, and distressed properties in irreplaceable Caracas and Margarita locations — at 50–90% below historical peak, in the gap before the second wave of institutional capital arrives for real assets.
Reposition for tourism, hospitality, residential and commercial demand. Install private backup infrastructure. Generate hard-currency USD income through the hold.
Target hold of 4–7 years per asset, within the Fund’s 8-year term — selling into a normalizing market as second-wave institutional buyers re-enter and Venezuela reprices to regional norms.
Each asset runs the same two-phase arc. While the dislocation persists, the priority is simply to own irreplaceable ground at distressed basis. Only once market fundamentals turn does capital shift from accumulation to value creation — improving operations or redeveloping outright.
Move first, in the gap between the waves: institutional capital is already re-entering Venezuela’s sovereign debt and energy sectors, but the real-asset wave arrives later. Secure as much hard-asset ground as the Fund can underwrite at distressed basis — including raw land banked for later development. These are coordinates that cannot be reproduced; owning them is the entire thesis.
Once demand, liquidity and pricing turn, the same assets shift from accumulation to value creation: modernize and professionalize operations on income-producing buildings, or redevelop and build out land into its highest-and-best use — then carry hard-currency income through to a premium exit.
ILLUSTRATIVE ASSET-LEVEL SEQUENCE. PHASING AND TIMING VARY BY ASSET AND MARKET CONDITIONS.
Gross underwriting targets per acquisition. Individual deals are underwritten to these hurdles before capital is called; every figure traces to the pro forma workbook’s Waterfall & Returns table.
Why 2011. Margarita’s pricing peaked roughly two years before Caracas’s. The island’s demand was charter-tourism-led, and it rolled over first — currency controls tightened from early 2012, foreign charter and ferry capacity collapsed, and beachfront transactions thinned well before Caracas office pricing peaked (2012 tier average; 2007 nominal maximum). The workbook’s land exits key off that same $2,200/m² 2011 reference: $220/m² entry → $1,300/m² base exit (~59% of peak) is a ~5.9× gross price multiple; ~5.6× gross MOIC after acquisition fee and disposition costs — the figure that blends 60/20/20 with hospitality and the Caracas office to the fund-level 4.3× gross.
These are gross, per-deal hurdles — the land figure is the price multiple on entry; after acquisition fee and disposition costs it is a ~5.6× gross MOIC. Blended 60/20/20 across land, hospitality, and the Caracas office — and net of all fees, expenses, and carry — they translate to the Fund-level returns below.
| Downside — no recovery (stress) | Base — transition holds | Upside — full repricing | |
|---|---|---|---|
| Land exit | ~entry ($220/m² · ~$20 PSF) | $1,300/m² ($121 PSF · ~59% of 2011 peak) | $2,200/m² ($204 PSF · Margarita’s own 2011 peak) |
| Stabilized ADR | ~$55 (today) | $190 (~54% of the 2025 Caribbean average of $349; below the Dominican Republic’s $236) | $229 (~66% of the 2025 average) |
| Office exit (Caracas) | ~entry ($2,000/m² · rent from yr 2) | $3,300/m² ($307 PSF · ~60% of the tier’s 2012 avg of $5,500) | $5,500/m² ($511 PSF · full reversion to the 2012 avg) |
| Gross MOIC / IRR | 1.0× / ~1% | 4.3× / 40% | 7.1× / 57% |
| Net MOIC / IRR | 0.88× / ~(3)% | 3.4× / 32% | 5.4× / 48% |
All net figures are net of all fees, expenses, and carried interest. Base case assumes land recovery to ~59% of Margarita’s 2011 pricing, stabilized ADRs of ~$190 (below the Dominican Republic’s $236), hotels exiting at stabilized income in the year 7–8 window (base case: year 7), and the Caracas office exiting in years 5–6 at $3,300/m² — ~60% of the tier’s documented 2012 average of $5,500/m² (FVI public-offering data); the $7,000/m² 2007 maximum is a ceiling reference only, never underwritten. In the downside, all three legs are held for income and exited at entry basis — the income-producing office replaces part of the dark-hotel exposure, improving downside composition — and the GP earns no carry. The Fund expresses the view that normalization proceeds; investors who do not share it should not invest.
The downside column is the quantified basis-as-insurance argument made in The Primary Risk; the base case depends on the same political trajectory named there.
| Year ($M) | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
|---|---|---|---|---|---|---|---|---|---|
| Capital calls | (12.4) | (12.4) | (2.8) | — | — | — | — | — | — |
| Operating income (NOI) | — | — | 0.2 | 0.3 | 0.9 | 1.2 | 1.7 | 1.4 | — |
| Sale proceeds | — | — | — | — | 38.2 | 38.2 | 23.9 | 12.9 | — |
| Net LP cash flow | (12.6) | (13.0) | (3.3) | (0.4) | 32.2 | 32.7 | 21.8 | 11.8 | — |
| Cumulative net LP | (12.6) | (25.6) | (29.0) | (29.4) | 2.8 | 35.5 | 57.3 | 69.1 | 69.1 |
SOURCED FROM THE PRO FORMA TAB’S FUND-LEVEL ROWS — THE DISTRIBUTION ROW IS “NET LP CASH FLOW (DISTRIBUTIONS COMMENCE YR 4).”
The cash-flow profile behind the target return. Caracas rental income commences in year 2 inside its SPE — absorbed against deployment-period costs; hotel income begins in year 4; distributions commence in year 4, driven by realizations — land first, the Caracas office in years 5–6, stabilized hotels in the year 7–8 window — the base case realizes the final exit in year 7; year 8 and the two extension years are buffer, not requirement. Hotels are dark for renovation through year 3 and land produces nothing until sold; capital deploys over ~24 months and LPs fund fees through year 3. The J-curve is deliberate: the entry basis is acquired when income is thinnest, and the return is realized as assets reprice and season. Investors should expect no distributions before year 4 and the majority of value returned in years 4–5.
Who buys at exit. Exits are underwritten in sequence, not to a single buyer. The first bid is regional — Latin American hotel operators and local and diaspora family capital, buyers transacting in this market today. Second-wave institutional capital is the premium bid behind them, not the assumption. The preferred route is a share sale at the SPE level: the buyer acquires the entity, not the deed (see How Capital Comes Back). And the no-buyer case is not an open question — it is the downside column above: assets held for income at entry basis, with the two extension years ensuring no forced sale. The Fund does not need today’s exit market; it needs year 4’s.
CARRIED INTEREST FIRST BECOMES PAYABLE IN YEAR 4 ALONGSIDE LP DISTRIBUTIONS AND IS SUBJECT TO 25% ESCROW AND THE FUND-LEVEL CLAWBACK PER TERMS.
Venezuela Opportunistic Real Estate Fund I (the “Fund”) is offered through a single committed-capital vehicle — Spearhead CCS/Margarita SPV I — the entity into which all LP capital is subscribed. The Fund acquires distressed hospitality and commercial assets in Caracas and on Isla de Margarita, both current acquisition targets. The structure combines the simplicity of a co-investment with the capital certainty of a closed-end fund: investors commit once, and the GP calls capital deal by deal as acquisitions are identified.
Five entities operate in concert. Capital flows down; carry and fees flow to separate vehicles, each with standalone enterprise value independent of fund performance.
Each acquisition sits in its own wholly-owned SPE with no cross-collateralization. For LPs, a loss on one asset never reduces the capital returned by another. For the GP, carry can be earned on successful deals even if others lose — which is why all carry is subject to a fund-level clawback at wind-up (see Terms).
The full waterfall — return of capital, 8% preferred, catch-up, then the 80/20 split — runs at each SPE before net proceeds flow up to the SPV and out to LPs. Because carry settles deal by deal, an early winner can pay carry before a later deal’s outcome is known — the 25% escrow and the wind-up clawback exist to reconcile exactly that timing (see Terms).
LPs hold a single interest in the SPV and never hold a direct stake in any individual SPE — the simplicity of a co-investment with one tax document per year.
Every acquisition is settled independently at its own deal-level SPE. LPs receive their full capital back plus an 8% simple preferred return before the GP earns a dollar of carry. Figures below are a mechanics illustration only — a representative deal at a 3.5× gross multiple over a 7-year hold — not a fund projection; fund-level targets are shown in Return Targets and trace to the pro forma model.
CATCH-UP AT 100% TO GP. RUNS INDEPENDENTLY AT EACH SPE WITH NO CROSS-COLLATERALIZATION. CARRIED INTEREST IS SUBJECT TO A FUND-LEVEL CLAWBACK; SEE TERMS.
Every figure in Return Targets traces to a cell in the Fund’s pro forma workbook (available in the data room): four tabs — Assumptions / Pro Forma / Waterfall & Returns / Sensitivity — fully formula-driven, with a scenario toggle at Assumptions!B4 (1 = Downside, 2 = Base, 3 = Upside). The bridge below is the base case at fund level, with every fee line visible. This is a committed-capital blind pool: every acquisition is underwritten on its own pro forma before a dollar of capital is called, and real pipeline assets replace the modeled archetypes as they firm up.
Per-deal gross distributions, fees, pref and carry are rows 6–10 of the Waterfall & Returns tab; the fund-level MOIC and IRR above are rows 14–17 (live) and the three-scenario summary is rows 22–26. Blue cells are the only edit surface.
IRR is the annual compounded return, and it is driven by timing. The base case distributes nothing before year 4 and returns the majority of value in years 4–5 — the cash-flow exhibit in Return Targets shows the schedule that produces the ~32% figure. Flip the workbook’s scenario toggle and every figure here reprices.
MODEL OUTPUTS, NOT FORECASTS. ACTUAL RESULTS DEPEND ON ENTRY PRICE, HOLD, OPERATING INCOME AND EXIT CONDITIONS, WHICH ARE UNDERWRITTEN PER ASSET. ON ANY DIVERGENCE BETWEEN THESE PAGES AND THE WORKBOOK, THE WORKBOOK IS AUTHORITATIVE.
Venezuela Opportunistic Real Estate Fund I (the “Fund”) is the offering; Spearhead CCS/Margarita SPV I is its legal vehicle — a single closed entity into which all LP capital is committed at one hard close, then deployed deal by deal across Caracas and Isla de Margarita. One entry point, locked capital, and a deal-level waterfall — the simplicity of a co-investment with the capital certainty of a fund.
The two one-year extensions are a protection, not a prolongation: they exist so the Fund is never forced to sell into a temporarily weak market at the end of its term. All exits are underwritten to land at or before year 8.
Management fees accrue on deployed capital only — LPs pay nothing on committed but uncalled capital.
The 2% acquisition fee on purchase price compensates the GP for sourcing and execution, and funds operations during deployment while management fees are still building.
Carry is paid deal by deal as each SPE exits — so two mechanisms reconcile early carry against later results.
During the fund — the escrow. 25% of every carry distribution is withheld into escrow rather than paid out. It is released to the GP only once aggregate LP distributions equal LPs’ full contributed capital.
At wind-up — the clawback test. If aggregate LP distributions still fall short of contributed capital when the fund ends, the GP repays previously received carry up to the shortfall — funded first from the escrow, then by the GP entity, capped at carry actually received, net of tax. There is no mid-fund true-up: the escrow is the interim protection; the wind-up test is the final settlement.
SUMMARY OF PRINCIPAL TERMS — SUBJECT TO FINAL NEGOTIATION AND SUPERSEDED BY EXECUTED FUND DOCUMENTS.
“The assets are only cheap if you can actually buy them. The advantage is not an exemption — it is executed access, documented deal by deal.”
Foreign ownership of Venezuelan real estate is constitutionally protected (Art. 115); the requirements above govern how foreigners acquire. Enforcement practice varies; acquisition pathways are confirmed with Venezuelan counsel on a per-parcel basis.
Venezuela is not subject to a comprehensive U.S. embargo. Under OFAC’s published guidance, U.S. persons are not prohibited from transactions involving the country or people of Venezuela, provided no blocked person is involved. Private-party real estate acquisitions — the Fund’s entire mandate — fall squarely within that permission.
The obligation sanctions impose is a screening one, and we treat it as core underwriting:
Entities 50%+ owned by the Government of Venezuela are blocked even if they appear on no list, and the GoV definition reaches persons who acted on the regime’s behalf. Every seller’s beneficial-ownership chain is traced before LOI; any GoV or regime-connected interest anywhere upstream kills the deal.
Registry (SAREN), notarial, and tax payments incident to a closing are analyzed under OFAC’s authorization for administrative transactions; sanctions counsel documents the basis per transaction.
Sellers, brokers, banks, and service providers screened at engagement and re-screened at close.
SANCTIONS COUNSEL: SELECTION IN PROCESS — THIS SECTION UPDATES UPON EXECUTED ENGAGEMENT. SCREENING OUTPUT, OWNERSHIP TRACING, AND LICENSE ANALYSIS ARE RETAINED PER ACQUISITION AND LP-AUDITABLE. THE FUND CLOSES NO TRANSACTION WHOSE COMPLIANCE BASIS IS NOT DOCUMENTED IN ADVANCE.
Title insurance does not exist in Venezuela. Twenty-five years of informal occupation, competing claims, and registry irregularity make chain-of-title a per-parcel exercise — and that difficulty is part of why these assets trade at this basis. The Fund treats title work as underwriting, not paperwork. The process below is the Fund’s standard for every asset, before close.
Full chain-of-title reconstruction; gaps and irregular transfers identified, not papered over.
Liens, gravámenes, occupancy claims, and boundary disputes surfaced through registry, municipal, and on-ground inquiry.
Coastal parcels confirmed against Article 48 requirements; the acquisition’s legal basis documented per parcel (see How the Fund Holds Its Assets).
Clean title, resolved encumbrances, and authorization basis documented. No acquisition closes without it. Venezuelan counsel: engagement in process.
Payment staged against title milestones; competing claims and occupations resolved before funds release, never after.
Each parcel’s title file — trace, opinion, resolution record — is retained and available to LPs in diligence. In a market with no title insurance, the file is the insurance. A counsel opinion is not a guarantee against adverse claims; it is the market-standard substitute where insurance is unavailable, and pricing — the entry basis — remains the ultimate protection (see Principal Risks).
Venezuela expropriated private assets in the 2007–2012 nationalization wave, and the 2027–28 elections fall inside our hold period. We judge the risk real but low — the seizure era ended over a decade ago, state practice has since reversed, and today’s economic program depends on the very foreign capital expropriation would expel. Either way, we underwrite as if we are wrong:
Assets acquired at 5–10% of Caribbean replacement value — at that basis, the market has already priced a confiscation scenario; that is what the discount is. The Fund’s modeled downside (~0.88× net) is a no-recovery scenario, not a seizure scenario; seizure risk itself is not modeled — assigning it a probability would be false precision. The protections are structural and priced, not projected.
One SPE per asset, no cross-collateralization. A loss stays inside the entity that holds it and never reaches the rest of the portfolio.
Local ownership entities, operating assets with local employment, a Venezuelan principal. A factor that lowers the odds, not a safeguard we rely on.
This risk is also the source of the return. Capital that cannot bear it cannot bid — which is why the assets trade at this basis, and why the window exists. A Venezuela without this risk is a Venezuela priced like Punta Cana.
The Fund’s structure is designed so that principal flows — capital in, exit proceeds out — are never routed through Venezuelan banking rails. Exits settle offshore, in either format.
The buyer acquires the holding entity — paying the Delaware SPE in USD, offshore. No registry transfer, no Venezuelan banking event. Faster, cheaper, cleaner for both sides.
Where a buyer requires the deed, the property transfers at the registry at full declared consideration, with settlement contractually directed offshore. Venezuelan transfer taxes are paid on the true price and modeled into every exit underwrite. Marketability is never constrained to a single deal format.
International guests, booking platforms, and contracted agencies settle to a fund collection account in a U.S.-clearing offshore banking hub — jurisdiction finalized with fund counsel prior to first close. In-country receipts fund local operating costs; hard-currency surpluses accumulate offshore.
Stated honestly. The offshore-first architecture is strongest in the base case and most tested in the downside — a no-recovery Venezuela is also the one where banking rails improve least. Even there, the structure holds its shape: international guests, platforms, and contracted agencies settle offshore by design, in-country receipts fund local operating costs first, and no distributions cross the border before year 4. What the downside compresses is the size of the hard-currency surplus — not the route it travels.
Timing works in the Fund’s favor. Years 1–3 are acquisition and hold: no distributions cross the border before year 4 — hotels are dark and land produces nothing — during exactly the period when banking rails are most constrained. Material income and exits arrive in the later hold, after several years of normalization. Two milestones on that path directly ease in-country transacting: restoration of U.S. correspondent banking relationships, and Venezuela’s re-engagement with the IMF. Both are consistent with the current trajectory; neither is assumed.
DISTRIBUTIONS: OFFSHORE ACCOUNT → DEAL SPE → SPV → LPS · [QUARTERLY / EVENT-DRIVEN] · THE OFFSHORE-FIRST ARCHITECTURE IS BUILT FOR THE RAILS AS THEY EXIST TODAY — IMPROVEMENT IS UPSIDE TO OPERATIONS, NOT A CONDITION OF THEM.
Control does not rest on the GP’s continued goodwill. A board of limited partners can replace the manager, remove the GP for cause, and see every conflict and related-party fee — the powers that decide whether capital is ever trapped.
Convened from limited partners. Its authority is defined in the LPA and does not depend on the GP’s cooperation to be exercised.
On a key-man event, new acquisitions suspend automatically and the Board nominates a replacement manager, approved by a 66⅔% supermajority of LP interests. The assets never sit unmanaged.
For cause as defined in the LPA, the Board nominates and LPs approve removal.
Reviews material conflicts of interest, related-party fees, and major fund matters before they bind the Fund. No related-party arrangement is invisible to LPs.
Key changes to strategy, fees, and structure route through the Board, giving limited partners a standing voice between annual meetings rather than a one-time vote at close.
Hotel operations sit in Spearhead Hospitality OpCo under standing management contracts; The Fund is not a bet on one person’s availability.
If aggregate LP distributions fall short of contributed capital at final liquidation, the GP returns distributed carry up to the shortfall. 25% of each carry distribution is escrowed until LP distributions equal contributed capital.
Written notice before each call. The management fee accrues only from the date capital is actually called — never on uncommitted capital.
Quarterly cost-basis NAV, per-asset summaries, occupancy and revenue, and capital accounts. Audited annual financials, tax documents, and K-1s.
The Fund is retaining independent counsel, audit, administration, and tax advisors. Consistent with our disclosure discipline, no firm is named in these materials until its engagement letter is executed; names are available to prospective investors under NDA.
NO PROVIDER IS NAMED IN ANY FUND MATERIAL UNTIL AN ENGAGEMENT LETTER IS EXECUTED; ON RETENTION, THE NAME UPDATES IN EVERY LOCATION IN THE SAME PASS.
The Fund reports on a cost-basis NAV: assets are carried at acquisition cost plus capitalized improvements, less any impairment. The Fund does not mark holdings to estimated recovery, appraisal, or scenario values. Gains are recognized only when an asset is sold. Quarterly reporting reflects this basis and does not promise mark-to-market updates.
This policy pairs with the return targets: interim NAV will not reflect the scenario table’s repricing until it is realized. When an auditor and administrator are engaged (see Service Providers), the policy is restated in their language; until then it is the Fund’s stated policy.
What follows is a structural description, not tax advice. The Fund’s tax advisor engagement is in process; no tax position — rates, credit eligibility, or the character of income — is stated in these materials until an advisor signs off. LPs should consult their own advisors.
None exists. This is the single most important tax datum for a U.S. LP, and the structure is built around it: cross-border tax exposure is managed through credit mechanics rather than treaty relief.
LPs hold one interest in the SPV; each asset sits in its own Delaware Deal SPE over a Venezuelan PropCo (see How the Fund Holds Its Assets). The intended flow-through and reporting are described structurally only.
The share-sale exit’s Venezuelan tax treatment is to be confirmed by Venezuelan counsel (see How Capital Comes Back). Asset-format sales carry Venezuelan transfer costs; the pro forma’s sell-cost assumption is intended to cover these, to be quantified as counsel confirms.
TAX ADVISOR: ENGAGEMENT IN PROCESS; NAME AVAILABLE TO PROSPECTIVE INVESTORS UNDER NDA. FULL TAX SUMMARY IN THE MEMORANDUM; LPS SHOULD CONSULT THEIR OWN ADVISORS.