September was an important month for Bulgaria AIF Fund, not necessarily because of significant portfolio activity, but because of several developments that could positively influence the fund’s future performance and the attractiveness of Bulgaria’s Golden Visa program.
These developments included the launch of our new investor platform, encouraging clarification from the Bulgarian government regarding proposed physical stay requirements, and a decision to adopt a more active investment strategy.
A New Digital Platform for Bulgaria AIF Investors
One of September’s key milestones was the launch of Bulgaria AIF Fund’s new digital platform.
Beyond its modern and visually appealing design, the new website provides clearer, more accessible information about the fund, its investment strategy, and the Bulgaria Golden Visa program.
More importantly, the platform introduces a dedicated investor login portal, allowing investors to monitor their individual investment performance.
Through the portal, investors can track their monthly performance based on the fund’s Net Asset Value (NAV), taking into account the NAV at which their shares were originally subscribed.
Encouraging News Regarding Bulgaria’s Physical Stay Requirements
Perhaps the most significant development in September came from the Bulgarian government. In response to comments submitted concerning proposed amendments to Bulgaria’s permanent residence legislation, the Ministry of Interior provided an important clarification regarding the potential introduction of physical stay requirements.
The Ministry explained that the revocation of permanent residence would not be based solely on a rigid calendar calculation of time spent outside Bulgaria. Instead, the competent authorities would be required to assess each applicant’s individual circumstances before making a decision.
As an example, the Ministry specifically referred to education abroad as a circumstance that could justify an extended absence from Bulgaria.
For international investors, this clarification is particularly encouraging.
Foreign investors frequently maintain business interests, professional responsibilities, and personal commitments outside Bulgaria. Such circumstances could provide reasonable grounds for justifying an extended absence, although their acceptance would ultimately depend on an individual assessment by the authorities.
When Would an Absence Be Established?
Another important consideration is how and when an absence from Bulgaria would be established.
The assessment of an absence is generally connected to administrative procedures involving the competent immigration authorities.
Simply crossing the Bulgarian border does not, by itself, constitute a decision to revoke permanent residence. Border Police and the Migration Directorate perform different administrative functions, and any decision concerning the revocation of permanent residence must follow the applicable legal procedures.
For Golden Visa investors, a relevant assessment could arise when applying to renew their permanent residence card, potentially around five years and eight months after beginning the investment immigration process. This period may also coincide with preparations for a potential Bulgarian citizenship application.
Importantly, the establishment of an absence would not necessarily result in the automatic revocation of permanent residence. The authorities would still be required to consider the investor’s individual circumstances.
Although the proposed legislation has not yet been finalized, the government’s explanation suggests a more flexible approach than initially anticipated. The legislation process can be followed at Законопроекти – Народно събрание на Република България .
Bulgaria AIF Fund to Adopt a More Active Investment Strategy
The uncertainty surrounding the proposed physical stay requirements also influenced Bulgaria AIF Fund’s investment decisions. While awaiting further clarification, the fund adopted a relatively conservative approach to capital allocation.
As a result, approximately 40% of the portfolio remained in cash, providing substantial liquidity but inevitably limiting potential investment returns.
With greater clarity emerging regarding the government’s proposed approach, Bulgaria AIF Fund intends to transition toward a more active investment strategy. Our objective is to allocate the majority of available capital by the end of the year while maintaining a prudent cash reserve of approximately 5–10% of the portfolio.
The remaining capital will primarily be invested in bonds issued by companies listed on the Bulgarian Stock Exchange. These instruments provide an opportunity to generate recurring income while and can be easily converted into cash.
September Portfolio Developments: ITF Coupon Income and Elana AgroCredit
Although September was relatively quiet in terms of new capital allocations, the portfolio continued generating income. During the month, Bulgaria AIF Fund received a coupon payment from ITF (ITFD), relating to its €35,000 bond position.
In addition, the fund initiated a small equity position in Elana AgroCredit (EAC), purchasing shares near their 52-week low. The investment represents a selective opportunity to gain exposure to a Bulgarian listed company at what we considered an attractive entry price.
Two New Trakia Economic Zone Bond Investments
While September may have appeared relatively quiet, the fund completed two important bond investments toward the end of the month that will be reflected in the October portfolio.
Both involve bonds issued by Trakia Economic Zone, with different maturity profiles and expected returns.
| Investment | Initial allocation | Maturity | Expected return |
|---|---|---|---|
| TIZC | €120,000 | May 2027 | Approximately 3.3% over less than 8 months |
| TIZA | €100,000 | November 2031 | Approximately 7% annually |
The first investment, with a maturity in May 2027, is expected to generate a return of approximately 3.3% over a holding period of less than eight months. The second investment, maturing in November 2031, offers an expected annual return of approximately 7%.
Both positions are expected to be increased during October as the fund continues deploying its available capital.
These allocations reflect our broader strategy of balancing shorter-duration investments with longer-term income opportunities.
Looking Ahead: October Investment Opportunities
October is expected to bring several attractive bond investment opportunities, starting with Elana AgroCredit’s new amortizing bond, maturing in 2034. Despite its eight-year maturity, the bond is particularly interesting because it repays one-eighth of the principal annually, alongside a floating coupon of 3.25% plus six-month EURIBOR, potentially exceeding 5.5% annually. By 2030, investors could recover approximately 50% of their initial capital, plus cumulative coupon income potentially reaching 18–22%, depending on interest rates and repayment dates.
We also anticipate a new Trakia Economic Zone bond issuance maturing in 2034. The final terms will determine our allocation, as longer maturities carry additional risks in an uncertain economic environment. Another expected issuance comes from ITF, although we remain cautious given proposed regulatory changes to Bulgaria’s consumer lending sector that could significantly reduce lenders’ interest income and affect their business models.
These opportunities will support our transition toward a more fully invested portfolio, while maintaining a selective approach to risk and return.
