Legal nature of a combined PMIF

PMIF is not a legal entity, it is a property complex managed by a company with a license for management of funds supervised by the Bank of Russia The main document ("statute") of the PMIF is its fiduciary management rules which are subject to agreement with the Specialized custodian of the PMIF - an agreement between investors of the PMIF and the Management company that determines the PMIF’s major operational conditions: a list of allowed assets, restrictions on powers of the Management company, participation of unit-holders in management and other Unit holders of a PMIF are owners of investment units of PMIF and dispose of them as an ordinary security, as well as exercise the rights granted to them by investment units (by analogy with the rights of shareholders in a JSC) in accordance with the PMIF fiduciary management rules, including the right to receive income on investment units (analog of dividends) According to Clause 3 Article 15 of the Federal Law "On investment funds" the property contributed to a fund shall not be subject to foreclosure on the debts of unit holders (vendication)*, including in case of insolvency (bankruptcy) of the unit holders. The investment units of the PMIF, but not the contributed property, shall be foreclosed. In the event of insolvency (bankruptcy) of a unit-holder, investment units belonging to him shall be included in the bankruptcy estate *In the event of bona fide acquisition/possession of property

Economics of the PMIF

A PMIF is Russia's only mechanism of tax-free reinvestment of profits specially envisaged by lawmakers to increase the volume of money working in the economy and ensuring creation of added value All income of a PMIF is not subject to profit tax as according to the Tax Code of Russia. A PMIF is not a legal entity and is not a payer of this tax. Due to the absence of profit tax, the entire income from the PMIF can be fully allocated to development of assets available in the PMIF or acquisition of new assets or financing of other projects. This feature makes the PMIF a better solution compared to "standard" options of owning and managing assets and reinvestment of income. Investor is taxed on interim income (similar to dividends) and termination of the fund

Asset protection and risk management

Assets (property within) a PMIF are separated from the property of the Management Company and other PMIFs managed by the Management Company It is considerably complicated to access information in mutual funds: who is a holder of investment units, composition of assets of a mutual fund These features determine a special risk model of PMIF, which favourably differs from risk models of other popular forms of holding and working with assets.

Asset management and control

Unit holders do not directly dispose of the PMIF assets, this is done by the Management Company in accordance with the fiduciary management agreement - PMIF Fiduciary Management Rules. However, the power of the Management Company to dispose the PMIF assets is limited and in a number of cases - significantly: general requirements for a reasonable and bona fide fiduciary management of PMIF's assets the current legislation of Russia and regulations of trust management of PMIF supervision by the Bank of Russia the necessity of agreement of all transactions with the Specialized custodian of the PMIF (it checks legality and economic justification of the transactions and their correspondence to the PMIF’s fiduciary management rules) decisions of the Investment Committee on concrete transactions. The Investment Committee, which is formed from holders of investment units of a PMIF, plays a key role in work of a combined PMIF. The Investment Committee controls and restricts activities of the Management Company in managing the fund's property.

PMIF fiduciary management rules

The fiduciary management rules of the combined PMIF shall specify: PMIF infrastructure: management company, specialized depository, registrar, evaluators the term of operation of PMIF, the term of validity of Fiduciary Management Regulations assets that may form property of PMIF (investment declaration) terms of powers, formation and decision-making by the investment committee limitations of the PMIF’s Managing Company's activity competence and decision-making procedure of the general meeting of investment unit holders property which can be transferred as payment for investment units the amount of infrastructure remuneration, PMIF expenses and their limits. Fiduciary management rules of combined PMIFs shall be developed by the Management Company with participation of future investors (unit holders), agreed with the Specialised Custodian of the ZPIF and accounted in the register of unit investment funds of the Bank of Russia https://cbr.ru/RSCI/registers/.

Unit holders of a mutual fund

The law establishes certain requirements for holders of investment units of combined PMIFs as well as for the procedure for acquiring them. Investment units of a combined PMIF may be held only by persons: meet the requirements of the Federal Law on the Securities Market, by-laws and internal documents of the Management Company/Broker to be recognized as qualified investors and recognized as such by the Management Company or Broker are qualified investors by operation of law, including by virtue of the Federal Law On the Securities Market (banks, brokers, managers and others) Investment units of a mutual investment fund may only be issued by qualified investors and they may also be purchased on the secondary market and a transaction on the secondary market may be made through a broker. However, there are certain exemptions for investment units of the combined closed unit investment fund, for more details see the presentation: (downloadable pdf presentation in Russian and English, depending on which variant a person is in)

Qualified Investors

The management company recognises the investor as a qualified investor when issuing the investment units of the combined closed-end unit investment fund. When trading in investment units of a combined closed unit investment fund on the secondary market, the investor is treated as a qualified investor by a broker A legal entity is recognised as a qualified investor if it is a business entity and it meets any of the following requirements - at least RUB 200 million of equity capital (total of the capital and reserves section of the balance sheet) - has concluded transactions with securities and (or) concluded contracts, which are derivative financial instruments, during last 4 quarters on average not less than 5 times per quarter, but not less than 1 time per month. The aggregate price of such transactions (contracts) must be at least RUB 50 mln. - has a turnover (proceeds) from sales of goods (works, services) according to the accounting reports for the last completed reporting year of at least RUB 2 billion - not less than 2 billion RUB in assets according to the accounting records for the last completed accounting year
Qualified investors are individuals:
- has assets of at least RUB 6 million: cash in credit institutions in RUB or foreign currency (at the exchange rate set by the Bank of Russia) or securities; - the total value of securities owned by this person and (or) the total amount of liabilities from contracts that are derivative financial instruments and that have been entered into for this person's account must be at least RUB 6 million - has worked for at least 3 years for a Russian and/or foreign company that has conducted securities transactions and (or) executed contracts that are derivative financial instruments, or for at least 2 years for a company with qualified investor status - has conducted transactions with securities and (or) concluded derivative contracts during the last 4 quarters with frequency of at least 10 times a quarter on average and at least 1 time a month for not less than 6 million rubles. - has higher economic education (the diploma was issued by a higher education institution that at the time of issuance carried out certification in the field of professional activity on the securities market), or has any of the qualification certificates: financial market specialist, auditor, insurance actuary, or has any of the certificates: "Chartered Financial Analyst (CFA)", "Certified International Investment Analyst (CIIA)", "Financial Risk Manager (FRM)".

PMIF Infrastructure

Management Company Conclusion and execution of transactions, accounting of PMIF property, interaction with counterparties and other persons in managing PMIF, holding general meetings of unit holders and meetings of investment committees
Specialised Custodian control over management of PMIF property, coordination of transactions and expenditure operations, safekeeping of PMIF property, coordination of Trust Management Rules, back-up accounting of PMIF property and operations
Registrar maintenance of the register of the investment unit holders and submission of information and the said register
Bank Maintenance of accounts and execution of payment orders in relation to PMIF funds
Evaluator Valuation of PMIF property prior to purchase and at least once every 6 months

‘Geocapital’ Management Company Portfolio

Name Brief description Start of project Investment – mlns. Rubles
Rental PMIF «Zolotoy kolos» Project in the Vladimir Region (Agricultural Land Plot) 2011 457
Rental PMIF «Chernozemie» Project in the Penza Region (Agricultural Land Plot) 2012 300
Rental PMIF «Agrarny» Project in the Penza Region (Agricultural Land Plot) 2014 790
Mortgage Coverage «ISU-GK-2» Implementation of a project in Moscow 2014 2 750
Mortgage Coverage «ISU-GK-3» Implementation of a project in Moscow 2014 23 665
Real Estate PMIF «Kvadratny Metr» (For qualified investors) Project in the Pushkinskiy Region in Moscow Region (Agricultural Land Plot) 2016 375
Real Estate PMUF «UFA EXPO» Management of shopping and exhibition centre «VDNH» Republic of Bashkortostan, Ufa 2016 6 000
Combined PMIF Property management in Moscow and the Moscow region, debt collection 2019 1 936
Combined PMIF Asset Management in the Republic of Bashkortostan 2019 601
Combined PMIF Business management in the Chuvash Republic and the Samara region 2019 137
Limited Liability Company "Management Company" GeoCapital "
450077, Republic of Bashkortostan, city of Ufa,
Dostoevsky street, house 100, floor 2
+7 (347) 246-84-24 info@geocapital.ru
121357, Moscow city, Vereiskaya street, building 5,
floor 2, room 1, room 27
+7 (495) 269-00-19 office-msk@geocapital.ru