Fondul Proprietatea risks becoming completely irrelevant in size and operationally unsustainable, if future portfolio capitalizations are not replaced with new investments that produce value for shareholders, said Andrei Cionca, the permanent representative of the partnership between IRE AIFM HUB in Luxembourg and Impetum Management (ROCA FP).
Fondul Proprietatea shareholders are convened on September 29 to determine what happens to the Fund’s management: appointing IRE AIFM HUB as administrator, canceling the current selection process, appointing a new administrator or extending Franklin Templeton’s mandate, according to Financialintelligence.
The partnership between IRE AIFM HUB in Luxembourg and Impetum Management (ROCA FP), designated as the preferred candidate by the Board of Representatives, is at the end of a rigorous selection process, which began in September 2023 and took almost two years. The process, coordinated by the Board of Representatives (BR) with the support of prestigious international consultants, aimed to select a new Fund manager and identify a new strategy. From the beginning, shareholders explicitly expressed their desire for a valid and sustainable strategy, capable of ensuring the Fund’s relevance and sustainability in the long term. In this context, the ROCA FP team – the only one with a Romanian component involved in a project of such magnitude – proposes a direction based on development and diversification, in full accordance with the shareholders’ requests, according to company officials.
“We have a unique opportunity ahead, namely that through this change in FP’s strategy we can create an important player in the Central and Eastern European market. There is a huge need for capital in the Romanian and Central and Eastern European economies that is not being served. We do not have capital providers that meet the needs. The need is much greater than the supply of capital, and Fondul Proprietatea comes at the right time, having behind it all the categories of investors that it can address, retail investors, institutional investors, sovereign funds, etc. My opinion is that this fund, if it maintains its size and if it understands its new strategy and also becomes sustainable in the medium and long term, will be an open door for all categories of investors. The fund manager is from Luxembourg and has all the capabilities to manage such a complex project and, on the other hand, we have a local team that can act directly and can help implement this strategy”, said Andrei Cionca.
The transformation of Fondul Proprietatea is conceived as an evolution in the way listed capital is managed, starting from an entity oriented exclusively towards divestment towards an active investment structure, capable of offering competitive annual returns to investors, in the long term, and contributing to Romania’s economic future.
“We aim to move from a controlled liquidation structure, as the Fund currently is, towards an active investment structure, capable of offering annual results to investors, in the long term, and contributing to Romania’s economic future. The proposed strategy aims to transform the Fund into a bridge that creates connections between capital sources and the need for capital in the market. We open new investment opportunities by facilitating access to the market for unlisted companies with potential,” added Andrei Cionca.
Fondul Proprietatea needs a change of strategy to remain relevant. The selected Roca FP team proposes a long-term strategy, built to reposition Fondul Proprietatea as an investment engine and catalyst for the Romanian economy. Currently, the current strategy is already showing signs of no longer generating value for shareholders, while the private equity market in Romania remains insufficiently explored, although it has the potential to offer superior returns, contributing to the development of the economy.
If this does not pass the shareholder vote, the continuation of the current liquidation strategy is emerging – with the risk of losing relevance and the future disappearance of dividends, argue Roca experts.