Fondul Proprietatea, a Romanian closed-end fund managed by Franklin Templeton Investments, has been admitted to trading today on the Specialist Fund Market of the London Stock Exchange (LSE) by means of global depositary receipts (GDRs).
With a robust track-record of creating shareholder value, Fondul Proprietatea consists of a portfolio of Romanian equity securities with assets of over EUR2.9 billion and has been listed on the Bucharest Stock Exchange since January 2011.
The Fund was originally setup in 2005 to compensate Romanians whose properties were seized during the communist regime. Following an international tender process, Franklin Templeton Investment Management Limited was appointed in September 2010 as Fund Manager and Sole Director of the Fund. The Fund currently invests in Romania’s most profitable and largest listed companies such as OMV Petrom (the largest oil producer in Romania), Romgaz (the largest gas producer in the country) and in large unlisted state-controlled infrastructure assets such as Bucharest Airport and the port of Constanta. The Fund also offers exposure to Hidroelectrica, one of the largest European hydro-generation companies, as well as to natural commodities monopolies such as the Romanian salt mining company Salrom.
Dr Mark Mobius, Executive Chairman, Templeton Emerging Markets Group, says: “Today marks a truly historic milestone for Fondul Proprietatea and Franklin Templeton, given that we have worked relentlessly towards this achievement in the past few years. The Fund has the potential to become one of the most visible and attractive closed-end funds listed in London, given its size, portfolio and discount to NAV. Moreover, we are convinced that the secondary listing of the Fund on the LSE will increase the visibility of the Romanian capital market on the international scene, will facilitate access of a broader base of foreign investors to the country, and will act as a catalyst towards unveiling Romania’s many other investment opportunities. We have witnessed a huge interest for Romanian companies during our numerous roadshows to raise awareness of the Fund abroad and we are confident that the Fund’s listing on the LSE will increase the appetite of investors for Romanian equities.”
Greg Konieczny, CEO and Fund Manager of Fondul Proprietatea, says: “Fondul Proprietatea is ideally placed to offer investors exposure to a diversified range of Romanian listed and unlisted equity securities that should benefit from Romania’s steady growth perspectives and strong economic fundamentals. The valuations of Romanian companies are low compared to surrounding countries and we see this as the perfect timing for investors to access Romania given that it trades at one of the lowest price/earnings ratios and offers the highest dividend yield compared to other countries in Central and Eastern Europe. The low correlations between developed markets and Romania, which is a Frontier Market country, indicates diversification benefits for both short- and long-term investors. Our focus as Fund Manager continues to be to maximise returns for the Fund’s shareholders, increase the NAV per share, and decrease the discount at which the Fund’s shares currently trade. In addition to regular buy-back programmes, cash distributions, and a proactive investor relations programme, we view today’s listing on the LSE as an integral part of our discount reduction mechanism.”
Xavier Rolet, CEO, London Stock Exchange Group, says: “We are delighted to welcome Fondul Proprietatea on its first day of trading on the London Markets. As one of the most significant investment funds in Europe, the success of the listing is a reflection of the strength of the Romanian economy, which has one of the highest growth rates in the EU. This is a significant milestone which will serve to further enhance the fund’s visibility and access to global capital as well as highlighting Romania’s ability to attract the world’s largest investors without compromising the development of a domestic shareholder base.”