“We have been accessing emerging markets via investing in closed-end funds since the early 1990s, and have over the years invested directly in closed-end funds listed in several European markets,” Christopher Weaver, director and fund manager with City of London Investment Management, told Ziarul Financiar.
“We are a passive investor and don’t get involved in the management of the funds we are investing in. We do not place management representatives on the Boards of our investments,” Weaver added.
The company has assets worth 3.54 billion pounds under management from institutional clients, specializing in emerging market investments.
City of London IM was yesterday reported with a 5.85% stake in Fondul Proprietatea, thus becoming the biggest foreign institutional shareholder in the fund. City of London is one of the over one hundred institutional investors holding a combined 23.7% in Proprietatea’s capital.
The statement by City of London’s official shows foreign investment funds see an investment opportunity in Fondul Proprietatea and that they bought shares to profit from the over 50% discount at which they are trading on the bourse against the net asset.
City of London bought only a small part of the stake of 802.2 million shares, accounting for 5.58% in the fund, directly from the stock market in Bucharest. A stake of 668.2 million shares ended up being owned by City of London after the company bought 668,200 warrants issued by UniCredit Bank, backed by 1,000 Fondul Proprietatea shares each.
While it bought just a small part in Fondul Proprietatea’s shares from the domestic market, the British company has been watching Romania for more than a year and has been buying into Proprietatea constantly since it was floated, according to the monthly reports on its website.