The American fund made the first investments in Fondul Proprietatea back in 2008 when shares were traded on the grey market at bargain prices.
Proprietatea fund is a very important investment target because of the significant stakes it holds in the largest Romanian energy companies, a strategic sector for the local economy.
U.S. Franklin Templeton, which has been managing the fund for about a year, has sought to bring on board strong shareholders in order to have them as allies when the Romanian state runs out of shares.
Just as the Romanian state is preparing to exit the fund, the first official reports on who controls Fondul Proprietatea have started to emerge, after such information was only thrown around in the form of rumors until not long ago.
The latest report on the shareholding structure issued by the fund reveals that American investment firm Manchester Securities in New York is the largest institutional shareholder of the Fondul Proprietatea, with 6.61% of the subscribed and paid up capital at the end of September.
Manchester Securities is controlled by hedge fund Elliott Associates. Elliott Associates and Elliott International are two hedge funds with over $10.5 billion in assets, managed by American company Elliott Management Corporation.
The two funds are named after their founder, Paul Elliott Singer, who is also CEO, general manager and investment manager of Elliott Management Corporation.
Three months ago, on June 15, British asset management company City of London Investments announced on the Bucharest stock exchange it held around 5.85% of the fund directly and indirectly.
If between June 15 and September 30 the UK firm did not change its holding, for the first time in nearly six years since the establishment of the fund, the Romanian state became, though not for long, the third largest shareholder, with 5.01% of the capital.
Analysts expect the Romanian state will run out of shares by allocating compensations over the course of October.
Elliott funds are low profile investors, with their web accessed only via a password by shareholders or investors. They are speculative funds seeking yields where large investment funds, such as American-managed Vanguard and Fidelity, would not venture.
The investment strategy of such funds is not restricted by the country rating, allowing them to invest in less liquid companies.
(English version by Daniela Stoican)