Ziarul Financiar tried to get a glimpse into this best-kept secret by aggregating the information about Fondul Proprietatea’s shareholders available via the Reuters and Bloomberg terminals. Private equity funds input the information about their holdings themselves.
US hedge fund Elliott Management Corporation is the largest shareholder of Fondul Proprietatea, 15.23%, according to Reuters. It operates via two vehicles, Manchester Securities and Beresford Energy Corp, which owned 13.98% in the fund at the end of 2012 and 1.86% in it at the beginning of 2012, according to Bloomberg. Elliott is run by Paul Singer, the investor that sent Argentina into default.
The identity of the second largest shareholder is not so clear, as the data from the two sources differ. Bloomberg says it is Georgia Palade van Dusen with 6.5% at the end of December 31, 2011. Yet Reuters data show it to be Franklin Templeton Investment Management Ltd. based in Scotland, with almost 7% in the fund on June 30.
Local officials of Franklin Templeton, however, say that the Scottish company does not own any shares in the fund and the Reuters data are inaccurate.
“Franklin Templeton Investment Management Ltd. in Scotland does not own any Fondul Proprietatea shares. The investment funds of Franklin Templeton did not buy any FP shares at any time due to internal restrictions in place at Franklin Templeton preventing them from investing in FP. Franklin Templeton Investment Management Ltd. Scotland does not exist as an entity of Franklin Templeton,” Franklin Templeton officials in Romania say.
One explanation to this might be that Franklin Templeton’s name may show up in relation to the stake Fondul Proprietatea bought back and now owns.
Third largest shareholder is, according to Reuters, Royal Bank of Scotland, with 3.23% on June 30. RBS is one of the largest issuers of warrants with Fondul Proprietatea as the underlying asset. More precisely, the bank bought Fondul Proprietatea shares and packaged them into structured products, which it then sold to other international investors unwilling to invest on the stock market directly.
The biggest holder of such warrants is US group City of London. The group owns about 0.2% in the fund itself, according to Reuters reports. The funds of the group had up to 7% in Fondul Proprietatea in 2013 but reduced their stakes early this year.
Next in the shareholder ranking is the government of Romania via the Finance Ministry, which owns 2.7%.
The government owns 2.7% as a leftover from the process of compensating those who had their properties seized during the communist regime. The 2.7% are almost void of voting power.
Baillie Gifford Overseas Ltd, of UK’s Baillie Gifford group owned 1.38% in the fund as of June 30, according to Bloomberg.
Another shareholder is ING International Advisory, 0.71% on July 31 and the investment funds of East Capital, according to Bloomberg, which had 0.58% on July 31.
Fondul Proprietatea has EUR3.3 billion assets and is highly attractive especially to foreign funds: it owns stakes in the most important companies in the energy sector, OMV Petrom (SNP.RO), Romgaz (SNG.RO) and Hidroelectrica, has EUR1.2 billion in cash and is in the process of selling its stock portfolio.
Market sources, for instance, say the 5 billion lei (about EUR1.1 billion) Petrom stake has been put up for sale.
The fund paid RON1.5 billion dividends in the last three years alone and bought back about RON1 billion’s worth.
(English version by Loredana Fratila-Cristescu)