Investment Strategy

Investment Objective

The Fund’s investment objective is the maximization of returns and per-share capital appreciation via investments mainly in Romanian equities and equity-linked securities.

Portfolio Analysis

The Fund has holdings ranging from 1% to 100% in a portfolio heavily weighted in the Power, Oil and Gas sectors. At inception, the Government transferred into the Fund shares in listed and unlisted securities. Some of the legacy holdings are still part of the Fund’s portfolio.

There are no restrictions on which sectors the Fund can invest in, or on the amount which can be invested in any individual sector.

Active Management

In the short to medium term, our key priority is to unlock the long-term value of the underlying portfolio holdings through active management. A primary focus will be to ensure that strong corporate governance principles are followed by portfolio companies which in our view will benefit both the underlying companies and other stakeholders. Some of the actions through which value can be unlocked, include:

  • Introducing proper corporate governance practices and streamlining decision-making processes for the underlying portfolio companies.
  • Working to ensure proper corporate governance standards in the activity of the underlying companies through the Fund representation on their Boards of Directors.
  • Advising portfolio companies’ management on improvement measures to increase efficiency, profitability and transparency of state-controlled companies.
  • Bringing foreign expertise and additional financing to portfolio companies.
  • Further improving transparency in the Fund through improved disclosure related to unlisted portfolio companies.
  • Supporting and advising management on planned IPOs and SPOs of the underlying state-controlled companies.

We are firm believers that the listing of state-owned companies and secondary public offerings of these companies will be beneficial to the Government, the Romanian capital market, and ultimately the shareholders of the Fund. The Fund Manager is committed to doing everything in its power in this regard and will support all appropriate initiatives of the Romanian Government to privatize the state controlled companies.

More details on the Fund’s investment and performance objectives, investment limits and restrictions etc., can be found in the Fund’s Investment Policy Statement.