Romania Lists Fund in London to Lure Investors

Fondul Proprietatea, a closed-end fund managed by Franklin Templeton, is set to be listed on April 29 on the London Stock Exchange, LSE, in a move to attract new investors to Romania.

Fondul will pay some 4.2 million euro for its secondary listing on the Stoke Exchange, according to the listing prospectus.

The found, which Romania's government set up in December 2005 to compensate Romanians whose properties were seized under Communism, could offer good returns.

It holds minority stakes in 83 companies, including the energy groups Petrom, Transgaz and Transelectrica.

The US fund group Franklin Templeton was awarded the mandate to manage the fund in 2010.

Fondul Proprietatea holds assets worth about ?3.58 billion and its listing is seen by the government as a way of bringing new investors into the country.

Institutional investors own 74 per cent, and private individuals own 26 per cent of the Fund. The Romanian government - which hold 39 per cent of shares - owns a minority stake of 0.04 per cent after reallocating its initial holdings to eligible claimants.

The move to establish a London listing comes as Romania's stock exchange itself is trying to increase investment from foreign institutions.

"Achieving emerging-market status is most likely to bring more inflows of funds and trigger more investment into Romania," analyst Constantin Nita says.

Romania is largely dependant on foreign borrowing to finance its investment plans.

In recent years, it has lost its position as one of the main recipients of foreign investment in Eastern Europe, following a deep recession in 2009 and 2010.

Foreign Direct Investment, FDI, last year stood at only 2.4 billion euro, well down from the record high of 9.1 billion...