Romanian property restitution fund Fondul Proprietatea (FP) managed to raise its net asset value (NAV) per share in the 12 months from July 1, 2015 - June 30, 2016, but it failed to meet its second performance objective of reducing its discount to below 15%. 

Set up to compensate Romanians whose properties were seized in the Communist era, FP has a portfolio of 45 companies, including some of the largest firms in Romania’s energy sector. 

Speaking at a press conference in Bucharest on October 31, fund manager Greg Konieczny said it had not been possible to meet the 15% objective. The discount was in the range of between 26% and 40% for most of the year, and is currently at around 31% for ordinary shares, and 28% for GDRs. 

“We have taken a lot of actions to fight the discount,” said Konieczny, listing the distribution of around RON800mn (€177mn) through cash distribution and buybacks, active promotion of the fund and the listing of FP’s GDRs on the London Stock Exchange, which attracted more investors who had not previously looked at the fund. 

On the other hand, FP’s NAV increased by 1% per share during the period. 

“The main contributions [to higher NAV] were from state-controlled unlisted companies - Hidroelectrica, Bucharest Airports, Constanta Port, Salrom … the companies we are promoting as companies that should enter the stock exchange as quickly as possible,” said Konieczny. 

Meanwhile, there were negative contributors from listed companies Petrom and Romgaz, mainly because of the fall in oil and gas prices, as well as Nuclearelectrica.

Currently, the unlisted part of portfolio is 65% while the listed portfolio has been reduced to slightly above 20% as shares have been sold off recently.

“One of the key objectives is to bring the portfolio to a more liquid state - disposing of or preferably bringing to the stock exchange unlisted cos,” explained Konieczny.