Romanian Proprietatea Fund Hldrs May OK Franklin Templeton’s Offer In July

Franklin Templeton Investments won the auction to select the manager of Fondul Proprietatea, against the other bidder, Morgan Stanley Investment Management.

Daniela Lulache, the general manager of the fund, Monday said that, if shareholders approve Franklin Templeton as the fund’s manager, the contract will most likely come into effect in September-October, but will depend on fulfilling certain conditions.

One of the conditions would be that Franklin Templeton would establish and authorize a subsidiary in Romania.

If the fund’s shareholders agree Franklin Templeton’s offer, the fund will hold another shareholders meeting in September to name the US-based assets manager as the fund’s manager.

Lulache also said that Franklin Templeton’s offer include a fee of 0.1% for the fund’s management and a 0.379% fee for investments. The fees are applied to the net asstes value, but after the fund’s listing on the bourse, the fees would be applied on the market value, Lulache also said.

According to the manager selection documentation, the new manager will also assure the listing procedures of Fondul Proprietatea on the bourse.

The idea to select an international manager for Proprietatea fund was introduced since the fund’s setup in 2005, but the selection process began only in 2008.

Fondul Proprietatea was established in 2005 to compensate Romanians whose properties were confiscated during the communist era. The fund owns shares in nearly 90 companies, including the likes of Transgaz, Transelectrica, Alro, Romgaz and several power distributors.