EnglishTrue "pearls" of the Bucharest Stock Exchange, the financial investment companies (SIFs) are attracting attention from managers of the new pension funds, which are interested in increasing their exposure to some of the most valuable companies that the SIFs hold in their portfolios. The possible increase of the minimum allowed stake for SIF shareholders from 1% to 5% and the possible change in their form of management are making these companies extremely attractive for pension fund managers, who are in their early operations and they have all the time in the world to wait for the rewards of the investment in the FICs.
"It is very difficult for an institutional investor operating on the Romanian market to ignore the FICs because their portfolios are extremely attractive. It is often more attractive to get exposure to key sectors by buying shares in the SIFs, because they already own the stocks that we are interested in", said Dorin Boboc, investment manager with the Allianz Ţiriac pension fund management company, in an interview for Bursa.
"For instance, we thought it would be cheaper to invest in SIFs to get exposure to the banking sector than to do so directly, especially since the SIFs are providing us with exposure to BCR, in which we can"t acquire shares directly at the moment. The SIFs are currently trading at a discount compared to the fair value of their holdings. This means that we are buying better value at a lower price than the real price. The last time we calculated this price, the discount was 50%", said Dorin Boboc, referring to the banking stakes of the five financial investment companies which control approximately 30% of BCR and up to 25% of BRD.
The head of investments of Allianz Ţiriac Pensii Private claims that the interest in the FICs is also fueled by the examples of the neighboring equity markets and of the way that the companies similar to the Romanian SIFs evolved on those markets: "If we look at neighboring countries, we can see that they had similar companies, but in the end they were taken over and dissolved. Most of the time, investors benefited from the dismantling of those companies. We think that sooner or later, the SIFs will see their efficiency improve one way or another. We are not saying that this will happen by having them be taken over, this is just one of the possible scenarios".
The scenario of the takeover of the SIFs has been the center of a heated debate, especially in the last year and a half, during which time a group of senators has been trying to pass a law that would increase the holding threshold in the SIFs to 5%. The opponents of the project warn that the increase or the elimination of the threshold would lead to the takeover of the SIFs, which hold large chunks of the Romanian economy.
"I don"t think that the 1% threshold makes sense anymore. This threshold idea makes one think of a mutual fund, which belongs to everyone and to no one at the same time and which is managed for the good of everyone. Perhaps this idea worked at one time, but I doubt it is still needed now", said the investment manager of Allianz Ţiriac. He added: "A SIF should not be considered as a good of the entire people, but rather as a company that needs to be profitable for its shareholders. Why should we raise legal hurdles to hinder the operation of a company that wants to become profitable for its shareholders?", said Dorin Boboc rhetorically.
He said he would not favor the elimination of the holding threshold in one fell swoop, but rather gradually: "It should go from 1% to 5% and then we will see what happens. We believe in the SIFs in the medium and long run, and we have patience".
Allianz Ţiriac Pensii Private manages the 2nd pillar pension fund AZT Viitorul Tău (mandatory pension funds), which has net assets of 734.66 million lei.
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