Will state-owned companies improve much their performance once they are part of the Fund’s portfolio?.How will FSDI provide an additional source of capital for investment in Romania?.Hard to understandĪurelian Dochia summarizes the unknowns about the FSDI’s operation as follows: Market perceptions could worsen this way the costs of financing the government debt, all the more so as state finances will no longer benefit from the dividends of its profitable companies. It will be obvious to everyone that the Fund is a public entity and analysts will consider the fund’s debts as a quasi-public debt,” adds Aurelian Dochia. „ The only justification for creating the Fund that I understand is the one of establishing a vehicle with the capability to borrow from the financial markets, without the loan being registered in the public debt. „I confess that I have never been able to understand the logic of establishing a new institution with a pompous name of “Sovereign Development and Investment Fund,” says Aurelian Dochia ( photo). „You do not need a sovereign fund to use the profit of companies,” remarks Mircea Cosea. The definition of investment policies, as well as the resulting objectives, are left to the discretion of the Supervisory Board members, namely the entity that will represent the state – sole shareholder in the „general shareholders assembly” and will approve the respective policies. d) sell, acquire and maintain financial instruments in its own portfolio, in accordance with its own investment policies,” the draft memorandum of association also says.c) sell shares from its portfolio, according to the law.b) participate in financing companies in which it is a shareholder by contributing to the increase of the share capital, loans or other types of financing.a) establish companies as sole member or in joint venture with other partners, in any company form.„To accomplish its main objective, FSDI can: This is the only indication of the Fund’s strategy, copied in the memorandum of association in the draft law.
„FSDI aims both to develop and finance, from its own resources and attracted funds, cost-effective and sustainable investment projects in various economic sectors, by direct contribution or through other investment funds or companies, by itself or jointly with other institutional or private investors, as well as to manage its own financial assets, to obtain profit,” says the draft memorandum of association quoted. Such objectives are funded from the budget,” Aurelian Dochia also says.
„ A profit-oriented fund has nothing to do to with building a state hospital. Mircea Cosea and Aurelian Dochia remind that motorways and hospitals are not profitable ways of capitalizing on resources. The idea that the sovereign fund would finance the construction of motorways and hospitals is improper for an investment fund whose financial strength resulted from its own investment is not defined. In Romania, the state should provide the infrastructure and focus on the much-delayed public investment, provide an environment favourable to business and investment, competitive at the international level, rather than look to play an active role in business and in commercial or financial operations„, says Cornel Marian. „The state should reduce, not increase its role in the economy and business. The draft documents on the establishment of the FSDI do not specify either the FSDI policy on investing in the economy or on what kind of investment it will focus, the details being poorer than the promises of the government program.Īlso, there are no convincing arguments provided that the authorities will fulfil through FSDI their duty to stimulate the development of the economy, according to Cornel Marian (photo), partner of Oresa Ventures, a private equity investment company that has been investing in Romania since the 1990s. In this context, it is worrying „the subversive idea of selling shares of these companies, whose value will drop as they decapitalize,” says the expert.
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