Ever since the beginning of this year, the Romanian capital market has lost two mutual funds, while two other were dumped by administrators. The former merged with another fund, while the latter will get new management companies, yet their small size points to a merger as the solution for them to keep going.
The four funds were worth less than one billion ROL, and the investors were losing money because the administrative costs were higher than the gains. The negative record in terms of size is held by Armonia, whose net asset currently amounts to only 50 million ROL.
Real Fin Invest Company, which manages Armonia mutual fund, has tried to liquidate the only fund it was managing. It failed to reach every fund investor, so that the fund's asset is now just small change. The National Securities Commission is expecting bids from other management companies interested to take this fund over. The solution for the company that does take over this fund will most likely be to merge it with another.
CNVM has recently decided to entrust the management of Retcon Fund to Quadrant Asset Management. The fund has more than 1,600 investors that have lost 30% of their investment in the last seven months. The company that had been managing the fund since 1996 decided to get out of this business.
By mid this year, investment management company Active International decided to merge three of the funds it run, i.e. Dinamic, Junior and Clasic. The reasons behind this move were the low interest of investors for the funds that were practically pursuing the same investment strategy and the high redemption fees in effect since interests on the market were above 50%. The asset of Active Dinamic Fund, the entity created by the merger is worth less than 2bn ROL.
Only one mutual fund, BCR Dinamic, managed by Banca Comerciala Romana's investment management company, has been launched this year, although several fund managers had announced plans for new funds early in 2003. vlad.nicolaescu@zf.ro
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