What Templeton does for 15m euros at Fondul Proprietatea

The first Fondul Proprietatea budget put together by its new manager, Franklin Templeton, is conservative compared with market expectations and with the around 15 million-euro per year fee that Templeton will collect for managing the 3.5 billion-euro assets.

Investors have hoped that the coming of UK-based Franklin Templeton to the helm of Fondul Proprietatea will mean an end to passive asset management and to assets being kept in a bank, and that the Fund will start to invest on its own. The draft budget for 2011, as put together by Franklin Templeton, reveals, however, that dividends and interest rates will continue to be the main source of revenue.
“The budget is very conservative and, strictly as a piece of information, it can be perceived negatively. However, one needs to keep in mind that Templeton does not yet hold full control of the Fund, and that the priority for a manager is to manage the relationship with the state at Petrom, Romgaz and the two big energy companies,” says Ovidiu Fer, analyst with Czech brokerage Wood&Co, a 2.7% shareholder in the Fund. For next year, the Fund has budgeted a 207 million-RON net profit, 6% more than this year’s budget, and nearly 300 million RON in revenues, 8% more than 2010 estimates.
The draft budget will be voted on by shareholders during the General Meeting of November 29th.