Eight of the largest international financial institutions are in the race for managing the four billion-euro assets of the Property Fund (Fondul Proprietatea). Yet their capacity to efficiently manage this money can be doubted considering some of them have been at the state's mercy lately or have had to restructure due to the financial crisis.
The former investment banks that wreaked havoc on Wall Street and caused the international turmoil are now selected by the Romanian state, which will pay fees to them to efficiently manage the Property Fund.
Annual management fees on the asset management market stand at 1 to 2% of the value of the assets, which would lead to a 40 to 80 million-euro profit from the management operation every year for the winning company.
Eight companies submitted bids to the Commission appointed to choose the manager of the Property Fund. They include international financial sector heavyweights like ING Invest Management, Morgan Stanley, and Julius Baer. Other companies are AVIVA Global Services, BlackRock, FINAG Holding (the asset management consortium of Erste Group) and Franklin Templeton Investments.
"If the Property Fund continues ahead, it needs management and we're talking asset management here. It's true that some institutions had problems, but that does not mean there are no more people you can trust there. If we take it like this, we won't be doing anything," commented first vice-president of the Democrat-Liberal Party (PDL) Theodor Stolojan.
ING Invest Management is the investment management division of the Dutch ING group. The parent-bank got a 10 billion-euro loan from the Dutch state last year. Also last year Morgan Stanley ceased to be an independent investment bank and became a bank holding company due to losses, falling under the regulation of the Federal Reserve. FINAG Holding is the asset manageme
