US hedge fund Elliott, controlled by billionaire investor Paul Singer, has reduced its stake in Romanian investment fund Fondul Proprietatea to under 10% following the fund’s recent share buyback offer.

Two investment vehicles controlled by Elliott, namely Manchester Securities Corp and Beresford Energy Corp, currently own some 685 million Fondul Proprietatea shares, representing 7.34% of the fund’s capital and 7.86% of the voting rights. In November 2017, Elliott owned over 1.3 billion Fondul Proprietatea shares, namely 12.94% of the fund’s capital and close to 15% of the total voting rights.

Thus, in the last three months, Elliott sold about 618 million Fondul Proprietatea shares worth over EUR 120 million. The edge fund unloaded shares both in the buyback offer Fondul Proprietatea carried out in February as well as directly on the Bucharest Stock Exchange.

In 2015, Elliott was Fondul Proprietatea’s biggest shareholder, with a stake of over 20%. The US hedge fund bought most of its shares before Fondul Proprietatea’s listing and in the first year after listing, when the shares were trading at a big discount to their fair value.

Elliott then pushed the fund’s manager, Franklin Templeton, to sell some of the most important holdings and distribute the cash to the fund’s shareholders. The strategy has led to an increase in Fondul Proprietatea’s share price and brought Elliott big profits.

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editor@romania-insider.com

(Photo source: Wikimedia Commons, Copyright by World Economic Forum. Photo by Remy Steinegger)