Romanian investment company Evergent Investments (EVER), the former SIF Moldova (SIF2), plans to increase its investments in private equity in the following years, aiming to continue delivering higher returns for investors than the market average. The company also aims to draw new money from investors on the local capital market to support its investment strategy.

In the last ten years, the company has obtained an average annual return of 9.23%, 1.77 percentage points higher compared to the average return of the equity-focused investment funds in Romania. Its goal in the following years is to continue generating "alpha," which represents a surplus to the average performance of the local equity fund market.

"In the last ten years, we have generated an average annual rate of value growth for our shareholders of 13.2%, including the dividends distributed to them and the increase in assets behind the shares they hold. We have set the goal to be leaders on the Romanian capital market and generate benefits for all stakeholders," said Evergen Investments general manager Claudiu Doros in a press conference.

"Evergent Investments' strategy has been primarily aimed at increasing the performance of the listed portfolio, with its two pillars - financial-banking and energy-industrial, which has become the main source of profit and resources for new investments. With the backing from the current Board of Directors, and taking advantage of the recognized expertise and experience of its members, we have started and continue to courageously invest in private equity, especially agribusiness and real estate," Doros explained.

In the agribusiness sector, Evergent Investments currently owns one of the biggest blueberry farms in Romania, with close to 100 hectares cultivated, which it plans to increase to 200 hectares in the following period and, later, to 400 hectares. The farm produces blueberries that are sold mostly abroad, in countries such as the UK and Germany, but has also signed partnerships with local retailers for distribution in Romania.

In the real estate sector, the company focuses mainly on the residential segment. Last year, it completed a 6-block project in Bucharest's Baba Novac area and started a new project – Atria Urban Resort, located in northwestern Bucharest (Soseaua Chitilei). The company is also preparing to launch a new real estate project in Iasi, the second-biggest city in Romania, and is working on the permits for other projects to be launched in the future.

"We plan to increase the private equity investments towards 40% of our assets targeting projects that can generate returns of over 15% with an average risk profile," said Claudiu Doros.

Evergent Investments is also looking at other sectors for private equity investments, mainly those that could benefit most from the EU's post-pandemic recovery funds.

As for the evolution of the EVER shares on the Bucharest Stock Exchange, the company's management aims to bring down the discount between the share price and the net asset value per share. "Reducing the discount represents the market recognition of our efforts. The discount should reflect at most the liquidation value of a company, some 15-20%. However, I believe that it can also come close to zero, or the shares could even trade at a premium," Doros stated.

Evergent Investments currently has the highest market capitalization of the five investment companies (SIFs) created during Romania's mass privatization program in the mid-90s. Its market capitalization is RON 1.38 bln (EUR 283 mln), as of March 8, 2021, while its net assets stood at RON 2.06 bln (EUR 422 mln) at the end of January. The discount between the share price and the NAV per share is currently 34%.

The company's management plans to bring down the discount through a stable dividend policy and share buyback programs, a strategy successfully adopted by local investment fund Fondul Proprietatea's manager Franklin Templeton in recent years.

In the last ten years, Evergent Investments has paid dividends totaling EUR 150 mln to its shareholders while doubling the total value of assets under management to RON 2.2 bln (EUR 450 mln). The company's investments in the last ten years totaled EUR 400 mln.

editor@romania-insider.com

(Photo source: the company)