Poland proving attractive to mutual funds
During the last two weeks, two joint ventures (CS First Boston Investment Management/PKO BP and Franklin Templeton Group/Bank Handlowy) announced intentions to set up mutual funds in Poland.
Last week, the Creditanstalt Securities/Bank Gozpodarki lywnosciowej venture became the country's second mutual fund to receive a license.
If the three groups succeed in setting up by year's end as they intend, more than $100 million could pump into the bond and equity markets.
As the majority of current investors think in the short term, Warsaw is typically a volatile market, said Wieslaw Rozlucki, president of the Warsaw Stock Exchange.
"Trust funds have a longer perspective and that is important," he said.
Leslaw Paga, managing partner at Deloitte & Touche and former chief of the Securities Commission, cautioned against too many long-term fund strategies that could, in effect, make the market less liquid.
"It's quite good, but still it's not enough," Paga said, calling for a variety of funds and investors with diverse strategies.
The Korona Trust Fund Corporation, the 50:50 Creditanstalt/BGl joint venture, will start up with $1.7 million capital.
Wolfgang Bauer, president of Creditanstalt Securities SA, said the lack of investment alternatives and lack of professional fund management for Poland's 40 million people were incentives for setting up the fund. BGl's history of financial woes did not discourage the venture.
"Maybe we have been dealing with a special class of employees, but I've had only positive experiences (with BGl)."
Krystyna Majerczyk cabowka, BGl vice president, said the fund was part of the state-owned bank's strategy to diversify structures and develop new products.
Its strengths, officials say, are its 34 brokerage houses, association with more than 1,000 cooperative banks and 30,000 customers.
Geoffrey Skipper, Korona Fund investment director, said he hopes the fund will have a $50 million asset value by year's end.
Skipper, an 13-year capital market veteran, typified his investment strategy as a cautious money-making approach.
"A 100% equity exposure is too risky, but 35% equity with the rest in fixed income or bonds is too conservative," he said.
Skipper will oversee a team of three investment advisers, one money market and three security analysts by the time investment starts in the second half of July, he said.
"My objective in the fund is to make sure they get as close to the companies as they can," Skipper said. Skipper will base his long-term, two to three-year investments on company analyses.
"It's better to concentrate and stick with it," he said. "Of course, you don't hold on to it when it goes south."
Skipper said this would be the first time he would develop close company contacts and he was concerned about volatile growth rates and sector changes.
"I want my people to understand there could be rapid changes in competition," he said.
About the mass privatization program, Skipper said: "Whether or not we get involved in mass privatization is in question at the moment."
Skipper began working in capital markets as a stockbroker for Simon&Coates, then in fund management with London-based Abbey Life. Later he handled a diversified portfolio for Esso, Exxon's U.K. subsidiary. He joined Nomura Asset Management in the early 1990s where he developed three country funds and advised on European bonds. In March he started working on the Korona Fund.
Last week, the Creditanstalt Securities/Bank Gozpodarki lywnosciowej venture became the country's second mutual fund to receive a license.
If the three groups succeed in setting up by year's end as they intend, more than $100 million could pump into the bond and equity markets.
As the majority of current investors think in the short term, Warsaw is typically a volatile market, said Wieslaw Rozlucki, president of the Warsaw Stock Exchange.
"Trust funds have a longer perspective and that is important," he said.
Leslaw Paga, managing partner at Deloitte & Touche and former chief of the Securities Commission, cautioned against too many long-term fund strategies that could, in effect, make the market less liquid.
"It's quite good, but still it's not enough," Paga said, calling for a variety of funds and investors with diverse strategies.
The Korona Trust Fund Corporation, the 50:50 Creditanstalt/BGl joint venture, will start up with $1.7 million capital.
Wolfgang Bauer, president of Creditanstalt Securities SA, said the lack of investment alternatives and lack of professional fund management for Poland's 40 million people were incentives for setting up the fund. BGl's history of financial woes did not discourage the venture.
"Maybe we have been dealing with a special class of employees, but I've had only positive experiences (with BGl)."
Krystyna Majerczyk cabowka, BGl vice president, said the fund was part of the state-owned bank's strategy to diversify structures and develop new products.
Its strengths, officials say, are its 34 brokerage houses, association with more than 1,000 cooperative banks and 30,000 customers.
Geoffrey Skipper, Korona Fund investment director, said he hopes the fund will have a $50 million asset value by year's end.
Skipper, an 13-year capital market veteran, typified his investment strategy as a cautious money-making approach.
"A 100% equity exposure is too risky, but 35% equity with the rest in fixed income or bonds is too conservative," he said.
Skipper will oversee a team of three investment advisers, one money market and three security analysts by the time investment starts in the second half of July, he said.
"My objective in the fund is to make sure they get as close to the companies as they can," Skipper said. Skipper will base his long-term, two to three-year investments on company analyses.
"It's better to concentrate and stick with it," he said. "Of course, you don't hold on to it when it goes south."
Skipper said this would be the first time he would develop close company contacts and he was concerned about volatile growth rates and sector changes.
"I want my people to understand there could be rapid changes in competition," he said.
About the mass privatization program, Skipper said: "Whether or not we get involved in mass privatization is in question at the moment."
Skipper began working in capital markets as a stockbroker for Simon&Coates, then in fund management with London-based Abbey Life. Later he handled a diversified portfolio for Esso, Exxon's U.K. subsidiary. He joined Nomura Asset Management in the early 1990s where he developed three country funds and advised on European bonds. In March he started working on the Korona Fund.
