F&C Investments wins $466 million Eastern Europe fund

Signing dealF&C Investments has won an Eastern European fund investment brief after the existing manager, Nevsky Capital, resigned due to

the changing political and economic environment.

F&C is also to terminate its service provider agreement with Nevsky, which covers marketing, compliance and back office, from June 30, 2014, when it expires.

A statement says Nevsky’s resignation is due to recent changes in the political and economic environment in Eastern Europe and the impact this has had on the effectiveness of the investment process in those markets.

The Eastern European Fund is a sub-fund of Traditional Funds plc, which is an investment company listed in Ireland and set up by Thames River Capital.

F&C acquired Thames River in 2010 and Nevksy Capital was spun out of Thames River.

The board of the fund, The Eastern European Fund Board, has appointed F&C Investment’s Eastern European team led by Gareth Morgan and the move takes effect from April 30, 2014, subject to regulatory approval.

Morgan, along with Kristof Bulkai and Claire Franklin, manages a dedicated Russian fund and other global emerging market strategies. 

The Dublin-based Ucits fund has $466 million of assets (€336 million) and seeks capital growth by investing in listed Eastern European companies or companies with a significant exposure to the region that are listed elsewhere.

Steve Ilott, co-head of investments, F&C Investments says: “In the near term, investors remain at the behest of news headlines from the region.  However, in the absence of a sustained conflict, Eastern Europe provides attractive valuations and exciting opportunities for growth in banking, infrastructure, energy and domestic consumption.

“Further progress on corporate governance and aligning the interests of minority shareholders also has the potential to help in closing the current valuation discount applied to the region by investors.”

F&C also says today that it plans to introduce a “highly competitive” institutional share class for existing and new clients with no performance fee.

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