Renaissance to launch Ucits Russian infrastructure fund
Emerging market specialist announces plan to restructure existing closed-ended fund into a Ucits-compliant product to increase attractiveness and liquidity.
by Chris Sloley on Jul 23, 2012 at 12:02
Renaissance Asset Managers has unveiled plans to restructure its closed-ended Russian infrastructure fund in order to make it more attractive to investors.
Initially launched as a closed-ended fund, the firm has now forwarded plans to improve the liquidity of its Renaissance Russian Infrastructure Equities (RIEL) fund and aims to develop it into a Ucits-compliant fund.
The REIL fund was launched in July 2011 with the intention of offering investors access to large-scale infrastructure development in Russia and the Commonwealth of Independent States.
Formal approval of the alteration of the fund into a Ucits fund is expected to be achieved at an Extraordinary General Meeting of the RIEL board in October 2012. If this is achieved, the restructuring of the fund is then set to be completed by June 2013.
Speaking at the time of the launch, Renaissance AM CIO Plamen Monovski said the fund was designed to take advantage of multi-billion dollar infrastructure projects expected in the region.
This includes long-term, massive investment in road and transport networks, as well as shorter-term developments surrounding major sporting events, such as the 2014 Winter Olympics and the 2018 FIFA World Cup.
Under the restructuring proposals, the majority of current investments in the fund would be transferred to an open-ended, Ucits version of the fund.
Investments which do not qualify for the Ucits model will be retained by Renaissance and the company will seek to restructure or dispose of them in order to ensure maximum value is obtained.
Commenting on the restructuring, David Clark, chairman of the board on the RIEL fund, said: ‘We think that there remains significant potential for Russian infrastructure investment to deliver superior returns.’
‘However, it has been clear for some time that in the current market conditions, the existing structure does not provide the best vehicle for ensuring shareholders benefit fully from the value creation we are seeing and expect to continue to see.’
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