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May 26, 2026
Radu Hopulele, Faculty of Finance and Banking, Bucharest University of Economic Studies
Following the Romanian Revolution in 1989, which brought down Nicolae Ceaușescu's communist regime, many affected individuals sought compensation from the newly formed democratic government of Romania for property (homes, stores, factories, cars, banks, agricultural land, etc.) that had been previously confiscated or destroyed.
In response, the Romanian state has provided the following forms of redress:
Restitution in kind — where legally and physically possible, properties were returned directly to their rightful owners or heirs
Compensation through shares in Fondul Proprietatea — eligible claimants received shares in this state-established investment fund, proportionate to the assessed value of their lost assets
Cash payments — disbursed either as a series of 5 to 7 equal annual instalments, adjusted for inflation in the later tranches, or as an immediate one-time payment equivalent to 50% of the value of their dispossessed asset
This led to the launch of Fondul Proprietatea (the Property Fund), a joint-stock company established on 28 December 2005, as part of a series of reforms regarding property ownership and the judicial system, with shareholders limited only to victims of communism (until 2008, when the shares were allowed to be sold). These victims were identified and confirmed mostly through pre-1945 archives, such as land books that recorded ownership history, tax registers, and other records kept by the communists. The official number is unknown, but more than 200,000 restitution claims were filed in the years following the revolution.
The goal of setting up Fondul Proprietatea was to divert a small proportion of capital from state-owned companies (no more than 20% in most cases) to satisfy Romanians who suffered from the expropriation of private property during the communist era while maintaining the Romanian government majority control over these state-owned enterprises. In theory, the victims would receive the same amount of money from the fund as the value of the property they lost, although many claimed to have received far less than intended. There is no direct reimbursement to Fondul Proprietatea. In order to meet the demand of capital by reallocating the existing shares of state-owned enterprises, the original investment portfolio of Fondul Proprietatea included more than 100 companies.
The establishment of the Fondul Proprietatea was a part of the wider privatization campaign led by the Romanian government in hope to transform the country from a centralized communist command economy to a market-based system. In 2005, many people had already lost hope of recovering their assets after 15 years marked by political scandals, social injustice, and corruption. Throughout the 90s, Romania faced harsh economic conditions and widespread poverty, caused by former members of the Communist Party who now occupied governmental positions. The privatization of state-owned companies was slowed down as a result. However, the "privatization" of Fondul Proprietatea proved successful in the long run. At the end of 2008, the Ministry of Finance had a 70.42% stake in the fund, which dropped to only 11.67% as of 2026.
Fondul Proprietatea was the largest closed-end fund in Romania and one of the largest in the world at its founding, with assets under management of around 3 billion euros. The fund completed its initial public offering on the Bucharest Stock Exchange (BSE) in 2011 and was also listed on the London Stock Exchange (LSE) from 2014 to 2025. It is part of the Bucharest Exchange Trading Index, the main stock index on the BSE, which comprises the 20 largest companies by market capitalization and liquidity.
In 2009, a selection commission chose the American investment manager Franklin Templeton to manage the fund, with the mandate to begin the following year. During its tenure as fund manager, Franklin Templeton sold major equity stakes in companies such as Petrom, Romgaz, Nuclearelectrica, and Hidroelectrica, in attempt to attract foreign investors into the Romanian market. The strategy was to use the proceeds from the sale of the fund’s assets to pay significant dividends to shareholders and perform regular buybacks. Sixteen buyback programs were carried out as a means of returning money to its shareholders. Ultimately, Fondul Proprietatea is worth only 300 million euros today.
Its best-known holding was, by far, a 19.94% stake in Hidroelectrica (worth around 1.9 billion euros), Romania's main electricity producer. It sold its entire share in the company, facilitating Hidroelectrica's 2023 IPO, the largest in Europe that year. After the large dividends were paid, the fund's stock price dropped significantly - by almost 80%.
Nowadays, the fund has 23 companies in its investment portfolio, very few of which are attractive investments. Important holdings include 20% stakes in Bucharest Airports and Sea Ports Administration Company, 49% in Salrom (salt producer), and 10% in Alro (aluminium producer). Posta Romana (mail service company) used to be a major holding for Fondul Proprietatea (25%), but has since been reduced to 6.48%.
The shareholders of Fondul Proprietatea are no longer limited to the victims of the expropriation under the communist regime as the lock-up period ended in 2008. Institutional investors, such as the Rigelnik family from Slovenia, also own a partial stake of Fondul Proprietatea. However, 60.27% of the fund is still in people's hands.
Today, Fondul Proprietatea occupies a quiet place in the public consciousness. Most ordinary Romanians have largely forgotten its existence, a sign that it has largely fulfilled its original mission of property restitution. Investors see it as a stock that has been attempting a modest recovery over the past year, though many investors have lost interest due to its unattractive investment profile. What we can say for certain is that the glory days are probably over, but that does not mean it is a dead stock. Time will be the judge of that. Instead, we should look Fondul Proprietatea as one of the Romanian state's few successes in providing redress to the victims of expropriations.