4.5 Conclusions


One of the goals was to attract into the programme highly professional foreign managerial teams experienced in corporate restructuring and in closed fund management. In the author s opinion the assumption was fulfilled thanks to performance-based fees (management fees and success fees) for the managing companies from Austria, Britain, France, Italy, Switzerland, Japan, Canada, the United States and Hong Kong. Their participation was a factor of the programme s success.

During the years 1995 “98, in the initial period of their operations, the NIFs created value for their shareholders mainly through the intensive restructuring of the portfolio companies. This involved the introduction of modern management techniques such as value-based management and managerial accounting, as well as the identification of profit centres . Most companies introduced annual financial budgets and long- term strategic plans, following the guidelines set by their management companies. Unprofitable assets were identified and sold. Numerous companies adopted new technologies, and as a result strengthened their market position. Financial restructuring took place in companies that were facing a loss of liquidity. Additional measures included monthly monitoring of the budget and an annual review of the strategic business plan.

At present shareholder value is created mainly by selling restructured companies and investing some of the proceeds in private companies with a high rate of return. The rest of the funds are set aside to repay the loans secured from the IBRD and EBRD in 1995 to launch the NIFs activities and support their operations in the early stages.

References

Coffee, J. C. (1994) ˜Investment Privatization Funds: the Czech Experience , paper presented to the conference of the World Bank and the Central European University Privatization Project on corporate governance in Central Europe and Russia, Washington, 15 “16 December.

Jezak, J. (1996) ˜National Investment Funds as A New Form of Privatization of State-Owned Enterprises in Poland , paper presented at the annual conference of the International Association of Schools and Institutes of Administration (IASIA), Durban, 30 June “5 July.

National Investment Fund Programme (1995), Warsaw: No. 11.

Radygin, A. (1996) Privatization in the Russian Federation (Studies and Analysis) , Warsaw: Centre for Social and Economic Research, April, p. 22.

Parkiet (newspaper issued by the Warsaw Stock Exchange) evaluation of the activities of national investment funds, ˜Parkiet . 16 March 2001.




Change Management in Transition Economies. Integrating Corporate Strategy, Structure and Culture
Change Management in Transition Economies: Integrating Corporate Strategy, Structure and Culture
ISBN: 1403901635
EAN: 2147483647
Year: 2003
Pages: 121

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