Luxembourg to host the Greek SICAV

The Development Ministry is planning the creation of a body that will operate as an investment company of variable capital (known by its French acronym SICAV), will be based in Luxembourg and its management will be appointed by the investors/shareholders and not by the Greek state, according to the ministry.

The Hellenic Investment Fund, to be created along the lines of a special committee report issued in October, may not be restricted to investing in holdings with an aim to aid growth in the country, but could also issue direct loans to candidate investors in order to finance major projects in Greece. The decision on the exact character of the fund will be made later.

Ministry officials who have undertaken the preliminary work for the establishment of the fund attribute great significance to its operation being based on private economy criteria; it is seen as crucial that this new institution gain the confidence of private investors. Nevertheless, it appears so far that the idea has failed to obtain the support of foreign institutional investors, as they believe that it could reduce their level of intervention in the country’s economy.

It also remains unclear how the initial financing of the fund is going to be implemented. Neither the national budget’s Public Investment Program nor the European Union-subsidized National Strategic Reference Framework are considered to be appropriate funding sources. Kathimerini understands, however, that the money for initial financing, proposed to amount to 500 million euros, has been found and will come from the state and not from private investors.

The fund will operate under Luxembourg law. All of its investors will be represented in the shareholders’ meeting but none of them will have the right to veto even if a shareholder represents more than 25 percent. The fund’s governing board will have no more than 10 members and will be appointed by the shareholders’ meeting. However, as the Greek state will be a shareholder of the fund, it will have some say in the composition of the board.