iBV: This is Peter Ott with the International Institute of Business Valuers (“iiBV”) speaking with Daniel Manate, President of The National Association of Valuers in Romania (2016-2017) (“ANEVAR”).
Daniel Manațe: Good afternoon.
iiBV: Daniel, could you tell us about ANEVAR and its role in the Romanian valuation community and its history?
Daniel Manate: The history of ANEVAR goes back to 1992 when the association was initially founded. It was first based only on business valuation, followed then by real estate and machinery and equipment valuation as well financial instruments. From 1992 and 2011, ANEVAR functioned as a private professional association with a public interest. In 2011, the government issued laws to set up the profession, including the rules required to practice valuation in Romania. Now that the profession is established by law it confirms the responsibilities and the role of the valuation professional. Other professions, such as accounting and auditing were established in law prior to the valuation profession.
iiBV: The valuation community in Romania is quite advanced relative to other jurisdictions then?
Daniel Manațe: Yes, the key difference would be that between 1992 and 2011, anyone who attended a valuation program could perform a valuation and sign a report. After 2011, you cannot prepare a valuation unless you abide by the rules set out in Romania’s laws and if a person does not respect this law than they could be subject to prosecution.
iiBV: How does ANEVAR address business valuation training? How many students and members would ANEVAR have primarily focused on business valuation now?
Daniel Manațe: Beginning in 1992, ANEVAR used in-class training that required approximately four weeks and 120 hours. There were four modules and training was held over five days per week and went into different topics of business valuation.
In the past two years ANEVAR has built onto this and now have five training modules requiring five weeks. To finalize the training there is an exam, along with intermediary exams. The courses involve work that require students to present and discuss work done outside the class with other students and lecturers.
At the end of classes, a student must prepare a valuation report that is presented to ensure the student has full understanding and is able to support their opinions of value with reasonable arguments.
Students must also follow a period of tutelage where they would work in a valuation company or with a specialist who would guide them as they develop their valuation analysis and reports.
We have roughly 2,000 individuals who have their valuation qualifications and approximately 500 to 700 that do valuations regularly.
iiBV: Is business valuation be taught in universities in Romania?
Daniel Manațe: That is a very good question. There are around 14 universities and some of the faculties of economics or technical faculties teach valuation. For business valuation this is usually within the economic faculties. We have helped to formulate their valuation programs and work with instructors and recognize those programs that abide with the International Valuation Standards, TEGoVA Standards and our Romanian Assets Valuation Standards. As a result, ANEVAR has agreements with 12 universities and 15 faculties within Romania.
Within the program the exam questions and problems are established by ANEVAR. Assuming the university student achieves a certain level or grade and following completion of the exam the student can enter the valuation program. The individual must still though fulfill all the program requirements.
ANEVAR does recognize the Master level programs that are typically not just valuation, but may include for example economic analysis and valuation.
iiBV: What sort of market data would a valuer in Romania have access to?
Daniel Manațe: We have the same data sources though we are obviously more focused on data from Europe. We use sources like Business Valuation Resources. Some companies use sources like Bloomberg or Reuters. For economic data a very good provider is EuroStat as well as the Central European Bank.
Of course, for the valuation of local companies we would consult information from the Bucharest Stock Exchange and some of our members cooperate with brokerage companies that offer them data about transactions and other information like liquidity.
Romania is strong in the financial as well as the utilities sectors.
iiBV: In terms of coordinating and working with other European countries, can you comment on how ANEVAR works with other bodies?
Daniel Manațe: We have three types of cooperation. One would be with TEGoVA [The European Group of Valuers’ Associations]. We also provide our standards in English to countries in the region that we are related, for example, Moldavia, Bulgaria or Georgia. Another direction of cooperation are courses and different topics in valuation and ANEVAR has programs in several countries. A third area would be exchanges of experience between boards. For example, we had a common board meeting with our colleagues from Bulgaria where we examined issues we have in common. I think it was a good experience for both organizations.
iiBV: That speaks to the importance of being a part of an overall community so that you are benefiting from the experiences and perspectives of others.
Daniel Manațe: You are right. I would say we have a common place to meet and share our experience and ideas. That would be the TEGoVA meeting though it is real estate focused. More and more local associations of valuers are applying to be members of TEGoVA.
iiBV: Is there anything unique about the nature of the services that members of ANEVAR or methodologies or approaches that are considered in your valuation reports?
Daniel Manațe: First, our standards are fully compliant with the International Valuation Standards. Then, as every country has its specific issues or topics, for example, taxation value that is only for establishing tax that will be paid by the owner of the building to the local public authority.
One area of valuation that is no different than other countries involve companies that are listed on the Bucharest Stock Exchange, where the majority shareholder has decided to retreat from the Stock Exchange. There are specific local laws that force the majority shareholder to buy the shares of the minority shareholder. This is and remains an important topic in valuation.
We also have an important issue with companies that unfortunately go bankrupt which is part of life. We don’t have a standard of valuation in liquidation and we work with professionals that are involved with companies that develop reorganizing plans, creditors agreements or assist in the going bankrupt process. We have a mixed team that is writing a standard for such cases, and a guide that would describe how such work would be done that is important for practitioners in the area.
What also is crucial is the relationship between the valuer and the company in charge of the liquidation that has been appointed by the court to secure this process.
iiBV: At the iiBV we have developed a platform of education for business and intangible valuation that employs the learnings from our various member organizations. This is what is exciting about working with ANEVAR in this area.
Finally, Daniel I wanted to try to get a little bit more of a flavor for life in Romania. Maybe you could tell us a little bit about some of the favorite places you like to go to in Romania, some of your favorite foods.
Daniel Manațe: Let’s start with something to drink. If you come to Romania and you are interested in something very strong, you should try Țuica, that is a sort of “whiskey” made from plums. It is a bit rough.
I would also recommend Romanian wines. Marvelous. It’s a pity they don’t do a very good marketing for them, but if you come to Romania and visit vineyards you would be surprised.
Ciorba is one of the best thick soup I think in the region. My favorite is the so-called “Peasant soup”. If we go to the main dish, we have the Sarmale that have cabbage leaves rather than grape, it is totally different.
About places to visit, if you are interested in religious places Romania has wonderful monasteries, for example Voroneţ a wonderful painted monastery. Romania also has some of the best castles of the world. One would be the Peleș Castle in Sinaia that is a piece of art. And the castle in Hunedoara or Corvin Castle is something that really needs to be seen. Usually tourist choose Bran Castle, because it is known as Dracula’s Castle.
If you want adventure I would suggest only one name – Transfăgărășan. It is a road that serpentines and goes above 2,000 meters and it goes through lakes and dams and fortresses and waterfalls.
Finally, there is the Poenari Fortress. It is not well known and is a jewel. This was one of the toughest fortresses of the famous Vlad Țepeș (Dracula) and was never conquered because it is built in the peak of a mountain. The military experts calculate that it would need only between 20 or 30 soldiers to defend.
iiBV: That is great Daniel thank you for taking the time to share information on ANEVAR and business valuation community in Romania.
Daniel Manațe: Thank you for your questions and I hope my answers were of interest.