Focus on private equity: Russia’s Rusnano and Virgin Group launch EM private equity fund
Russia’s Rusnano Capital has launched a private equity fund with Virgin Group and Virgin Green Fund, investing in emerging market growth.
The founders have committed over $200m to the fund, named VGF Emerging Market Growth. It has offices in London and Moscow and will be managed from both locations.
It will invest in buyout and growth equity opportunities in mid-cap companies, targeting the resource efficiency, consumer sustainability and renewable energy sectors in Russia, Turkey and Central and Eastern Europe (CEE).
The founders are Shai Weiss and Evan Lovell, co-founding partners of the Virgin Green Fund, a global growth capital investor, together wil Brooks Preston, formerly of Wolfensohn & Company, and Tamas Szalai, of Bancroft Private Equity. Preston and Szalai will lead the investment team.
Andrew Reicher, the former head of CEE Private Equity for Credit Suisse and CIO at Actis, is the non-executive chairman of the investment committee.
Rusnano Capital the investment arm of Rusnano, is a Russian state owned company whose aim is to to develop the Russian nanotechnology industry through co-investment in relevant projects.
Anatoly Chubais, CEO and chairman of the executive board of Rusnano, said: “Renewable energy and energy efficiency technologies will provide answers to the key global challenges of natural resources depletion and environment pollution.
“Developing solutions will be impossible without the use of nanotechnology. I believe the fund will find great opportunities to invest in growth companies in Russia and take them into global markets.”
The countries within the fund’s investment mandate offer a good environment for investment in the chosen themes.
The majority of CEE and CIS countries have either aspirations or mandates to converge with the European Union’s policies on carbon, emissions, and renewable energy.
Russia’s government, for example, is focused on reducing energy consumption, increasing energy exports and driving global competitiveness of the sector as a means of improving GDP efficiency by 1% per year.
Turkey has strong incentives to develop an alternative energy sector because of its dependence on energy imports. It imports 93% of its energy, according to the Institute of Economic Affairs.
The fund intends to invest in “proven management teams operating profitable enterprises” in the target sectors and geographies.