Russian Direct Investment Fund shortlists investment projects

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The Russian Direct Investments Fund (RDIF) has shortlisted 15 investment projects as part of the consortium it formed this summer with a trio of international investment firms managing a total of $5trn.

The group consists of BlackRock Investment Management, Templeton Asset Management and the Goldman Sachs European Special Situations Group. Its aim is to help Russian companies through the pre-IPO process.

Companies that qualify have an annual turnover of $500m or more and plan to place their equity on the Russian stock exchange in the next six to 18 months.

Russia’s news source Prime quotes the fund’s director, Kirill Dmitriev, saying the group will choose three to five projects form the initial shortlist of 15. The investment size slated for each deal is between $100m and $150m.

The shortlist includes companies from sectors such as medicine, financial services and agriculture. Dmitriev added that the first investment will take place within the next couple of weeks.

The Kuwait Investment Authority (KIA), which has also agreed to make joint investments with the fund into Russian companies at the pre-IPO stage, plans to contribute 5% to the project, Dmitriev added.

Last week also saw the annual Asia-Pacific Economic Cooperation Forum (APEC) Summit. It took place in Vlodivostok, a Russian city based in the Primorski region, not far from the border with China and North Korea.

At the summit, Dmitriev signed another cooperation agreement with the Primorski region, to invest in key local industries. These include forestry, transport, aviation, logistics and tourism, as well as the development of alternative energy. Dmitriev said the region has “huge growth potential across a range of different industries.”

At the summit, Russia’s president Vladimir Putin highlighted the importance of the fund in strengthening the relationship between Russia and the Far East. A crucial part of this cooperation is through investment, he said.

Dmitriev commented: “The Far East region is one of the most attractive for investors because, among other things, it has a unique geographic location and a highly developed infrastructure.”

The RDIF was formed last April to invest in leading Russian companies in high-growth sectors together with foreign investors. It is a full subsidiary of Russia’s state bank Vnesheconombank, and as such offers security to its international partners.

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