Russia's $10 billion fund staffed up, ready for deals

MOSCOW Thu Sep 15, 2011 7:41am EDT

Kirill Dmitriev, chief executive of the Russian Direct Investment Fund, answers a journalist's questions in front of a picture of Russia's President Dmitry Medvedev, during the Reuters Russia Investment Summit in Moscow September 14, 2011. REUTERS/Denis Sinyakov

Kirill Dmitriev, chief executive of the Russian Direct Investment Fund, answers a journalist's questions in front of a picture of Russia's President Dmitry Medvedev, during the Reuters Russia Investment Summit in Moscow September 14, 2011.

Credit: Reuters/Denis Sinyakov

MOSCOW (Reuters) - The Russian Direct Investment Fund (RDIF), a $10 billion Kremlin initiative, is fully staffed up and ready to do deals just three months after it was created, CEO Kirill Dmitriev told Reuters.

The RDIF, which seeks to co-invest with private-equity, sovereign wealth funds and strategic investors, should start to execute on a pipeline of deals over the next couple of months, Dmitriev told the Reuters Russia Investment Summit.

"Now we need to have some quick wins with good partners and with deals," Dmitriev, a U.S.-educated private equity professional with a decade-long track record in Russia, told the summit, held at Reuters offices in Moscow.

The fund was created in June with the backing of President Dmitry Medvedev and Prime Minister Vladimir Putin to address the concerns of some major investors who have steered clear of Russia due to the country's risky image.

It would invest in private equity-style deals as long as its partners match it at least dollar for dollar, sharing in profits from investments but offering no guaranteed returns.

Reflecting strong political support for the RDIF, Dmitriev will share a platform on Friday with Putin at an economic forum hosted by the prime minister in the Black Sea resort of Sochi.

Also joining the panel will be investment luminaries Leon Black, CEO of $72 billion asset manager Apollo Global Management, visiting Russia for the first time, and Drew Guff, managing director of Siguler Guff, which runs $9 billion.

STRONG TEAM

Dmitriev said he had recruited a strong team of investment professionals to run the RDIF, including Sean Glodek, who joins from Darby Private Equity, an equity and debt fund with a focus on eastern Europe, Russia and Turkey.

Also on the team is Richard Ogdon, formerly chief risk and capital officer at Troika Dialog, Moscow's oldest investment bank, while Alec Maryanchik joins from Klever Asset Management, a Russian private equity and family office fund.

Tagir Sitdekov joins from A-1, the direct investment arm of Russia's Alfa Group, along with Alexei Chekunkov from investment and advisory firm New Nations Capital.

The fund should complete formalities on getting set up by the end of October and is already looking at deal opportunities, including partnering with private equity investors to create a leading private healthcare firm in Russia, Dmitriev said.

The RDIF's minimum investment size is $50 million, meaning the deal size would start at $100 million. Dmitriev said he expected the fund's average equity investment to be around $200 million.

The fund will be capitalized with $2 billion a year in state cash for five years. Dmitriev stood by his earlier forecast that it could generate $50 billion in investment over the next five to seven years.

(Editing by David Holmes)