Middle East investors commit $20bn for Russian investments
Dominic Dudley ,
Gulf sovereign wealth funds have earmarked at least $20bn for investment in Russia, according to Kirill Dmitriev, head of the Russian Direct Investment Fund (RDIF).
A number of large deals by RDIF and its international partners are due to be announced at the St Petersburg Economic Forum, which takes place in Russia’s second largest city at the start of June. Speaking ahead of the gathering, Dmitriev said “We expect to sign investments in the forum for more than RUB100bn ($1.7bn). Our co-investors include India, China, Middle East and some other countries. There will be deals in oil, transport and logistics, transport infrastructure, mining and healthcare.”
These deals are unlikely to involve fresh money from the Middle East region though, as Dmitriev said “We already have around $20bn from Middle Eastern partners that we are seeking to deploy in Russia.”
Employees assemble a Mi-28NE Night Hunter military helicopter at Rostvertol (part of Russian Helicopters) in Rostov-on-Don on December 17, 2014. In February 2017, Middle East investors took a minority stake in Russian Helicopters alongside the Russian Direct Investment Fund (Photo: SERGEY VENYAVSKY/AFP/Getty Images)
RDIF was set up in 2011 and soon began to reach out to other sovereign wealth funds in the Middle East region. It currently has at least eight partnerships with state-backed investors from six countries around the region.
Most of them are from the Gulf, including DP World and Mubadala from the UAE, Saudi Arabia’s Public Investment Fund and the Saudi Arabian General Investment Authority (Sagia), Bahrain’s Mumtalakat, the Kuwait Investment Authority and Qatar Holding. In addition, RDIF also has a deal with Egypt’s Ministry of Investment to develop an Egyptian investment fund.
Many of the arrangements in place with the Gulf funds are structured as automatic co-investments, which means the Middle East partners automatically participate in every RDIF transaction on a pro-rata basis. As a result, the deal flow has been very strong, with one fund from the UAE having invested in 30 companies in Russia.
“Right now we have automatic partnerships with Kuwait, Bahrain, the UAE, Qatar and Saudi,” said Dmitriev. “Each of those invest at least some amount of money in every RDIF deal and they deploy large sums of capital into transactions that they particularly like.”
Recent deals involving Middle East investors have included a consortium of Middle East funds which took a minority stake with RDIF in Russian Helicopters in February. The initial round involved $300m and valued the company at $2.35bn; a further investment of $600m could follow.
www.fotavgeia.blogspot.com
Dominic Dudley ,
Gulf sovereign wealth funds have earmarked at least $20bn for investment in Russia, according to Kirill Dmitriev, head of the Russian Direct Investment Fund (RDIF).
A number of large deals by RDIF and its international partners are due to be announced at the St Petersburg Economic Forum, which takes place in Russia’s second largest city at the start of June. Speaking ahead of the gathering, Dmitriev said “We expect to sign investments in the forum for more than RUB100bn ($1.7bn). Our co-investors include India, China, Middle East and some other countries. There will be deals in oil, transport and logistics, transport infrastructure, mining and healthcare.”
These deals are unlikely to involve fresh money from the Middle East region though, as Dmitriev said “We already have around $20bn from Middle Eastern partners that we are seeking to deploy in Russia.”
Employees assemble a Mi-28NE Night Hunter military helicopter at Rostvertol (part of Russian Helicopters) in Rostov-on-Don on December 17, 2014. In February 2017, Middle East investors took a minority stake in Russian Helicopters alongside the Russian Direct Investment Fund (Photo: SERGEY VENYAVSKY/AFP/Getty Images)
RDIF was set up in 2011 and soon began to reach out to other sovereign wealth funds in the Middle East region. It currently has at least eight partnerships with state-backed investors from six countries around the region.
Most of them are from the Gulf, including DP World and Mubadala from the UAE, Saudi Arabia’s Public Investment Fund and the Saudi Arabian General Investment Authority (Sagia), Bahrain’s Mumtalakat, the Kuwait Investment Authority and Qatar Holding. In addition, RDIF also has a deal with Egypt’s Ministry of Investment to develop an Egyptian investment fund.
Many of the arrangements in place with the Gulf funds are structured as automatic co-investments, which means the Middle East partners automatically participate in every RDIF transaction on a pro-rata basis. As a result, the deal flow has been very strong, with one fund from the UAE having invested in 30 companies in Russia.
“Right now we have automatic partnerships with Kuwait, Bahrain, the UAE, Qatar and Saudi,” said Dmitriev. “Each of those invest at least some amount of money in every RDIF deal and they deploy large sums of capital into transactions that they particularly like.”
Recent deals involving Middle East investors have included a consortium of Middle East funds which took a minority stake with RDIF in Russian Helicopters in February. The initial round involved $300m and valued the company at $2.35bn; a further investment of $600m could follow.
www.fotavgeia.blogspot.com
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