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Russia-Focused Private Equity Funds in Market – February 2014

by Matthew Morris

  • 18 Feb 2014
  • PE

According to Preqin’s Funds in Market online service, there are currently 43 private equity funds raising capital that have Russia in their investment focus, either exclusively or as part of a wider geographical range. These funds are hoping to collect total capital commitments of just fewer than €14bn. So far, 16 of these 43 funds have held an interim close, managing to pull together almost €2bn. Of these 43 funds in market only 12 are exclusively focused on making investments in Russia, and seek to raise just over €3bn. 

The fundraising effort over the last year has suffered compared to that of the previous year, with only seven funds managing to reach a final close in 2013. These seven funds managed to raise an aggregate of €2,545mn, falling quite a way short of the €7,507mn raised by 17 funds in 2012. Since the beginning of 2014 there have been only two fund closures for part or exclusively Russia-focused funds, with the largest coming from Elbrus Capital Fund II, which held a €512.5mn final close. 

Broken down into fund types, we can see that venture capital and early stage funds are the most popular of the strategies for current funds in market, with 18 funds taking this approach. Together, these funds are looking to collect an aggregate of just fewer than €1bn, making up 7% of the total target amount. Additionally, there are 10 buyout funds currently in market, looking to gather just under €8bn, 55% of the aggregate target. Unsurprisingly, venture capital and early stage funds seek to raise an average of approximately €54mn, while the average buyout fund targets €758mn. 

Of the 43 funds in market, 31 are being managed by Russia-based fund managers and account for 71% of the total capital being collected. Combined, US and UK-based private equity fund managers are looking to raise 21% of the current capital being sought, from just six funds in market. Of the 12 funds that are solely focused on investments in Russia, all fund managers are located within Russia. 

The largest fund in market focused on Russia as part of a wider geographical scope is the Russia-China Investment Fund, managed by Russian Direct Investment Fund. The fund seeks to garner €3,118mn to invest in a diverse range of industries and has already held a first close of €780mn. The largest fund with a sole focus on Russia is AVG CIS Agricultural Opportunities Fund, which is looking to raise €1,170mn to invest primarily in agriculture, food and biotechnology.

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