With russian direct investment fund

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1 With russian direct investment fund

2 Today the positive dynamic of the Russian economy, the accumulated safety factors and our reserves allow us to set new ambitious goals. The Russian Direct Investment Fund is now up and running. Practically all centers of global capital the Middle East, China, Europe, the United States and Australia are working with the Fund. Russia has developed and achieved some good results, especially in light of the difficulties that global markets are experiencing. The Russian Direct Investment Fund has already attracted strong interest from top global investors and its project pipeline is growing. Dmitry Medvedev, Prime Minister of Russia Vladimir Putin, President of Russia

3 WHY INVEST IN RUSSIA? GROWTH OF MODERN RUSSIA IN NUMBERS Russia is the world s 6th largest economy by GDP (PPP). Foreign direct investment into Russia amounted to $94bn in 2013 (increased by 83% YOY), which places Russia 3rd in a global ranking on FDI inflow after USA and China. The Russian economy is expected to grow from $2.5 trillion in 2012 to $3 trillion in Russia has one of the largest domestic markets in the world, ranking 8th among 148 countries. Russia has one of the lowest levels of public debt of any major economy. Russia s middle class tripled in the last 5 years. GDP per capita (PPP) is the largest among BRICS countries. Nominal GDP per capita increased compared to that of the United States from 1/20 in 2000 to more than 1/4 in Low unemployment rate of 5.5%. GDP per capita, based on PPP, $ 6,790 17,884 Nominal GDP per capita, $ 1,334 14,819 Federal budget expenditures, $bn International reserves of Russia, $bn Average nominal monthly wage, $ Assets of Russian Banking System, $bn 59 1,754 Capitalization of Russian stock market, $bn Public debt, % of GDP 88.7% 13.4% Inflation 36.5% 6.5% Unemployment 13.0% 5.5% Sources: IMF, Rosstat, UNCTAD, World Economic Forum Global Competitiveness Report Sources: IMF, Cеntral Bank of Russia, Russian Federal Treasury, Rosstat, Moscow Exchange 4 INVEST IN RUSSIA INVEST IN RUSSIA 5

4 Growth of modern Russia in Numbers GROWTH OF MODERN RUSSIA IN NUMBERS Russia s GDP per capita almost tripled since $ 17,884 Total value of assets of Russian Banking System rose 30 times 2013 $ 1,754 bn 1999 $ 6, $ 59 bn International reserves of Russia increased more than 40 times Capitalization of the Russian Stock Market grew almost 20 times 2013 $ 510 bn 2013 $ 772 bn 1999 $ 12 bn 1999 $ 40 bn Sources: IMF, Cеntral Bank of Russia Sources: Cеntral Bank of Russia, Moscow Exchange 6 INVEST IN RUSSIA INVEST IN RUSSIA 7

5 INVESTOR PERSPECTIVE ON RUSSIA INVESTOR PERSPECTIVE ON RUSSIA Level of investors satisfaction 30% 18% 28% 16% % 82% 72% 84% 56% 26% 71% 19% 70 % 82 % 72 % 84 % Over 70% of investors who previously invested in Russia are happy about their decision. of investors are convinced that the large domestic market, developing consumer finance sector, growing levels of savings and personal income present attractive investment opportunities. of investors positively value the economic policy and legislative changes introduced by the Russian government to improve the investment climate. of respondents noted that joining the WTO had a significant positive impact on the Russian investment climate. 47% 25% 1% HIGH 17% 8% 2% MEDIUM MIXED LOW Assessment of developments in Russian economic policy and legislative system Moving in the right direction Hard to say 22% 72% 28% Slowed down in the last year 6% Source: Investment Climate in Russia 2012: Existing and Potential Investors Survey by Foreign Investment Advisory Counsel Source: Investment Climate in Russia 2012: Existing and Potential Investors Survey by Foreign Investment Advisory Counsel 8 INVEST IN RUSSIA INVEST IN RUSSIA 9

6 ABOUT RDIF INTERNATIONAL INVESTORS ABOUT RDIF The Russian Direct Investment Fund is a $10 billion fund established to make equity investments primarily in the Russian economy. RDIF was created in 2011 under the leadership of the President and Prime Minister of Russia to co-invest alongside top global investors, acting as a catalyst for direct investment in Russia. Since inception the fund has invested $3.8 billion into leading Russian companies, of which over $900 million were invested by RDIF and $2.9 billion came from international co-investors. RDIF also attracted over $10 billion of foreign capital into the Russian economy through long-term strategic partnerships. The idea of RDIF is unique. Many private equity funds are established every day but there is only one fund in the world where a country says: I am sending $10 billion and welcome anyone who would like to partner with me on good terms this is the only fund we have seen on these terms. Bader M. Al-Sa ad, Managing Director, Kuwait Investment Authority Given the track record and caliber of the RDIF team we are confident that our collaboration will deliver long-term financial returns and development opportunities. Khaldoon Khalifa Al Mubarak, Chief Executive Officer, Mubadala RDIF is a great opportunity to wake up people who were not engaged in the market and were cautious about it. Stephen Schwarzman, Founder, Chairman and Chief Executive Officer, Blackstone Group Creation of RDIF is a very interesting step and a great model together with a team that was created - TPG will definitely work with them. David Bonderman, Managing Partner, TPG 10 INVEST IN RUSSIA INVEST IN RUSSIA 11

7 RDIF Initiatives RDIF Initiatives 2013 marked the year of Russia s G20/B20 presidency. RDIF led B20 Investments and infrastructure taskforce. At the G20 Summit in St. Petersburg in September the recommendations of the group were presented to Russian President Vladimir Putin and other leaders of G20 countries. Each year as part of the St. Petersburg International Economic Forum RDIF organizes a panel discussion dedicated to investment opportunities in Russia, as well as a traditional meeting between Russian President Vladimir Putin and the leaders of the global investment community. RDIF s CEO has been appointed to represent Russia at the BRICS Business Council launched to foster multilateral investment among BRICS countries. RDIF s CEO represents Russia at the APEC Business Advisory Council (ABAC). Set up to drive global growth and stability of APEC economies. RDIF has launched the Centre to attract foreign investment into the Russian regions. The Centre was created to gather information on doing business in Russia, as well as the specific investment opportunities available across the regions of Russia. RDIF actively participated in the creation of the Investment Council, an advisory body under the Chairman of the State Duma of the Russian Federation to improve the existing rules and regulations to stimulate the investment demand and supply. 12 INVEST IN RUSSIA INVEST IN RUSSIA 13

8 OVERVIEW OF RECENT TRANSACTIONS OVERVIEW OF RECENT TRANSACTIONS RDIF acted as the anchor investor in the IPO of the Moscow Exchange and it proactively sourced leading international co-investors from the US and China. In addition, prior to the IPO RDIF brought a number of investors to the Exchange including China Investment Corporation (CIC), BlackRock, the European Bank of Reconstruction and Development (EBRD), Cartesian Capital and KIA. Consortium of RDIF, Macquarie Renaissance Infrastructure Fund (MRIF), AGC Equity Partners, Xenon Capital Partners and KIA acquired a blocking stake in Enel OGK-5, one of the leading power generating companies in Russia. This was the largest private equity deal in the energy sector. Investment by AGC in this deal was the largest ever investment in Russia from a Middle Eastern investor. RDIF acted as the anchor investor in the IPO of the MD Medical Group (MDMG) bringing BlackRock, Russia Partners, KIA and other qualified institutions as co-investors. MDMG is the No 1 private network of prenatal clinics and hospitals in Russia. Russian forest products group RDIF invested in Russian Forest Products, Russia s second largest timber industry company the first investment of the Russia-China Investment Fund, the joint fund of RDIF and China Investment Corporation (CIC). RDIF and General Electric (GE) signed an agreement to jointly invest in construction of distributed power co-generation systems (up to 25 MW) to meet the growing energy demand for the developing industrial infrastructure of the Russian regions. Consortium of RDIF, Baring Vostok Private Equity, UFG Private Equity and KIA together with media entrepreneur Paul Heth acquired a controlling stake in Karo Film, one of Russia s leading and fast developing cinema chains. 14 INVEST IN RUSSIA INVEST IN RUSSIA 15

9 OVERVIEW OF RECENT TRANSACTIONS OVERVIEW OF RECENT TRANSACTIONS RDIF, KIA, Mubadala and Baring Vostok Private Equity Fund V announced a joint investment Tigers Realm Coal Limited (TIG), an Australian listed company with coking coal assets in the Chukotka province in Russia s Far East. The funds will be used by TIG to further develop and continue exploration of deposits in Chukotka. RDIF, KIA, Mubadala and Deutsche Bank, one of the leading international banks, made a joint investment in one of Russia s largest telecommunications company, Rostelecom. The investment will be used to further develop and strengthen the company s market position. A consortium comprised of RDIF, One Equity Partners, KIA, Mubadala and Titan International Inc., leading international strategic player, agreed to jointly invest in Voltyre-Prom, the largest producer of agricultural and industrial tyres in Russia & CIS. RDIF has attracted a number of leading foreign investors including Templeton, East Capital, Union Investments, Capital International, Oppenheimer, Charlemagne, KIA and Mubadala into a consortium to invest in the IPO of ALROSA, a Russian diamond company. ALROSA is the world s largest diamond producer by output in carats. RDIF led the consortium of investors including the European Bank for Reconstruction and Development (EBRD), KIA, Mubadala and CapMan, one of the leading Nordic alternative asset managers. The consortium invested in growth of MAYKOR, the leading player in the Russian IT servicing and outsourcing market. RDIF, KIA, Mubadala, the European Bank for Reconstruction and Development (EBRD) and Mitsui, one of the biggest Japanese trading firms, announced a joint investment in Cotton Way, Russia s leading commercial laundry and textile management company. 16 INVEST IN RUSSIA INVEST IN RUSSIA 17

10 RDIF PARTNERSHIPS RDIF PARTNERSHIPS Together with China Investment Corporation (CIC) RDIF created a $2 billion Russia-China Investment Fund, 70% of which will be invested in Russia. Up to $2 billion is expected to be raised from international investors. RDIF and Abu-Dhabi s Department of Finance announced the creation of the partnership for investing in Russian infrastructure projects and developing cross-border investment cooperation between Russia and UAE. Abu-Dhabi s Department of Finance will contribute up to $5 billion. RDIF and Korea Investment Corporation (KIC) have signed a memorandum to form the Russian- Korean Investment Platform. The investment platform will focus on cross-border investments, which fulfill Russian-Korean strategic interests. RDIF and Mubadala Development Company, the Abu Dhabi-based investment and development company, agreed to launch a $2 billion co-investment fund to pursue opportunities in Russia. The fund will predominantly focus on long-term investment projects across a range of industry sectors. RDIF, Vnesheconombank (VEB) and Japan Bank for International Cooperation (JBIC) have signed a joint memorandum creating the Russian-Japanese Investment Platform. RDIF and JBIC will each invest $500 million. VEB will potentially provide financing to fund projects and design new financial products to support the platform. This platform will drive economic cooperation, trade and investment between Russia and Japan. RDIF launched an automatic co-investment mechanism, with the first $500 million from Kuwait Investment Authority. This vehicle allows international investors to automatically participate in every RDIF transaction on a pro-rata basis. 18 INVEST IN RUSSIA INVEST IN RUSSIA 19

11 RDIF PARTNERSHIPS SUPERVISORY BOARD RDIF and Caisse des Dépôts International (CDC International) have launched the Russia-France Investment Fund (RFIF). RFIF will seek attractive investments across a broad range of sectors and asset classes, including equity and debt securities, infrastructure and real estate in Russia and France with strong focus on opportunities promoting economic co-operation between the two countries. Alexei V. Ulyukaev Minister of Economic Development of the Russian Federation Elvira S. Nabiullina Chairperson of the Bank of Russia Sergei B. Ivanov Chief of Staff of the Executive Office of the President of the Russian Federation Anton G. Siluanov Minister of Finance of the Russian Federation Fondo Strategico Italiano RDIF and Fondo Strategico Italiano (FSI) agreed to establish a 1 billion Russian-Italian investment platform. The two financial institutions will invest in companies and projects promoting the development of foreign trade and FDI between Italy and Russia. Andrey R. Belousov Aide to the President of the Russian Federation Laurent Vigier Chairman and CEO CDC International Capital (CDC) The Russian Direct Investment Fund (RDIF) and Mumtalakat, the investment arm of the Kingdom of Bahrain, signed an MoU to promote investment cooperation between Russia and Bahrain. The partnership promotes the exchange of information and expertise in the sectors and areas of common interest and identification of investment opportunities in Russia and Bahrain. Vladimir A. Dmitriev Chairman Vnesheconombank Kirill A. Dmitriev Chief Executive Officer Russian Direct Investment Fund Dominique Strauss-Kahn Managing Director Parnasse SARL 20 INVEST IN RUSSIA INVEST IN RUSSIA 21

12 INTERNATIONAL ADVISORY BOARD INTERNATIONAL ADVISORY BOARD Maurizio Tamagnini CEO Fondo Strategico Italiano 22 INVEST IN RUSSIA INVEST IN RUSSIA 23

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