Programme

PROSPECTS FOR BOLSTERING PRIVATE EQUITY INVESTMENT IN RUSSIA

Realizing Russia's Competitive Edge
Panel Session
Pavilion 4, Conference Hall 4.2


Although private equity funds have existed in Russia since the 1990s, as a whole the market has largely failed to live up to expectations, both in terms of size and growth rates. What has held back the expansion of private equity investing in Russia and what steps can be taken to spur its development? What can be done to stimulate private equity growth in the hi-tech and other key industries? What are the prospects for pension fund money to be channelled into this investment sector?


Moderator:
Pavel Teplukhin , Chief Country Officer, Deutsche Bank Russia

Panellists
Kirill Androsov , Managing Director, Altera Investment Fund; Chairman of the Board of Directors, Aeroflot
Drew Guff , Managing Director, Founding Partner, Siguler Guff & Company
Nicholas Jordan , Co-Head, Goldman Sachs Russia and the CIS
Michael Calvey , Senior Partner, Baring Vostok Capital Partners
Dmitry Krukov , Managing Partner, Elbrus Capital
Denis Morozov , Executive Director for the Russian Federation, Belarus and Tajikistan, European Bank for Reconstruction and Development
Anatoliy Chubais , Chairman of the Executive Board, RUSNANO Corporation


Oleg Konev , Managing Partner, Da Vinci Capital
Andrey Neverov , President, Non-state Pension Fund ‘Savings Fund RESO’
Boris Titov , Presidential Commissioner of the Russian Federation for the Protection of Entrepreneurs’ Rights
Natan Shklyar , Partner, Bain & Company Russia

Broadcast

Key moments

“The fact that the [private equity] sector is unregulated, that there is no regulatory framework, these are secondary issues. The big issue concerns the investment climate, the economic environment, and stimulus for promoting entrepreneurship.”
Kirill Androsov
“The main reason that private equity is such a small sector in Russia and occupies such a relatively insignificant place in the Russian economy is the fact that Russia’s financial markets are underdeveloped. There’s no “long” money in Russia’s financial markets that is available to a fund like ours.”
Dmitry Krukov
“In domestic flow of capital and over-the-border flow of capital, Russia ranks very high. It is the only BRIC country where there are essentially no capital controls for foreign investors coming in and going out.”
Drew Guff
“I am fully convinced that completely lifting the annual yield requirement is a fundamental prerequisite for transforming pension fund money into an investment resource.”
Anatoly Chubais
“We may be lacking a legislative base, an institutional framework, but the main thing is that we don’t see much demand for private equity as an institution because economic development has been weak. Probably, we must change the economy above all by creating incentives for growth and for attracting investment, and then we will see the pace of things accelerate.”
Boris Titov
“As for how we overcame the challenges we saw on the market, it may have been that in almost every case we chose strong partners, and never took a controlling stake but always took a minority stake. And, for us it was critical to have a good partner that knew the local stock exchange, local laws and local political scene better than we did.”
Nicholas Jordan