Temasek Holdings Pte., the Singapore government's investment company, is doubling its fund investing in Russian companies to $300 mln by April, said Ruben Vardanian, chairman of Troika Dialog, a Moscow-based investment bank which jointly manages the fund.
The fund, called the Russia New Growth Fund, started with capital commitments of $150 million in November 2005. It targets returns of about 35% from investments in retail, entertainment and financial businesses in Russia, the world's largest oil producing country after Saudi Arabia, Vardanian said in a telephone interview on March 2. The Russia New Growth Fund has increased to $235 million after attracting new investors last year, including European banks and private-equity funds from the US and Asia, Vardanian said. Russia's economy, boosted by high oil and gas prices, is set to expand 6.05% this year, its ninth year of expansion, the Economy Ministry said last month. Temasek, owned by Singapore's finance ministry, is investing outside the Southeast Asian nation in a bid to lift returns, which averaged 3% a year in the decade ended March 2004. „The private equity business in Russia will grow very rapidly,” Vardanian said. „We believe there will be big interest from Russian companies to raise money through private equity.” The fund is „looking at three or four transactions in the next couple of months” which may involve investments in financial or retail businesses, Vardanian, who owns about 65% of Troika, said. Troika's book value has increased to $450 million, from $300 million five months ago, he said. Troika will consider setting up another private-equity fund to invest in Russian companies and has yet to decide if it will be another venture with Temasek, Vardanian said.
Temasek, which managed investments of S$129 billion ($84.5 billion) as of March last year, in 2004 bought at least $300 million in shares of OAO Mobile TeleSystems, Russia's largest mobile-phone company. Temasek and Alfa Bank, Russia's biggest private bank, in July 2005 bought about a 12% stake in Amtel-Vredestein NV, Russia's third-biggest tiremaker, for $70 million. Troika may open a representative office in Singapore by the end of the year, and is studying the possibility of starting a brokerage business in the Southeast Asian nation, Vardanian said. The bank first needs to sort out some „legal, corporate governance and other issues,” he said. Asian investors are increasingly seeking to invest in Russian equity and debt markets, he said.
„We are becoming more and more transparent,” Vardanian said. „Asian investors investing in India and China are looking at other opportunities and Russia is one of the few big countries with the potential for growth.” Russia's largest banks, including OAO Gazprombank, plan share sales as Russia's economic boom increases demand for loans among consumers. Sberbank, Russia's biggest bank, sold about 230 billion rubles ($8.8 billion) of shares in February, in the country's second-biggest stock sale. State-run oil producer OAO Rosneft raised $10.7 billion in an initial public offering last year in the country's largest stock sale. Troika, which has 14 branches across Russia, will also expand its private banking business, Vardanian said. „More and more Russians are making use of the banking services, not just putting in deposits but are getting the broad range of services,” he said. „We believe it's a huge growth potential for market penetration.” Troika has about $4 billion under management, of which $1.2 billion comprises of mutual funds and $2.3 billion are private banking assets, he said. The number Russians who invest in mutual funds is set to increase to about five million in the next five years, from about 400,000, he said. (Bloomberg)