The EBRD is considering an equity investment of up to USD 50 million, but not exceeding 25 per cent of total aggregate capital commitments, to Elbrus Capital Fund II (“Elbrus II” or “Fund”), a private equity investment fund registered in Cayman Islands as an exempted limited partnership.
Elbrus Capital was launched in 2007. Elbrus II will follow a buy-and-build strategy – in a typical investment, the Fund will make a platform acquisition followed by a number of add-ons to create value through accelerated growth, improved profitability, improved corporate governance and valuation multiple expansion. The majority of the Fund’s investments will be across Russia but it will also have the flexibility to invest in other CIS countries.
The transition impact of the proposed project would come from the following areas:
(i) market expansion, including development of private equity financing and transfer of private equity skills across Russia and in other CIS countries
(ii) demonstration effect for buy-and-build strategy and consolidation of companies in fragmented sectors
(iii) transfer of Western private equity knowledge and skills to the Russian private equity sector
(iv) promotion and enhancement of high standards of corporate governance and integrity in the Fund and investee companies
The Fund will be managed by Elbrus Capital Investment Manager Limited, a Cayman Islands exempted company.
The Bank will invest the lesser of USD 50 million or 25% of aggregate commitments.
The target size of the Fund is USD 500 million.
The project has been assigned a screening category of FI, as the EBRD financing is via a financial intermediary.
The Fund will be required to comply with EBRD Performance Requirements 2 (Labour and Working Conditions) and 9 (Financial Intermediaries) and implement the EBRD's Environmental and Social Procedures for Active Equity Investments. The Fund should ensure investee companies comply with national environmental, OHS, social and labour standards.
The Fund will be required submit annual environmental and social reports to the Bank.
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