The proposed project envisages commitment of up to US$ 50 million to Russia Partners II, LP (RP II), the successor Fund to Russia Partners, LP (RP), managed by Russia Partners Management LLC, a wholly-owned subsidiary of Siguler Guff & Company, LLC. Part of the private investors' commitment to the Fund will be guaranteed by the Overseas Investment Corporation (OPIC).
The Fund's objective is to seek intermediate and long-term capital appreciation through negotiated transactions involving primarily equity and equity-like investments in companies operating in Russia and the independent states of the former Soviet Union.
The Russia Partners Fund is well-positioned to meet the transition criteria of EBRD by having one of the most experienced and dedicated private equity teams.
By investing in RP's follow-on fund, EBRD will support a leading private equity group with a strong franchise in the region, thus contributing to the development of the local private equity market and consolidation of scarce financial resources in the hands of the best qualified and successful managers.
The Bank has an existing business relationship with RP which, since 1999, has been managing the Lower Volga Regional Fund (LVRVF), one of the Bank's sponsored Regional Venture Funds. RP will continue using both the human resources and deal pipeline of the LVRVF for the new Fund which can be also regarded as yet another step in realisation of the Bank's strategy aimed at privatization of the RVF Program.
RP will continue its enterprise reform work that has been a corner stone of their successful activity in Russia, particularly in start-up and restructuring transactions. The RP manager's focus on financial transparency and corporate governance greatly assisted portfolio companies to improve those areas and strengthen management teams. Replication and extension of such an approach is expected with the new Fund.
This focus will also allow the Fund's portfolio companies to become investable and encourage reluctant foreign corporate investors looking to establish further market presence in Russia.
Russia Partners II, LP is the successor Fund to RP I, managed by Russia Partners Management LLC. The Fund's sponsor, Siguler Guff & Company, LLC - the former Private Equity Group of Mitchell Hutchins/PaineWebber, is a multi-strategy private equity investment firm serving institutional and high-net-worth individual investors in the United Sates. The firm's Russian activities date back to 1993, when Siguler Guff became the manager of the first OPIC-backed Fund for Russia, Russia Partners I, LP, with a total capital of US$ 155 million.
Apart from this fund, Russia Partners manage three funds in Russia/CIS: Defense Enterprise Fund, Commonwealth Property Investors, and the LVRVF.
EBRD is to invest up to US$ 50 million in Russia Partners II, LP. The Fund's ultimate structure is to be comprised of both a Master Fund and a series of separate feeder funds to accommodate various groups of investors with different investment constraints. One of the feeder funds is an OPIC feeder fund whose investors will be partially guaranteed by OPIC. The target level of OPIC feeder's commitments will be US$ 140 million (out of total target Fund size of US$ 250 million).
The General Partner of the Fund will be Russia Partners Capital II, LLC a limited liability company organized under the laws of Delaware, and wholly owned by Siguler Guff & Company.
Up to US$ 50 million.
The Fund will follow OPIC's Investment Funds Policy. In implementing this policy, the Fund will assess potential environmental issues associated with its investments which are required to comply with local/national health, safety, environmental and public consultation requirements and with applicable World Bank Guidelines. The Fund will comply with a combined OPIC / EBRD Environmental Exclusion List, covering all EBRD excluded projects and OPIC Categorical Prohibitions.
The LVRVF is supported with US$ 20 million in TC funding from the USAID. The TC is being used for fund manager costs and associated consultancy costs.
No TC for the other funds managed by Russia Partners including Russia Partners II, LP.
Drew J. Guff, Managing Director
Kenneth Burns, CFO, Managing Director
Siguler Guff & Company, LLC
Rockefeller Center International Building
630 Fifth Avenue, 16th Floor
New York, NY 10111, USA
Tel: +1 212 332 5100
Fax: +1 212 332 5120
Vladimir Andrienko, Managing Director
Russia Partners Management, LLC
14 Stoleshnikov per., 2nd
Russia, Moscow, 103031
Tel: +7 095 2343095
Fax: +7 095 234 3099
For business opportunities or procurement, contact the client company.
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Text of the PIP