The proposed project involves further financing, via a follow-on fund, to the existing North West & West Russia Regional Venture Fund. The financing would enable the fund manager to continue making investments in private companies in Russia, retain the existing fund management team, and develop a number of exits from existing investments in preparation for raising private equity capital in mid-2003. The project will facilitate access by Russian medium-sized companies to equity finance. Investments will be focused on private companies with strong management, positive track record and high growth potential. The project will also enable the fund manager’s team of professionals to be retained and to prepare for the raising of private capital.
The project will contribute to the transition process in the Russian financial market by providing equity finance to private and privatised companies. Hands-on and technical assistance by the fund manager will strengthen corporate governance, strategy and operations of the investee companies. The project will further catalyse the concept of equity finance by supporting one of the more efficient fund management teams in Russia.
The fund, an unincorporated equity investment fund managed as an EBRD equity account, will make equity and equity-related investments in medium-sized Russian private companies with an aim of achieving long-term capital growth. It will take significant minority stakes in the investee companies and will provide hands-on assistance to the local management. The fund will be managed by Norum, a Nordic venture capital management company with substantial investment expertise in Russia.
US$ 27.5 million (€31.3 million) equity investment.
US$ 27.8 million (€31.6 million) equity investment.
The fund will continue to be required to comply with the EBRD’s environmental requirements for financial intermediaries which include, inter alia, complying with the environmental exclusion list, implementing environmental due diligence procedures, requiring that investments comply at a minimum with national health, safety and environmental regulations and standards and annual reporting on environmental, health and safety matters.
No new Technical Co-operation funding will be provided. However, remaining amounts from the existing Technical Co-operation funding provided by the Norwegian, Finnish and Swedish governments to the North West and West Russian Regional Venture Fund will be used to support both this follow-on fund as well as the original fund. The proceeds will be used to cover the management and investment related expenses of the funds, and technical assistance to investee companies.
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