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Baring closes E108m Russian fund

Baring Vostok Private Equity Partners returns to Eastern Europe with the first direct investment fund since the 1998 crisis.

Baring Vostok Private Equity Partners, part of Baring Private Equity, has raised a $100m (E108m) private equity fund earmarked for direct investment in Russia and a number of Newly Independent States (NIS) including the Ukraine.

The vehicle, which will seek to acquire businesses in the oil and gas, telecoms, forestry, consumer goods and IT sectors, is Baring Vostok’s second fund raised for the region. In 1994, Baring Vostok raised $160m for investment in the same sectors.

Baring Vostok's first NIS fund, which was launched in 1994, drew $160m in capital and has so far returned $225m in dividends to investors. It still has substantial or controlling stakes in 12 businesses.

Michael Calvey, managing partner of Baring Vostok, said “Baring Vostok weathered the 1998 financial crisis in Russia and still managed to consistently generate excellent returns for our shareholders. Now the economic, political, and business environment is healthy and steadily improving, yet entry prices for private investments are much lower than in previous years due to global market conditions and the lack of competition in Russia at present. This combination creates potential for extraordinary returns as asset prices in Russia go through a major re-rating over the next 5 years.”

The new fund will be managed by Michael Calvey, Andrei Terekhov, Alexei Kalinin and Andrej Terekhov, who are hoping to benefit from relatively low prices for private investment due to the relative scarcity of private capital in the region.