Baring Vostok closes $205m Russian fund

The Russian arm of Baring Private Equity Partners has closed the first foreign fund in Russia since the economic crisis of 1998.

Baring Vostok Capital Partners, the Russian unit of Baring Private Equity Partners, has closed a buyout fund $55m above the original target set when fundraising began in 2000. The $205m fund is the first foreign vehicle in Russia since the region’s economic collapse of 1998.

The fund, Baring Vostok Private Equity, is aimed at companies operating in Russia, the Ukraine and other independent states of the former Soviet Union. Predominantly these companies operate in the oil and gas, telecommunications, technology, consumer and media sectors and have annual sales or asset values of $20m to $400m.

The investors in the vehicle are mainly US, Canadian and Western European pension funds, said Mike Calvey, managing partner, who added the popularity of the fund was a reflection of investors’ awareness that Russia had recovered from the 1998 crisis.

Eight investments totalling $50m have already been made from the fund and a further six to eight are expected this year, said Calvey. “But we see no need to rush. We have plenty of deal flow, and will move cautiously ahead. The competitive situation here is very favourable. We will take our time.”

Calvey is one of four senior partners leading the Baring Vostok team. The others are Alexei Kalinin, Jean Michel Broun and Andrei Terekhov. The team have managed funds in the region before, including the First NIS Regional Fund, a vehicle that launched in 1994 at $160m and to date has returned around $231m in dividends.