Elbrus Capital, a Russia and CIS-focused private equity firm, has closed its Fund II on $550 million, exceeding its target of $500 million and reaching its hard cap.
The fund also landed an extra $150 million of debt financing from the Overseas Investment Corporation – meaning Elbrus will have a total of $700 million at its disposal.
According to the company, the fund represents a first foray into Russian private equity for many of its investors, who include a number of institutional investors from Europe, the United States, Middle East and Asia.
A source close to the process said that some of these investors had had misgivings about Russia’s political, legal and business environment, as well as its macroeconomic fundamentals. But their decision to invest was “a sign of confidence in Ebrus' strategy”.
The Russia and CIS-focused fund operates a buy-and-build model, acquiring large minority or controlling stakes in companies in fragmented sectors with the potential for consolidation. Elbrus tends to work with companies in the consumer, business services, natural resources, healthcare and education sectors.
“The deployment of the fund is well under way with over $200 million already invested in six platforms,” Dmitri Krukov, Elbrus’ co-managing partner, said in a statement. “The fund has been able to consistently invest in the market leaders in the mid-market growing at 20 percent or more.”
Elbrus made its first investment from Fund II back in November 2012, picking up an undisclosed stake in SPSR-Express, a Russian mail and cargo delivery company. It has since invested in five other ventures, including the National Medical Network, a chain of private diagnostic centres across Russia.
Elbrus Capital has led over 70 acquisitions since 2007. It now has more than $1 billion in funds under management.
MVision acted as placement agent on the fundraise.