The Russian Direct Investment Fund (RDIF), a sovereign wealth fund that makes co-investments in domestic companies and projects, is to sign 100 billion roubles ($1.8 billion; €1.6 billion) of deals in the first week of June, its chief executive Kirill Dmitriev said on a conference call.
The investments will be made through the Russia-China Investment Fund, its partnership with China Investment Corporation, an Indian partner, and a handful of Middle Eastern sovereign wealth funds, among others. Companies and projects in the transport, logistics, infrastructure and mining sectors are set to be key beneficiaries.
The investments will be announced at the St Petersburg Investment Forum, which runs from 1 June to 3 June, and where one of the key themes will be sovereign wealth funds participating in co-investments. First-time participants in this year’s forum include sovereigns from Oman and New Zealand.
RDIF has invested $27 billion so far in Russia in conjunction with its network of 23 partners, with which it invests with a conservative ratio of 1:9.
In April, the RDIF coinvested with Baring Vostok Private Equity Fund V, UAE sovereign wealth fund Mubadala Development Company, and sovereign funds from Qatar, Saudi Arabia, China and Kuwait to acquire a 25 percent stake in St Petersburg’s Pulkovo Airport from Russian state-owned investment bank VTB Capital.
“[A sovereign co-investment] has not been done at this scale before and we believe this model of sovereign wealth funds and institutional investors coinvesting is a model that will grow in the future,” Dmitriev said of the deal.
Dimitriev said the fund is not seeking any more partnerships from the Middle East as it already has $20 billion of capital from the region that it is seeking to deploy in Russia. He also said the RDIF is on a “massive outreach programme to Europe”, which he expects to come to fruition this year, though he acknowledges that for many European banks and funds there is a “stigma” associated with Russian co-investment opportunities.