Russian fund to target energy opportunities

The Russian Resources Fund has held a first close at $20m with commitments coming from Alfa Bank and Vostok Nafta Investment.

Russian private bank Alfa Bank has announced a partnership with Russian energy investment group Vostok Nafta Investment to launch a private equity fund targeting consolidation opportunities in the oil and natural resources sectors in Russia and neighbouring countries.

Alfa-Eco, an asset management division of Alfa Bank, and Vostok Nafta have contributed a total of $20m to the fund’s first closing, which is subject to minimum further commitments of $30m from third party investors. The fund is targeting a final close of $200m.

The fund has been set up to participate in what it sees as the last stages of consolidation in the Russian natural resources industry, which Vostok Nafta Investment chairman Adolf Lundin expects to take place over the next 18 months.

In addition to Russian investments, the fund is also expecting to also commit capital to oil and energy investments in companies operating in what was the Soviet Union. Alfa Bank chairman Mikhail Friedman said the intention was to become one of the leading private equity investors in the energy sector across the whole region.

This is the third private equity fund launched in the past month targeting investment in the energy sector. Warburg Pincus invested $100m in Insight Energy, an investment fund targeting power assets in the US and Europe, while 3i has agreed to commit £30m to oil and gas investments in and around the UK.