RVC InfraFund, a Russian government-backed vehicle, has teamed up with Luxembourg-based arc Asset Management to raise a €100 million fund that will invest in Italian and Russian small and medium sized enterprises.
The idea behind the “ISAM Fund” is to target Italian SMEs that want to enter Russia and likewise Russian SMEs that want to expand into Italy, Angelo Lazzari, chief executive of arc Asset Management and founder of ISAM, told Private Equity International.
“We understand that Italy and Russia can be perceived as countries with a negative investment climate,” Lazzari said. “Although Italy is going through a tough period, we see a lot of healthy companies in Italy with very good know-how. The Russian market is not an easy market, but changes are in place as we see the willingness of the government [to improve the investment climate]. As a fund we have a Russian partner which gives us credibility,” he said.
The fund expects to raise roughly half of its target from Russian investors, with the balance from Italy and the rest of Europe. Investors have so far made €25 million in soft commitments with a first close is expected in January 2014, Lazzari said.
The fund will target approximately 30 companies focused on manufacturing and technology, making average investment between €2 million and €4 million.
“We are looking to invest in businesses that are already successful in their niche market but that have a cultural gap which could prevent them from entering new markets,” Lazzari said.
Lazzari, who has worked at Italy's Unicredit Bank and is a member of the board of arc’s Iris Fund Sicav, also sits on the ISAM’s board of directors. He is joined by Riccardo Aimerito, responsible for the legal affairs of arc’s Iris Fund Sicav, and Ferdinando Pelazzo, a head of the Moscow Representative Office of the UBI Banking Group. The two other board members are Mikhail Ievenko and Aleksey Medvedev, both investment managers at RVC InfraFund.
RVCA, a Russian fund of funds, was set up by the Russian government in 2006 to support the country’s venture capital industry.