Troika backs Russian factoring firm

Troika Capital Partners, manager of the Russia New Growth Fund, has invested in Eurokommerz, the largest factoring company in Russia and the CIS.

Moscow-based Troika Capital Partners has acquired a 52 percent stake in Eurokommerz, a provider of factoring solutions to small and medium-sized businesses in Russia and the neighbouring CIS countries.

The amount invested by Troika was undisclosed, but the firm’s executive director Giedrius Pukas said it was within the firm’s normal range of $15 million to $50 million.

Russian factoring is described by Pukas as a “huge market niche” given that SMEs in the country rarely receive finance from banks. Eurokommerz, which delivered 30.6 billion roubles ($1.2 billion) turnover last year, is forecast to almost double that figure to 58.5 billion roubles in 2006. Pukas said he expected the firm’s turnover to double or triple each year for the next three to four years.

Troika Capital Partners manages the Russia New Growth Fund, a joint venture between Troika Dialog Asset Management, a Russian investment bank, and Temasek Holdings, a Singapore-headquartered investment group.

The Russia New Growth Fund achieved a first closing towards the end of last year on $150 million and is expecting to announce a final close in the first quarter of next year, according to Pukas. The fund has not disclosed its final target.

According to a statement from Troika, the European Bank for Reconstruction and Development has announced plans to participate in the fund next month.