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Troika seeks $850m for Russian mid-market

The private equity arm of Russia’s largest independent investment banking group held a $154m first close in August on its third fund, which it hopes to close next year. Fellow Russian mid-market-focused firm Delta is raising a $500m fund.

Troika Capital Partners is raising $850 million for TCP III, its third fund targeting mid-market opportunities in Russia and other CIS countries. The firm held a first close in August, having raised $154 million from existing investors.

“The fundraising environment is certainly tough, but so far we are progressing as planned,” Troika director Vladimir Kozlov said in an interview.

The fundraising environment is certainly tough

Vladimir Kozlov

TCP III’s predecessor was the $345 million Russia New Growth Fund, which was a joint venture between Troika and Singaporean investment group Temasek Holdings. It was launched in 2006, closed on $345 million in 2007 and is now almost fully invested.

Limited partners in Troika’s previous funds include Goldman Sachs, AXA and the European Bank for Reconstruction and Development. According to its website, the EBRD has committed $50 million to TCP III.

Russia: money for the mid-market

The strategy for TCP III will mirror that of its predecessor, making investments of between $25 million and $100 million in consumer-related sectors, such as retail, financial services, entertainment, media and healthcare.

Troika was founded in 2005 and is part of the Troika Dialog group, Russia’s largest independent investment bank.

Troika is not the only firm currently braving tough fundraising conditions to market a significant Russia-focused fund. Delta Private Equity Partners began marketing its third fund in June, targeting $500 million for investment in the Russian mid-market.