UFG joins Lion vodka deal

The Moscow-based asset management firm has revealed an equity investment in Lion Capital’s buyout of Russian Alcohol Group. Boris Fedorov, the former Russian minister of finance and co-founder of UFG, will join the board of the Russian vodka giant.

The private equity arm of UFG asset management has revealed a 5 percent equity stake in the leveraged buyout of Russian Alcohol Group by a consortium including the UK’s Lion Capital, Goldman Sachs and a rival vodka producer, Central European Distribution Corporation.

The $600 million (€400 million) buyout was announced in May this year and the deal completed in July. UFG took longer to formalise its part of the deal, which is understood to be worth $30 million.

Boris Fedorov, the former Russian minister who heads up UFG’s private equity division, will join the board of Russian Alcohol Group.

Boris Fedorov

At $600 million, the transaction is the largest leveraged buyout in Russia’s history, beating the 2007 acquisition of juice-maker Nidan for $500 million, also by Lion Capital.

UFG is currently fundraising for its second private equity vehicle, UFG Private Equity Fund II.  The target for the new fund is $500 million with a hard cap of $700 million, and the firm has pencilled the final closing for the end of this year.

The second fund will see UFG pursuing investments in the $25 million to $75 million bracket, a slight increase from Fund I. Investors in Fund II include the European Bank for Reconstruction and Development.