Project description
and objectives:
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VTB Venture Capital Fund (the “Fund”) is a RUB 3.061 billion (EUR 88 million) closed-end mutual fund regulated under Russian law, which will be set up in the Russian Federation by VTB Asset Management (the Fund Manager) with the sole purpose to invest in companies developing innovative technologies.
The Fund Manager has won the tender organised by the Ministry of Economic Development and Trade to access government funding from Russian Venture Company (“RVC”) for 49% equity participation in the Fund.
EBRD will commit to invest up to RUB 612.2 million (EUR 17.5 million) in the equity of the Fund alongside VTB and the Russian government. The Bank’s share in the Fund’s committed capital is 20%, VTB – 30%, RVC – 49% and managers - 1%.
The Fund Manager expects to create the investment portfolio comprising a broad group of companies (20 to 40 portfolio companies), in a range of stages of business development from start up to expansion capital. These companies will market products and services incorporating innovative solutions across a broad spectrum of technologies: communication and information technologies, industrial innovations, medicine and new materials.
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Transition impact:
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The transition impact effects of an investment in the Fund can be considered from the impact on economy and investee companies, institution building and demonstration effects, such as the following:
- Support the Russian government programme of establishing a venture capital industry. The Russian administration has allocated a significant amount of capital to seed the process. EBRD’s participation in this process if successful can have significant economic and financial effects. Besides, its investment EBRD has also been engaged in the process of changing the legislation governing the operations of investment funds in order to introduce the necessary elements of properly structured venture funds. The changes to the legislation are aimed at widening the scope of investors willing to participate in Russian venture capital industry.
- Today, the Russian venture capital industry does not exist and no allocations to it are available from the mainstream institutional investors. The demonstration effects of a financially successful investment by the Bank would be significant as it would flag the opportunity to other investors.
- A key to formation of a functioning marketplace is to create skilled investment teams and develop their track record. The proposal will support “institution building” of one new entrant to the market.
- It is perceived that technology companies in Russia do not have access to finance needed to commercialise their ideas. This Fund will help address this “equity gap.”
- Investee companies will also receive assistance from an experienced team who would actively help with strategic issues of business development, marketing and finance. It is expected that through its investment the Fund will have a fundamental and positive impact on the companies in which it invests.
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The client:
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VTB Venture Capital Fund (the “Fund”) is a RUB 3.061 billion (EUR 88 million) closed-end mutual fund regulated under Russian law, which will be set up in the Russian Federation by VTB Asset Management (the Fund Manager) with the sole purpose to invest in companies developing innovative technologies.
VTB Asset Management has formed a group of professionals who are fully devoted to VTB Venture Capital Fund. Though the Fund is a first time fund, the team members share amongst themselves significant experience in investing and/or operating the companies from the technology sectors.
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EBRD finance:
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RUB 612.2 million.
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Total project cost:
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RUB 3.061 billion.
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Environmental impact:
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This operation will require the standard covenants for FI operations, and namely:
- The Fund will apply EBRD’s Environmental Procedures for Private Equity Funds.
- The Fund will comply with EBRD’s Environmental Exclusion and Referral list.
- Compliance of investee companies with national standards for environment, health and safety, relevant requirements for public disclosure and consultation.
- Compliance with relevant national employment laws and standards and Conventions of the International Labour Organisation related to the employment of children and young people, discrimination at work, and forced labour.
- Provision of an Annual Environmental Report to the Bank.
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Technical
cooperation:
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None.
For consultant opportunities for projects financed by technical cooperation
funds, visit procurement
of consultants.
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Company contact:
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Sergey Romashov, Director,
VTB Asset Management
Novoslododskaya 22
Moscow
Russia
Tel: +7-495- 783-2132
E-mail: romashov@vtbam.ru
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EBRD contact:
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Konstantin Torgov, Operation Leader: torgovk@ebrd.com
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Business opportunities:
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For business opportunities or procurement, contact the client company.
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General enquiries:
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EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168; Fax: +44 20 7338 7380
Email: projectenquiries@ebrd.com
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