Billionaire Vladimir Potanin and U.S. bank JPMorgan announced Tuesday that they are creating a $1 billion fund to invest in Russian companies and may attempt to take distressed assets off the hands of state banks.
Potanin’s Interros and JPMorgan investment fund One Equity Partners said in a joint statement that they would put $500 million each into the venture — the first significant Russia-focused fund since the start of the financial crisis.
The companies said the fund would invest in the consumer goods, manufacturing and services sectors, but a source close to Interros said it would avoid the country’s flagship industries of mining, oil and gas.
The source said the fund might try to bring some state-controlled firms back into private ownership, with debt financing on the agenda as well as growth capital. “The talk is … about a possibility to lift part of the company credit burden from the state banks’ shoulders. … There is an agreement that JPMorgan bank will help us secure debt financing,” the source said.
The source added that $300 million would be about the maximum spent on a single transaction, and that some projects were already in the works.
“This is an exciting time to invest in Russia alongside an experienced … partner,” said Michael Gregory O’Hara, a senior partner at One Equity Partners, adding the fund would provide growth capital and equity as well as debt relief.
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