Swiss Buy Stake in Troika Brokerage

Anticipating years of fat cows to come, Swiss-based Hansa AG has dipped a toe into the Russian stock market, buying a 5 percent stake in Troika Dialog brokerage.


"We find it attractive to enter the Russian market now because short-term players are out," Georg von Opel, owner and president of Basel-based Hansa and a descendant of German auto pioneer Adam Opel, said Monday.


Hansa was set up in 1930 as a result of business diversification on the part of the Opel family. Five of Adam Opel's sons sold it to General Motors in 1927 for 250 million gold marks and plowed the funds into other lines of business.


Hansa is a private company and details on its financials are not available, but it is known that last year it posted a profit of more than 100 million Swiss francs ($64 million).


Georg von Opel said he intended to use Troika Dialog as a front company that could offer local expertise and tip him off on investment opportunities opening up.


"This is probably a time when foreign investors are deciding to invest in the [brokerage] industry," said Ruben Vardanyan, president of Troika Dialog.


The Swiss banker's major line of business is turnaround investment, so Hansa will be buying minority stakes in local companies and hold them for several years, betting on capital gains.


"We are looking at telecommunication companies, high-tech and, possibly, some oil companies," Opel said.


So far Hansa's investments in the Russian market total $40 million to $50 million, but Opel cautiously hopes 25 percent of the company's capital could be invested in Russia within the next decade.


Opel has experience in Asian markets and hopes to have an internal rate of return of about 20 percent on his Russian projects.


Parties to the transaction kept mum about the financial side of the deal, in which Hansa purchased a 5 percent stake from additional share issuance plus an option to buy another 10 percent in Troika Dialog in the future.


For Hansa, which invests mainly in quoted and private equity on a world-wide basis, establishing a foothold on the market through purchase of a minority stake in a local company was a new experience.


One of Hansa's recent transactions was the sale of an 18.2 percent stake in publicly traded Swiss firm COS Computer Systems AG, in which Hansa acquired its shares 3 1/2 years ago. No details of the deal were made available.


Hansa's acquisition is one of a few sales of stakes in Russian companies to strategic investors, a trend that has been gathering pace in the recent months.


The Media-MOST holding last week finalized the sale of a 4.5 percent stake in television networks NTV and THT to the Smallcap World Fund, which is part of the American Funds Group.


The U.S.-based Andersen Group Holding also last week announced a deal with local fiber-optic network operator Comcor, putting up the equivalent of $33 million in direct investment.