Support The Moscow Times!

Joint Venture Between CIC, Russia State-Backed Firm Plans $800M Tourism Fund

Kirill Dmitriyev, head of the Russian Direct Investment Fund.

A joint venture between the Russian Direct Investment Fund, or RDIF, and China Investment Corporation, or CIC, plans to raise an $800 million fund to invest in infrastructure for senior living centers and to tap rising Sino-Russia tourism, a top executive at the Russian state-backed fund said Monday.

The move is the latest in a series of partnerships and funds developed by RDIF, a $10 billion sovereign wealth fund set up in 2011 to attract strategic investors who have steered clear of Russia due to concerns over rampant graft and the rule of law.

RDIF will hold a stake in the fund through Russia-China Investment Fund, or RCIF, a private equity firm established with China's sovereign wealth fund CIC in 2012, RDIF chief executive Kirill Dmitriev said in an interview.

"We will hold a controlling stake, but will raise the rest of the fund from international partners," Dmitriev said ahead of Tuesday's signing ceremony in Shanghai for a series of Sino-Russian deals.

President Vladimir Putin arrives in Shanghai on Tuesday on a two-day visit, where he is expected to sign a number of other deals.

China is the second most popular destination for Russian tourists. In 2012, 3.3 million Chinese tourists visited Russia, a three times increase on 2007, Dmitriev added.

RCIF is a $2 billion private equity fund and nearly half of that has been invested so far, Dmitriev said. Seventy percent of the fund is earmarked to be invested in Russia.

FDI into Russia reached a record $94 billion in 2013, an 83 percent increase on 2012. Russia ranked third globally behind the U.S. and China on FDI volumes, according to the United Nations Conference on Trade and Development.

Dmitriev said the RDIF's investors have expressed concerns over Western-led sanctions against Russia and their economic and political impact.

"All investors and business people we talk to are against sanctions. We oppose them because we believe the best solution to the situation in the Ukraine is to encourage peaceful dialogue," said Dmitriev.

In April, RDIF signed a memorandum of understanding with Bahraini sovereign wealth fund Mumtalakat prompting the U.S. to issue a statement stating its disapproval.

… we have a small favor to ask.

As you may have heard, The Moscow Times, an independent news source for over 30 years, has been unjustly branded as a "foreign agent" by the Russian government. This blatant attempt to silence our voice is a direct assault on the integrity of journalism and the values we hold dear.

We, the journalists of The Moscow Times, refuse to be silenced. Our commitment to providing accurate and unbiased reporting on Russia remains unshaken. But we need your help to continue our critical mission.

Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just 2. It's quick to set up, and you can be confident that you're making a significant impact every month by supporting open, independent journalism. Thank you.

Continue

Read more