Russian asset management company Leader has teamed up with Shenzhen Capital Group to create a new tech fund. The news was reported yesterday by Russian business daily Kommersant, which cited exchanges with Leader and other sources with knowledge of the deal.
Dubbed ‘Russian-Chinese Technological Fund’ (RCTF), the fund plans to invest $100 million in such fields as new energy, IT (including AI, robotics and Big Data), and telecom. Some $10 million on average will be invested in each project and the Chinese partner will help the Russian portfolio companies develop on the Chinese market.
Created in 1993, Leader is owned by state giants Vnesheconombank (VEB), Gazprom and affiliated structures. It usually invests in the oil, gas and related industries.
Shenzhen Capital was founded in 1999 with participation from the Shenzhen regional government. Its investments cover the fields of IT, Internet, new media, biopharma, new energy, environmental protection, chemical engineering, new material, high-end equipment manufacturing, consumption goods, modern service, etc., in line with Chinese government policies. As of June 2018, the group’s investment totalled 37.6 billion RMB (approximately $5.6 billion). According to its website, 140 of its 889 portfolio companies have been listed in 16 capital markets worldwide.
A series of bilateral funds
Over the past years, several large Russian and Chinese organizations (mostly government-backed) have announced a series of initiatives to develop high-tech projects involving the two countries. Through these programs, Russia hopes to facilitate technology transfers from both sides and increase the share of high-tech in Russian export. The experience of China’s public policies to support innovation may also be a source of inspiration for Russian policy makers.
Among the main announcements in this field, as reported by East- West Digital News, have been the following:
- In January 2016, Rusnano, Russia’s national nanotech investment corporation, and Zhongrong International Trust, a major Chinese investment and banking corporation, agreed to launch a joint $500 million fund in the field of nanotechnologies.
- In June 2016 Rostec, a state-owned conglomerate, and China CYTS Industrial Development announced a fund with “an initial $4 billion target” to develop projects related to China’s ‘One Belt One Road.’ Under plans, a part of the fund’s resources will be used to fuel jointly-approved Russian IT and other high-tech projects;
- Almost simultaneously, Russia’s sovereign fund RDIF agreed partnerships with several Russian and Chinese industry players to develop and manufacture medical robots;
- In November 2016, the Russia-China Investment Fund (RCIF, backed by sovereign funds from both sides) agreed with Chinese TUS Holdings to establish a joint Russia-China Venture Fund (RCVF). This fund will invest “up to $100 million” in the development of trade and economic, investment, scientific and technological cooperation between the two countries. Among the fund’s targets are Russian tech companies, including startups, with a potential for further development in the Chinese market.
- In June 2017, VEB and Chinese Harbin Bank signed a memorandum of understanding and a framework agreement to launch a group of funds with a total target amount of $700 million to support innovative projects. These Russian-Chinese funds will aim to stimulate R&D in the industrial sector, support high tech export, and promote bilateral trade and economic cooperation, according to VEB. Their fields of intervention include industrial technologies, software, Internet, digital multimedia, e-commerce, communications and semiconductors.
- That same month, Harbin Bank agreed to join SBT Venture Capital, an investment vehicle of Russia’s national savings bank Sberbank, investing in it up to $50 million. While the Chinese bank is eyeing Russian fast-growing tech companies, SBT Venture Fund – which had invested so far essentially in Western countries – seeks to co- invest in Chinese tech companies.
Not all of these initiatives, however, have had a noticeable practical effect on the Russian tech scene.
