Baring Vostok Capital Partners announced last week that it has put together a new $1.5 billion private equity fund – Baring Vostok Private Equity Fund V, or BVPEF V – which now stands as the largest in Russia’s private equity business.
The new fund is generally expected to follow in the strategic footsteps of its four predecessors, prioritizing investments for well-established leaders in four areas: IT, including Internet, software development, media and telecommunications; financial services; FMCG and consumer services; and natural resources.
According to Michael Calvey, founder and senior partner at Baring Vostok Capital Partners (BVCP), the new fund will develop a portfolio of 10-15 assets maximum; its focus will be on midcaps with potential for explosive growth, supporting business expansion or consolidation (or a corporate takeover).
The BVPEF V fund was raised from a group of over 40 global institutional investors with a track record of prior Baring Vostok investments (primarily pension and university funds). These veteran investors from Europe, the U.S., the Middle East and Asia were joined by a group of ten new ones. Russia continues to be a priority area, Calvey said, while adding that the funds also had vested interests in Kazakhstan, Ukraine and other former constituent countries of the USSR.
Prior to raising BVPEF V, Baring Vostok had set up some $2.2 billion worth of funds, which from 1994 to the present have collectively invested in 60 companies from a broad range of sectors in Russia and the CIS. So far, 42 of the 60 projects have been exited, completely or partially, with an IRR of about 40%.
The Baring Vostok funds have made a number of bellwether investments in Russian companies over the years. With over $500 million pumped into the Internet / software / media / telecom segment, for example, the funds now own stakes in the leading Russian-language search engine, Yandex (which received a BVPEF investment in 2000 and went public in 2011); e-commerce operator Ozon.ru; outdoor advertising operator Gallery; media holding CTC Media; telecom operator Er-Telecom; broadband operator Enforta; online video service ivi.ru; and others. For the financial services sector, the Baring Vostok funds have ponied up more than $350 million and have holdings in Kaspi Bank, Europlan, TKS-Bank, Oriental Express Bank, First Collection Bureau and others.
At a time when investors have been displaying mixed emotions about Russian markets, Baring has set difficulties aside and once again raised a sizable fund, commented Vladimir Andrienko, Managing Director of Russia Partners, another major private equity fund operating in Russia. “In partnership with RDIF (a PE investment fund 100% owned by the Russian government – editor’s note), they are reopening doors into Russia for international capital,” Andrienko observed.
Source: Kommersant
