Russia catalyst fund comes seeking Qatari investors

Qatar’s consistently high economic growth and its global investor reputation have led Russia to seek investment from the Gulf country, Russian Direct Investment Fund (RDIF) Chief Executive Officer Kirill Dmitriev has said.

RDIF, a $10 billion fund established by the Russian government last year to make equity investments primarily in the Russian economy, is even offering a seat on its advisory board to Qatar.

Talking to Qatar Tribune, Dmitriev who was in Doha for talks with potential investors from the country, said that the fund seeks to maximise returns by making investments in sectors across the Russian economy and internationally. About 80 percent of the $10 billion fund is for investment in Russia while the remaining 20 percent is available for foreign investment.

“Each RDIF investment will have at least one co-investor, ensuring that the fund acts as a catalyst for bringing FDI and global best practices and new technologies to Russia,” Dmitriev said.

“RDIF co-investors gain increased access to Russia’s tremendous growth opportunities with the security of investing alongside a government-backed fund,” he added. He said that the fund has so far invested $1 billion out of which $800 million were from investors from the Gulf region.

Speaking on the benefits of investing in Russia through RDIF, Dmitriev said the fund focuses on investment opportunities with high return on investment (ROI).

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“We are focused on investing with our partners in projects with good return on investments in Russia and elsewhere. We look out for opportunities that have the potentials for good yields,” he said. “Also, we have set in place an 18 percent strategic downside protection guaranty on investments, which means there is a protection for all investment in case things go wrong,” Dmitriev added.

Asked about the perception that investment in Russia is a risky venture, Dmitriev said that most of the fears are unfounded but admitted that there is still room for improvement in the business climate in the country, particularly with regards to reduction in bureaucracy and the fight against corruption.

“On the positive side, private equity returns in Russia which stood at 49 percent in April, is the highest in the region and the middle class in the country has tripled in the last five years due to high growth,” he said. He added that the country’s unemployment rate, reported to be five percent at the end of June, remains among the lowest in Europe.

“Russia’s debt to GDP ratio is currently 11 percent compared to 80 percent in eurozone. The investment climate in Russia is improving,” Dmitriev said. Asked about areas in which Qatari investors have shown interest, he said that most of the investors are seeking to invest in gold, agriculture, healthcare and gas. He added that there are also potentials in renewable energy in Russia.

“The Russian government will provide a lot of subsidy for investments in the renewables sector in the near future and this is one area that has a huge potential,” he said. Dmitriev said that RDIF is looking to invest in 41 major projects over the next five to six years and that the fund is set to boost its portfolio from the current $10 billion to at least $50 billion within the same period.

source: Qatar Tribune

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