Working Day

27 march, 2012 13:40

Prime Minister Vladimir Putin meets with Russian Direct Investment Fund CEO Kirill Dmitriev

Prime Minister Vladimir Putin meets with Russian Direct Investment Fund CEO Kirill Dmitriev
Vladimir Putin and Kirill Dmitriev discussed the initial results of the recently established Russian Direct Investment Fund, which has already concluded a billion dollars worth of deals. According to its CEO this shows that foreign investors have trust in the Russian market.

Transcript of the beginning of the meeting:

Vladimir Putin: Mr Dmitriev, I understand the fund has officially started working only recently. It was registered in January, correct?

Kirill Dmitriev: Yes.

Vladimir Putin: You have already concluded a billion dollars worth of deals. You're off to a flying start and I’d like to congratulate you on this.

Kirill Dmitriev: Thank you very much, Mr Putin.

Vladimir Putin: What can you say about your cooperation with foreign partners and the relevant funds? Last year we met with their representatives in Moscow. The mood was combative and positive. And, most importantly, what about your work with potential direct investment? What about your potential partners?

Kirill Dmitriev: Mr Putin, thank you very much for this opportunity to brief you on the initial results of our activities following your meeting of May 18, 2011 with investors that have more than two trillion dollars at their disposal.

We worked actively towards the formation of the fund, and, as you have noted, have already invested a billion dollars, of which $200 million came from our fund and $800 million from our partners, our co-investors. It is very important that investors are actively bringing their money to Russia.

The main principle of our fund is that we invest our money when we receive at least the same amount from our co-investors. This allows us to attract investment to Russia and make the right decisions. Both we and our co-investors are involved in the decision making.

In a short span of time we have managed to accomplish what takes years in many countries. We have established a professional team very quickly. Our Expert Council includes leading international investors, such as the heads of the sovereign wealth funds of China, South Korea and Kuwait and celebrities of the investment business, such as Leon Black, David Bonderman and Apax CEO Martin Halusa. We don’t pay them anything. Their membership in our council reflects their interest and faith in Russia. They praise Russia for the fact that its middle class has tripled in the past five years.

We have just taken a tour of Russia with investors. They are very interested in the economic growth of the regions and our cooperation with them is very active. Importantly, we have concluded an agreement on a one billion dollar investment with China’s Investment Fund. Mr Dmitriev (head of Vnesheconombank) and I have just visited the Middle East, where one of the leading local sovereign funds wants to invest in all automatic co-investment deals of our fund.

Vladimir Putin:  So, it wants to co-invest with your fund.

Kirill Dmitriev: Yes, and it wants to take part in all our deals, which is unprecedented. For them, for this large sovereign fund, this will be the biggest investment ever.

I’d like to say a few words about our deals. We have made our first investment into the MICEX-RTS stock exchange. We wanted to show that investors have faith in the Russian financial market. We also involved the European Bank for Reconstruction and Development, our important co-investor, before the stock exchange IPO. Our second deal was one of the biggest in the energy market. We invested $625 million into Enel OGK-5, including $140 million from us and the rest from our co-investors. These funds went to Inter RAO UES. They were intended for the development of its investment programme. This was an important deal.

Vladimir Putin: How much went into Inter RAO UES?

Kirill Dmitriev: $625 million. All money will go towards the investment programme. The third deal that we have signed as a tentative agreement is also very interesting. This deal is in medicine. We have signed a tentative agreement with the world’s biggest investor in medicine. This fund wants to invest in private medicine in Russia. The entire sum will be spent on developing clinics and upgrading medical services. To sum up, we are operating across many industries and are bringing smart money to them. This money is invested by people who have a great deal of trust in Russia.

We are also exploring some opportunities abroad. Europe is undergoing a crisis and prices on assets have taken a dive. We are discussing some point strategic investment deals in Europe that may be of interest to Russia strategically, with the United Aircraft Corporation.

To conclude my short report I’d like to say that we are very active and we are able to see that investors believe in the growth of our economy. They see for themselves that Russia remains stable following the elections. The recent successful elections were very important for them and now they want to invest more and more into our economy.

Vladimir Putin: I’d like to congratulate you again on this flying start. Your fund has invested a lot during the merger of the two stock exchanges and I think now it is time to take the next step. You must work with our business that is planning to sell their shares to the public. It is important to float IPO primarily on the Russian market.

Kirill Dmitriev: Absolutely. More and more companies that we want as co-investors are planning to sell their shares in Russia because they see opportunities for accumulating long-term capital here. Our stock exchanges have gone up so much in value because more and more companies want to float IPO in Russia.

Vladimir Putin: I have one more proposal. As you recalled, last May we all met with the heads of major global investment funds. We must maintain our dialogue with them. Please, invite them to a regular meeting in St Petersburg during the economic forum.

Kirill Dmitriev: Mr Putin, we will certainly do that. We have already discussed this with them. In fact, all of them are ready to come to this forum and would very much like to meet with you if you have the time. You will remember that Leon Black met with you in Sochi. They have a very warm attitude towards Russia and would appreciate this opportunity.

Vladimir Putin: It's agreed. Thank you.