VTB recruits 20 for sovereign wealth unit

Financial News

Jason Corcoran in Moscow

09 June 2008

Russian state-controlled bank VTB has created a dedicated unit of 20 bankers to act as a conduit for sovereign wealth funds looking to tap the global capital markets.

Ivan Ivanchenko, who has joined VTB from Deutsche Bank’s global markets team, is in charge of building the operation and developing links to sovereign wealth funds in the Middle East and Asia.

The operation is expected to be involved in managing a large amount of Russia’s $32.6bn (€21bn) National Prosperity Fund, which is scheduled to begin investing in foreign stocks and corporate bonds from October.

Ivanchenko said: “The sovereign funds and their counterparties are considering big allocations to Russian corporations. So far, we have 20 staff involved from sales and trading, research and global markets but it is a floating number and in the set-up stage.”

Sovereign wealth funds hold $2 trillion in assets globally, and are forecast to grow sixfold by 2015.
Goldman Sachs and Morgan Stanley have moved staff to the Middle East to target funds based in the region.

Barclays Capital named Gay Huey Evans, formerly a top banker in Citigroup’s alternative investments division, to a new post in March covering sovereign wealth funds.

Ivanchenko said Temasek, Singapore’s $100bn sovereign wealth fund, is closing in on investments in Russian energy and the infrastructure sectors.

While on a business trip to Singapore, he said: “Temasek’s previous experience of investing in Russian IPOs was mixed and they want to outsource investments to firms that can manage PR and overcome any local difficulties and prejudices that might exist.”

VTB is establishing investment banking hubs in Moscow, London, and Singapore and has recently recruited 60 bankers from Deutsche Bank.

It has hired Timofey Demchenko from Deutsche Bank to run its private equity and special situations department, along with Dmitry Skryabin as head of energy and utilities research from Aton Capital, the Russian banking business of Italy’s UniCredit.

Russian Finance Minister Alexei Kudrin has backed VTB’s bid to manage the National Prosperity Fund, which was spun off from its main oil stabilisation fund in January.

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