EBRD invests in Moscow buyout firm

Financial News

Jason Corcoran in Moscow
19 June 2009
The European Bank for Reconstruction and Development has approved a $50m (€36m) investment with Moscow-based private equity firm UFG Asset Management, as fund-raising activity in Russia bounces back.

The investment comes days after it was disclosed that Robert Sasson, the former head of the St Petersburg office of the EBRD, is to join UFG as a senior managing partner of its private equity business. Sasson is to co-head UFG Private Equity alongside Charles Ryan, a former chief executive of Deutsche Bank Russia who started his career at the EBRD.

A spokesman for the EBRD in Moscow said Sasson had left the development bank some time ago and had worked for the hedge fund Moore Capital before taking up his UFG position.

The UFG Private Equity Fund II, whose target is to raise $200m, has just had its first closing at $150m and is aiming for the second and final closing towards the end of the year. The fund will invest in a diversified portfolio of investments over three years and take stakes in mid-market companies, particularly those requiring a restructuring of their capital base

The EBRD, which has committed over $900m to Russia-focused private equity funds since the Bank made its first such investment in 1993, previously invested $50m with UFG’s first fund. It has also previously invested $35m in the Russian New Growth fund, a joint venture between Troika Dialog and Singapore sovereign wealth fund Temasek.

UFG is just one of several raising funds to be raising cash in the region. Russia Partners, a wholly-owned subsidiary of New York based Siguler Guff & Company, recently raised an $800m fund to invest in consumer and basic industries in Russia and other former Soviet states.

Italian insurance firm Generali last week launched a new private equity firm with PPF, a financial group set up by Czech financier Petr Kellner/ The firm PPF Partners, which has already raised €615m ($855m), will focus on purchasing assets in Central and Eastern Europe, with Russia the key market.

Swedish investment group East Capital also said in April it is raising a new private equity fund aiming at Eastern European listed companies. The East Special Opportunities Fund is targeting a $100m maximum size with €35m being seeded by the company.