By Marcus Williams
Elbrus Capital has been launched a new Russian private equity firm, following last year’s purchase of Renaissance Private Equity from Renaissance Group.
Renaissance raised $660m for one of Russia's biggest buyout funds over two years ago. The business was spun off by the bank in December 2009 and the fund was sliced in half to $325m.
Renaissance, headed by the ‘kiwi oligarch’ Stephen Jennings, cut its stake to $80m from $250m leaving some cash on the table for new deals.
The buyout operation realised substantial losses through investments in Ukraine and Africa, according to a report by Russian business paper Vedemosti last year. A number of senior executives also parted company during the financial crisis.
After the spinout, the fund was restructured and is making investments again. The team has expanded by hiring "several professionals with backgrounds in operations and private equity investments in Russia."
Elbrus said it is looking to invest the fund’s remaining capacity of approx $180m during 2010. The group will focus on mid-market investments in consumer, education, healthcare, real estate and natural resources.
The fund’s existing portfolio consists of pre-crisis investments in DST, a leading Russian internet group (Mail.ru, Odnoklassniki.ru, VKontakte.ru, Facebook), an automotive retailer in Siberia and Media One, a Russian TV and radio business.
Dmitri Krukov said in a statement: “The Russian entrepreneurs and medium size businesses are starved of long term equity capital. One of the reasons for this capital shortage is lack of established, professional private equity institutions. Our ambition is to address this gap.”
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