Russia sovereign wealth fund in talks with potential Chinese partner
Russia Direct Investment Fund (RDIF), the country’s new sovereign wealth fund, is in talks with a Chinese group about making joint investments, with details of a partnership potentially to be announced in October.
Kirill Dmitriev, CEO of RDIF, told Bloomberg that the partnership would invest in deals "that benefit from the Russia-China relationship and Russia-China trade." He declined to give further details.
RDIF is currently working on 20 deals, worth a collective $5 billion, and expects to complete a set of transactions by early next year. Dmitriev said that talks are being held with a European pharmaceutical company seeking to expand in Russia and a sovereign wealth fund about a potential $1 billion investment.
The Russian government has pledged $10 billion to RDIF over the next five years as it aims to attract an additional $50 billion of co-investment from foreign buyout firms, sovereign wealth funds and companies seeking to expand in the country.
When RDIF was launched in January, its stated purpose was to attract foreign investment amid efforts to deepen capital markets and help Russia diversify its economy, which is highly dependent on oil, natural gas and metals exports. The fund is supposed to secure an equal contribution from a co-investor for each deal it makes, with a view to acting as a catalyst for the direct investment into Russia.
RDIF last week announced its international advisory board, which includes the chairmen of China Investment Corp. (CIC) and Korea Investment Corp. (KIC), the managing director of Kuwait Investment Authority (KIA), and the heads of several leading global buyout firms. The fund has also assembled its core management team with the appointment of five directors, a legal counsel and an adviser.
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