Russian-Kazakhstan Nanotechnology Venture Fund Moves Closer to Founding
RUSNANO, Kazyna Capital Management (Republic of Kazakhstan), VTB Capital, and I2BF Holdings have signed a memorandum of intent to establish the Russian-Kazakhstan Nanotechnology Venture Fund. The fund’s target size is $100 million. RUSNANO and Kazyna Capital Management, anchor investors for the fund, will each contribute $25 million. VTB Captial and I2BF Holdings will manage the fund’s resources. The latter are expected to attract private investments of $50 million to $100 million.
The fund, which is being established for ten years, will draw investment resources for promising projects in nanotechnology and the use of nanoindustry products in the Republic of Kazakhstan and the Russian Federation. The projects are expected to involve a broad range of economic sectors. Focus of the fund will be on transferring cutting-edge technology, creating new forms of international collaboration, and stimulating development of financial infrastructure for nanotechnology markets.
Abay Alpamyssov, chairman of the Management Board of Kazyna Capital Management, remarked that developing venture infrastructure is critical to supporting and advancing an innovative environment in Kazakhstan. “The attraction of two highly professional companies in the establishment of the venture fund is an excellent signal for other investors. Fusing different management approaches and technologies will help the management team attract additional investment to achieve targeted capitalization and ensure effective leadership for the fund.”
“We have chose management companies that can work effectively in selecting and supporting promising nanotechnology projects in Russia and Kazakhstan. Moreover, they will apply their experience in developing venture projects at the pre-industrial stage to maximize earnings for the fund’s investors,” said RUSNANO managing director Dmitry Pimkin. “Criteria for choosing projects for investment will be scientific and technical validity and forecasted return on investment.”
“VTB Capital is a leader in the Russian venture industry. Our experience in venture financing is considerable. There are currently five venture funds with aggregate value of 5.8 billion rubles under VTB Capital’s direction. This year Russian Navigation Technologies, a VTB Capital portfolio company, made the first ever IPO offering in Russia. We believe that VTB Capital’s global platform and experience will enable us to realize the potential of the Russian-Kazakh fund,” said Aidar Kaliev, head of Venture Investments at VTB Capital.
“Joint management of the venture fund is a unique approach in venture business,” noted Ilya Golubovich, managing partner at 12BF Holdings. “We are confidant, however, that our cooperation will be successful. The 12BF team has worked for a long time in Western venture investment markets, monitoring their needs and developing the most farsighted company. We are prepared to bring the global expertise of I2BF to Russia, where we already see a host of technologies for which there is demand in world markets.”
Kazyna Capital Management, registered on May 23, 2007, is a wholly owned subsidiary of Samruk-Kazyna, a joint-stock company of national (Kazakh) welfare. The company devotes its work to developing a market for direct investment in Kazakhstan. It has equity of 60 billion tenge (11.55 billion rubles); the total size of funds in which the company is an investor exceeds $2.8 billion.
Kazyna Capital Management is shareholder, along with industrial and other investors, in eight direct investment funds focusing on investment in Kazakhstan. KCM manages assets of about $1.5 billion.
VTB Capital (www.vtbcapital.com), the investment business of VTB Group, is one of three strategic directions of the group. The others are corporate and retail businesses.
In the two years since its founding, VTB Capital has become a national leader in international investment banking. At the end of the first half year of 2010, VTB Capital held first place among organizers of bonded debt and Eurobonds in the Commonwealth of Independent States and second place among book runners in the equity capital markets in Russia and the CIS (reported by Dealogic). VTB Capital held first place in the Bloomberg and Cbonds rankings of investment banks by size of transactions in the Russian debt market.
In only two years, VTB Capital has attracted more than $40 billion into the Russian economy, organizing more than 90 transactions in the debt and equity capital markets. In 2010 VTB Capital won the prestigious international award Euromoney for Best Russian Investment Bank in the Debt Market. The company’s Analytical Department also garnered a number of international awards in 2010, including the Extel Pan-Europe 2010 and the All Russia Research Team (Institutional Investor) prizes.
VTB Capital offers the full spectrum of investment and banking products and services to Russian and foreign clients. It focuses its work on organizing issues of marketable debt and equity securities, developing direct investment business, conducting trading operations, managing assets and investments, and offering clients consulting services for mergers and acquisitions in Russia and abroad.
I2BF Holdings is an international asset management group engaged in venture financing and management of hedge funds in the USA, Europe and Asia. I2BF was established in 2005. It is a diversified investment group specializing in high-technology sectors. The group has more than $100 million assets under management. It directs venture funds exceeding $80 million. I2BF Holdings’ hedge fund was a nominee for the 2009 EuroHedge Awards as the Best New Hedge Fund of the Year.