(MENAFN- Khaleej Times) The two state-led investment companies of the UAE and Russia have set up an investment fund to invest in Russia.
The Russian Direct Investment Fund (RDIF) and Mubadala Development Company have launched a $2 billion co-investment fund to pursue opportunities in Russia, says an announcement made on the sidelines of the St Petersburg International Economic Forum 2013 by Kirill Dmitriev, chief executive officer of RDIF, and Khaldoon Al Mubarak, chief executive officer of Mubadala.
"The fund will predominantly focus on long-term investment opportunities across a range of industry sectors, acting as a catalyst for direct investment in Russia," the announcement said.
Mubadala and RDIF are each committing $1 billion. The majority of Mubadala's commitment will be deployed in opportunities that will be evaluated on a deal-by-deal basis while some of the capital will be invested as an automatic co-investment into RDIF deals.
Dr Qaiser Anis, managing director of Abu Dhabi based consultancy Alliott Hadi Shahid, said this is the first such investment fund to explore opportunities in Russia.
The economy offers tremendous opportunities for investors but corruption and others problems have prevented Arab investments there, he said.
Anis said Russia offers higher returns on investment and Abu Dhabi investments there would be extremely fruitful for both.
The managing director hoped the partnership with RDIF will go a long way in the boosting the bilateral economic ties between the UAE and Russia.
"It will encourage GCC investors, to invest there," he said. Setting up of an Investment fund in Russian is part of Mubadala's plans to establish a strong presence in key international markets.
Russian Direct Investment Fund was established in June 2011 to make equity investments in the Russian Federation. RDIF's management company is a 100 per cent subsidiary of Vnesheconombank. In each investment it makes, RDIF is mandated to secure co-investment that as a minimum matches its commitment, thus acting as a catalyst for direct investment into the Russian economy.
Kirill Dmitriev, who was working on the new fund, termed it a "unique partnership" with Mubadala, as there are many synergies between both companies.
"Mubadala's experience and track record in multiple industry sectors will enable significant value creation in our co-investments, and will increase foreign direct investment from Abu Dhabi into Russia," the chief executive said. He said the new joint venture will be another major step in strengthening business collaboration.
Al Mubarak, hoped the collaboration will deliver long-term financial returns and development opportunities.
Mubadala has a multi-billion dollar portfolio of local, regional and international investments. The company has many successful partnership with leading global organisations in wide ranging sector such as aerospace, semiconductors, metals and mining, oil and gas, renewables, information and communications technology, healthcare, real estate and infrastructure, and services.
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.