Delta closes $120m Russia fund

Despite Carlyle’s recent abandonment of its Russian fundraising effort, Delta Private Equity has held a successful close of a $120m fund dedicated to Russia and Ukraine.

Moscow-based Delta Private Equity Partners has closed a new $120 million (€95 million) fund to focus on investments in Russia and neighbouring Ukraine.

The fund close comes less than a week after US private equity firm The Carlyle Group announced it was terminating plans for a proposed $300 million Russian fund, citing an adverse investment climate in the region.

Delta’s fellow Moscow firm Baring Vostok Capital Partners closed an oversubscribed third fund for the region on $400 million in February, with plans to invest in Russia, Ukraine and the former Soviet Union.

The Carlyle Group termintaed its $300m fund, citing an adverse investment climate in the region.

Delta will continue its strategy of investing in early and later stage investments in the financial services, consumer products and telecommunications, media and technology sectors in Russian companies.

For the first time, the firm will also make investments in similar sectors in Ukraine with up to 10 percent of the new fund being dedicated to that region.

Following the “Orange Revolution” in Ukraine last November that brought president Viktor Yuschchenko to power, private equity firms are showing more interest in the region.

Viktor Yushchenko, president, Ukraine

Aside from Delta and Baring Vostok’s interest, Kyiv-based Western NIS Enterprise Fund will reportedly soon begin fundraising for its second fund dedicated to Ukraine.

Delta, formerly known as Delta Capital Management has been active in Russia since 1994 and has invested around $300 million in 44 Russian companies through the US Russia Investment Fund, set up by the US government and the 2004 Delta Russia Fund.

Recent exits for the firm include the sale of its minority stake in CTC Media for four times its original equity investment in February and the $100 million sale of Russian consumer bank DeltaBank to GE Consumer Finance.