Macquarie closes Russia fund below $1bn target

The Macquarie Renaissance Infrastructure Fund, Russia’s first ever infrastructure fund, has closed with $630m of commitments after three years on the fundraising trail. The fund has only done one deal, acquiring a 16 percent stake in Russia’s largest privately owned rolling stock company.

The Macquarie Renaissance Infrastructure Fund (MRIF), a joint venture between Macquarie Group and emerging markets-focused investment bank Renaissance Capital, has reached a final close at $630 million, well below the $1 billion it was originally targeting.

MRIF is said by the managers to be the first private equity style fund targeting infrastructure projects in the Commonwealth of Independent States (CIS) member countries. These countries include the 12 former Soviet Socialist Republics such as Russia, Kazakhstan and Ukraine.

The fund started fundraising in June 2008 and reached a first close on $530 million towards the end of 2009. A source close to the fund attributed the below-target fundraise to “very challenging market and fundraising conditions”.

As well as Macquarie and Renaissance, investors in MRIF include: Vnesheconombank, the Russian state development bank; the International Finance Corporation; the European Bank for Reconstruction and Development; and Kazyna Capital, a subsidiary of the Kazakh sovereign wealth fund.

MRIF did its debut deal last December, when it invested $125 million in Brunswick Rail, Russia’s largest privately owned rail rolling stock leasing company. The investment comprised a mixture of equity and mezzanine debt with equity conversion rights which together give the fund an initial 16 percent interest in Brunswick Rail, as well as a board seat.