Real assets part of ambitious VTB plans

The Russian bank’s private equity team’s plans include a $500m mid-market fund and various types of real asset investment programmes.

The private equity unit of the giant Russian state-owned bank VTB Group is planning to ramp up its activities in 2011, with its sights set on mid-market private equity companies, real estate, oil and gas, infrastructure and agri-business plays.
 
The firm, which is led by Deutsche Bank’s former private equity head in Moscow Tim Demchenko, has plans to raise a traditional blind pool private equity fund to invest in mid-market Russian companies, with an ultimate target fund size of up to $500 million. A first close is slated for the third quarter on between $200 million and $250 million assuming everything goes to plan, said Tim Demchenko in a recent interview with PEI.
 
The group is also planning to expand its real estate investment activity. In April it sealed its first deal from a $150 million real estate pledge fund, which it raised from a Middle Eastern sovereign wealth fund. With most of this capital deployed via the first transaction, VTB is in discussions to raise a further $350 million from three new investors.
 
Other areas the 16-person team is currently exploring include infrastructure, oil and gas assets and agriculture.