TPG Capital has purchased a minority stake in giant Russian state-owned bank VTB for $100 million, a source close to the situation told sister publication PEI.
The firm is investing alongside a number of other large investors, including sovereign wealth funds and similar strategic investors from the Middle East, Europe and Asia, in a $3.3 billion public offering by the Russian government.
VTB has been active in Russia's infrastructure market, which last year saw three big-ticket public-private partnerships reach financial close – the $2.1 billion Moscow-St. Petersburg highway, the $850m Odintsovo bypass and the €1.1 billion Pulkovo Airport modernisation project in St. Petersburg. VTB acted as financial advisor and equity co-investor on the Pulkovo Airport PPP, which was the only one of the three to be financed without government debt guarantees.
The private equity unit of VTB also recently unveiled plans to ramp up its private equity activity in 2011, with its sights set on infrastructure, oil and gas, mid-market companies, real estate and agri-business, plays.
In December 2010, TPG teamed up with global private equity heavyweights Kohlberg Kravis Roberts (KKR), the Government of Singapore Investment Corporation (GIC) and Singaporean insurer Great Eastern Life to purchase Morgan Stanley's 34.3 percent stake in China International Capital Corporation (CICC). Financial terms were not disclosed, but media reports suggested the transaction would be valued at $1 billion. Morgan Stanley said in a statement it would record a pre-tax gain on the sale of approximately $700 million.
While TPG and KKR acquired 10.3 percent and 10 percent in the Chinese bank respectively, GIC and Great Eastern will buy the remaining 9 percent and 5 percent each, a source told sister publication PEI Asia in an earlier interview.