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A_Dobrynin_Lanscape_&_Evolution_of_PE_market

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  • 1. N ew R ussia G rowth Private Equity Advisors Landscape and Evolution of Private Equity in Russia Andrey Dobrynin Managing Partner June 2010
  • 2. Presentation roadmap
    • Russian economy: is the crisis over?
    • PE landscape: fundraising, deals and exits
    • Investment ideas
    • How will Russian PE industry evolve in the next few years?
  • 3. Russian macro picture Source: RTS Source: State Statistics Committee Source: State Statistics Committee Source: Central Bank of Russia
  • 4. PE landscape
    • Before the crisis: 18 Professional GPs (with assets of more than $150m) with total AUM $6bn
    • Fundraising in 2009-2010:
      • Almost no new institutional money
      • Few funds with private LPs
    • Recent deals
      • Financing and buyout of portfolio companies
      • Venture capital deals
      • Few large deals
    • Exits
      • Only few completed exits
  • 5. What is NRG
    • Independent alternative investment manager
    • Volga River One: size - $177m, first closing - 2006; number of LPs – 20
    • 6 investments: telecoms, retail, food production
    • Volga River Growth – fundraising $250m
    • Target 1st closing: Q3 2010
    • EBRD expected to be a core investor
    • 2 club deals closed
  • 6. What happened to PE investments? % of bad loans to total portfolio of Russian banks Broad-band Internet subscribers, m Source: NRG estimates Source: State Statistics Committee Source: PWC, NRG estimates Source: State Statistics Committee
  • 7. NRG Private Equity Portfolio: Case study Ufanet: sales & EBITDA, $ m (internet provider) Genser: sales & EBITDA, $ m (car dealer) Source: company data Source: company data Source: company data Source: company data Begemot: sales & EBITDA, $ m (toy retail chain) Umnitsa: sales & EBITDA, $ m (baby food)
  • 8. Russian PE industry outlook
    • Economy is growing again
    • Return to classic “growth capital” model
    • Limited availability of debt creates opportunity for hybrid equity
    • Poor track record will create difficulties in fundraising for many GPs
    • Low deal competition
    • Attractive valuations and high IRRs