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Nrg abolmasov ma_october
 

Nrg abolmasov ma_october

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    Nrg abolmasov ma_october Nrg abolmasov ma_october Presentation Transcript

    • Alexander Abolmasov
      Managing Partner
      NRG
      www.nrgc.com
      Understanding
      Russian
      Private equity
    • What LPsthink about Russia?
    • If I bring Russian deal to Investment committee they could fire me.
      If I don’t bring Chinese deal to Investment committee they could fire me.
      Partner
      Leading LP company
    • The problem is not in expected returns…
      Investors expecting annual net returns of 16%+ from different emPe regions over the next 3-5 years
      … though there is a perception gap
    • Russian PE consistently outperforms
      Source: Cambridge Associates, EVCA/Thomson Reuters, Bloomberg and EBRD
      * EBRD tracked portfolio pooled end-to-end return, net of fees, expenses, donor grants and carried interest. Excludes property funds, and includes liquidated partnerships.
      ** Pooled end-to-end return, net of fees, expenses, and carried interest. “The "Since Inception" figure represents the net pooled IRR since inception for funds formed between 1980 and 2009.
    • The Perception Gap about Russia
      Do you know what is BRIC?
      Have you heard of “Let’s transform BRIC into BIC”?
      Have you heard that Goldman Sachs updated their report in 2010 and Russia is now #2 based on attractiveness?
      Statistic from the poll organized by Alexander Abolmasov on BVCA Summit, London (March 2011)
      95%
      45%
      0%
    • Russia is #10 out of 10 EM
      Theattractiveness of emerging markets/regions for GP investment over the next 12 months – LP views
    • Why investor don’t want invest in Russia?
      Factors likely to deter LPs from beginning to invest in individual emerging markets/regions over the next 2 years – % of respondents
      Guardian, 2 December 2010
    • Private EquityLandscape
    • UCP
      Russian PE industry snapshot
      Quadriga
      Capital
      BVCP
      Captive and semi-captive
      Elbrus
      Capital
      Russia Partners
      NRG
      UFG
      Mint
      Capital
      Aurora
      Russia
      Da Vinci
      Alfa CP
      Icon CP
      VTB
      East
      Capital
      Wermuth
      Uralsib
      Prometheus
      Aton
      Capman
      50-100 private funds/
      family offices
      EBRD Funds
      Rusnano
      Svarog
      Capital
      Independent
      New players
    • Trends
      Crashes
      Troika, Marshall
      Mergers
      Norum/Capman, Delta/UFG
      Spin-offs
      Elbrus, Quadro
      Deathpool
      Eagle CP, Trifecta
      New funds seeded with HNW money
      Aton, Prometheus, UCP
      Mezzanine
      NRG
    • Case Study: Genser
      Biggest Infinity and Nissan Dealer in Europe
      12% of Nissan market in Russia
      12 brands/24dealerships in Moscow and in Central Russia
      Initial investments: 2007
      Hybrid equity: April 2009
      Secured loan with equity kickers
      Exit to IPO
      2012
      Multiple: 1.5x
      Current return 20%
      IRR: 30%
      Multiple: 5x
      IRR: 45%
      12
    • Case Study: Begemot
      #2 toy retailer in Russia
      Mid/low prices
      Growth in 2 years: 50 -> 200 retail outlets.
      90% EBITDA growth
      70% sales growth
      Mezzanine transaction summary
      • Secured loan with equity kickers
      • Use of funds: refinancing/working capital
      • Board seat and veto rights
      • Current return: 18%
      • IRR: 41%
      13
    • NRG Portfolio
      Ufanet: sales & EBITDA, $m (internet provider)
      Genser: sales & EBITDA, $m (car dealer)
      Source: company data
      Source: company data
      Begemot: sales & EBITDA, $m (toy retail chain)
      Umnitsa: sales & EBITDA, $m (baby food)
      14
      Source: company data
      Source: company data
    • NRG. Profile.
      Independent alternative investment manager
      Volga River One C.P.
      First Closing: 29 Sept 2006
      Current size (cash): US$178 m
      Number of LPs: 20 (15 private + 5 institutional)
      Portfolio companies: 6 (telecoms, retail, food production)
      Tenor (years): 5+2 with 51% approval of LPs
      Volga River Growth
      First Closing: $135m, 4Q 2010
      Target size: US$250 m
      LPs: EBRD, local Institutional LPs
      Tenor (years): 5+2 with 75% approval of LPs
      • Majority of LPs don’t invest in Russia at the moment
      • Previous crisis was a big hit for Russian PE industry
      • Next crisis may kill more PE funds, because fundraising in 2012 could be as bad as in 2009
      Summary
      Alexander Abolmasov
      Email: aabolmasov@nrgc.com
      WWW: www.nrgc.com