Alexander Abolmasov <br />Managing Partner<br />NRG <br />www.nrgc.com<br />Understanding<br />Russian <br />Private equit...
What LPsthink about Russia?<br />
If I bring Russian deal to Investment committee they could fire me. <br />If I don’t bring Chinese deal to Investment comm...
The problem is not in expected returns… <br />Investors expecting annual net returns of 16%+ from different emPe regions o...
Russian PE consistently outperforms <br />Source: Cambridge Associates, EVCA/Thomson Reuters, Bloomberg and EBRD<br />* EB...
The Perception Gap about Russia<br />Do you know what is BRIC? <br />Have you heard of “Let’s transform BRIC into BIC”?<br...
Russia is #10 out of 10 EM<br />Theattractiveness of emerging markets/regions for GP investment over the next 12 months – ...
Why investor don’t want invest in Russia? <br />Factors likely to deter LPs from beginning to invest in individual emergin...
Private EquityLandscape<br />
UCP<br />Russian PE industry snapshot<br />Quadriga<br />Capital<br />BVCP<br />Captive and semi-captive<br />Elbrus <br /...
Trends<br />Crashes<br />Troika, Marshall  <br />Mergers<br />Norum/Capman, Delta/UFG  <br />Spin-offs <br />Elbrus, Quadr...
Case Study: Genser <br />Biggest Infinity and Nissan Dealer in Europe<br />12% of Nissan market in Russia<br />12 brands/2...
Case Study: Begemot  <br />#2 toy retailer in Russia<br />Mid/low prices<br />Growth in 2 years: 	50 -> 200 retail outlets...
 Use of funds: refinancing/working capital
 Board seat and veto rights
 Current return: 18%
Upcoming SlideShare
Loading in …5
×

Nrg abolmasov ma_october

647
-1

Published on

Published in: Business, Economy & Finance
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
647
On Slideshare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
0
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Nrg abolmasov ma_october

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

×