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Wed 8 Feb 2017 07:30 PM

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Qatar to increase its $2bn investment in Russian state fund joint venture

QIA pledged an initial $2 billion to invest in Russia jointly with the state-backed RDIF

Qatar to increase its $2bn investment in Russian state fund joint venture
Kirill Dmitriev, CEO, Russian Direct Investment Fund (RDIF). (Host Photo Agency via Getty Images)

Qatar Investment Authority (QIA) is set to increase its investment in the $2 billion joint venture with the state-backed Russian Direct Investment Fund's (RDIF).

The QIA pledged an initial $2 billion to invest in Russia jointly with RDIF following its landmark deal to buy a stake in Russia’s state-owned oil giant Rosneft earlier this month.

RDIF chief executive Kirill Dmitriev told Reuters that QIA had agreed to increase the size of its automatic pro-rata contributions to each investment.

"That was a significant development for us," he said, without providing a percentage.

He said the joint-venture has already invested $500 million across transactions in the financial, retail and mining sectors and in infrastructure.

Dmitriev said the RDIF is expected to receive over $1 billion in new capital from the government by the end of 2017.

"We do expect more capital injections in 2017 and the government is considering giving us some stakes in companies," Dmitriev told Reuters in an interview cleared for publication on Tuesday.

"We expect over $1 billion before year-end."

President Vladimir Putin said in June that Russia planned to boost RDIF's capital.

Dmitriev said there had been discussions on transferring some government stakes in companies to RDIF to manage given its successful track record, but nothing had been finalised. He spoke to Reuters ahead of an initial public offering by Detsky Mir, a Russian children's goods retailer, which is expected to price on Wednesday.

Dmitriev said it was an "important milestone" that he expected to open the door for many other Russian companies to list.

The RDIF and Saudi's sovereign funds were seeking further co-investment opportunities in Russian infrastructure and agriculture, while the Russia-Japan Investment Fund, a joint venture with the Japan Bank for International Co-operation, was expected to make some key investments this year.

The RDIF was set up in 2011 to buy stakes in companies alongside foreign financial and strategic investors. It can invest up to 20 percent of its capital outside Russia.

It has reserved capital of $10 billion under management and another $30 billion in commitments from foreign partners. It has co-investment ventures with several other sovereign funds, including those of China, Qatar and France.

* With Reuters

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