RDIF and CIC launch Russia-China Investment Fund
In a signing ceremony in Beijing, Russian President Vladimir Putin and Chinese President Hu Jintao this week witnessed the launch of the Russia-China Investment Fund (RCIF).
The USD2-4 billion private equity fund, established jointly by the Russian Direct Investment Fund (RDIF) and China Investment Corp (CIC), aims to generate strong returns from equity investments in projects that take advantage of the increasingly robust economic relationship between Russia and China.
Kirill Dmitriev, CEO of RDIF, and Lou Jiwei, Chairman and CEO of CIC signed a Memorandum of Understanding on completing the establishment of the joint fund and outlining the key principles for managing and investing the fund. In remarks following the signing, Dmitriev and Lou emphasized that the fund's focus is on delivering competitive returns for its investors.
"We are pleased to have the RCIF fully up and running. Our primary focus now is on making investments that deliver strong risk-adjusted returns. We are fortunate in that Russia and China are both big, rapidly growing markets that offer a wealth of investment opportunities across a variety of sectors," says Dmitriev, adding that he expects the fund's first investments to focus on sectors like engineering, agriculture, forestry, transportation, and logistics to be announced still this year. "Creation of the this fund underscores the transition in Russia-China relations from a trade partnership to an investment-technology-trade partnership."
Jiwei says: "We are delighted to work with RDIF. Together, we will seek to tap investment opportunities through the new fund, in the quest for good returns and win-win solutions."
More than 70 per cent of the fund's capital will be invested in businesses and projects across Russia and other Commonwealth of Independent States, and up to 30 percent will focus on Chinese businesses and projects with Russian involvement.
RDIF was set up by the Russian government last year as a USD10 billion private equity fund that co-invests with leading global investors in primarily Russian companies. The fund has successfully attracted co-investment commitments from leading global private equity players and sovereign wealth funds.
USD1 billion will be committed to the fund by CIC and its related parties. Another USD1 billion shall be committed to the fund by RDIF. The fund will seek to raise USD1-2 billion of additional commitments from third-party investors.
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