The Board of Directors of the Overseas Private Investment Corporation (OPIC), the U.S. Government’s development finance institution, approved up to $40 million in financing for a private equity investment fund that will support small and medium-sized enterprises (SMEs) in Russia’s outer provinces, where private equity has been largely unavailable.
Fast-growing SMEs with strong market positions will stimulate sustainable development predominantly in regions outside Moscow and St. Petersburg, where most economic power is concentrated. Those businesses will benefit from the support of the fund’s capital, state-of-the-art management techniques, and adherence to rigorous environmental, social and governance standards.
OPIC selected CapMan Russia II GP Limited as fund manager. Negotiations on more detailed terms and conditions of the financing will be conducted with the fund manager.
The CapMan Russia II Fund will invest in sectors such as consumer goods and services, health care, manufacturing and agriculture, IT and telecoms, as well as construction – industries expected to show strong growth in the future, supported by increasing consumer consumption and rising standards of living in Russia. The fund will provide hands-on support, transferring best-in class management practices and technology, helping targeted SMEs expand into new, complementary areas. The fund has a target capitalization of €175 million, or approximately $227 million.
“Small businesses in Russian regions outside of Moscow and St. Petersburg have terrific untapped potential, but have not had access to the capital they need to grow. This fund will help to fill that gap in high-growth sectors that stand to have the most significant development impact,” said OPIC President and CEO Elizabeth Littlefield.