Russia’s RDIF backs Moscow developer

PERE, 23.10.2014

The $10 billion RDIF, which was established to make equity investments primarily in the Russian economy, has teamed up with one of its co-investment partners for an investment in Development Group 19, a Moscow-based logistics developer.

The Russian Direct Investment Fund (RDIF), the $10 billion investment fund established in 2011 by state-owned Russian bank Vnesheconombank (VEB) established for co-investments with foreign investors in the Russian economy, has made an investment in a Moscow-based developer.

RDIF announced today it had teamed up with one of its Middle Eastern co-investors for an investment in Development Group (DG) 19, a company that acquires land and develops retail and logistics real estate. The fund will invest in a logistics development by the firm.

RDIF did not disclose the identity of the Middle Eastern co-investor however it has historically invested alongside Abu Dhabi sovereign wealth fund Mubadala, Bahrain’ fund Mumtalakat, Qatar’s fund Qatar Holding and the Kuwait Investment Authority in the past.

The Russian fund also did not disclose the size of their investment. It typically secures co-investment in Russian investments that, as a minimum, matches its own commitment. Prior to this investment, RDIF had invested $1.3 billion with more than $6 billion coming from its partners.

In the statement, the RDIF said the joint venture will provide the necessary funds, strategic expertise and management resources for the development of logistics facilities.

Kirill Dmitriev, chief executive officer at RDIF, said: “The Russian logistics market continues to remain undersupplied in terms of high quality logistics facilities compared to other major global cities, with Moscow at 0.8 square meters per capita or approximately half of leading global cities.”

“The demand for logistics facilities is driven by the needs of evolving traditional retail businesses, fast growing ecommerce and the need for efficiency in global supply chain. The trend of significant demand for premium logistics facilities over medium and long term as seen in Russia and global markets makes this investment an attractive long-term opportunity.”

RDIF was established in 2011 by the president and prime minister of the Russian Federation. It is managed by a “highly qualified team of private equity investment professionals with broad international and Russian experience.” It has been positioned by the Russian government as a 100 percent owned subsidiary of VEB.