Abu Dhabi Plans to Invest up to $5bn in Russian Infrastructure

Financial Times, 11.09.2013

Abu Dhabi is planning to invest as much as $5bn in Russian infrastructure projects over the next seven years in a move highlighting Russian efforts to attract sovereign wealth money.

The commitment from Abu Dhabi’s department of finance, which is expected to be formalised by the end of the year, is to be announced on Thursday by the Russian Direct Investment Fund, the $10bn state-backed fund set up in 2011 by Vladimir Putin, Russia’s president. The move comes three months after Mubadala, another Abu Dhabi fund, pledged to invest $1bn in Russian businesses alongside the RDIF.

The RDIF was set up two years ago to bolster private equity investments in Russia by offering foreign investors the opportunity to participate in companies or infrastructure projects. The fund appointed well-known buyout investors to its board, including Blackstone chief executive Stephen Schwarzman, Apollo Global Management’s co-founder Leon Black and Apax boss Martin Halusa.

Kirill Dmitriev, who runs the RDIF, has embarked on a mission to win commitments from big pockets of money in Asia and the Middle East. He struck a co-operation deal with China Investment Corp about a year ago and helped set up a $500m fund with the Kuwait Investment Authority.

In July, Mr Dmitriev, a former Goldman Sachs banker, pushed for the appointment of Ahmad Mohamed Al-Sayed, the recently named chief executive of the Qatar Investment Authority, to RDIF’s advisory board. The appointment of the 37-year-old lawyer heralded a possible collaboration with Qatar.

A portion of the $5bn commitment from Abu Dhabi’s department of finance will be invested on a deal-by-deal basis. Russian infrastructure projects included a new ring road around Moscow and a fast-speed train line, Mr Dmitriev said previously.