Russian Fund to Invite Chinese Investors

Caixin, by staff reporters Shen Hu and Li Qing, 08.08.2011

Kirill Dmitriev, CEO of Russia’s first sovereign wealth fund, RDIF, said the fund is seeking to partner with Chinese investors while in Beijing on August 4

(Beijing) -- The Russian Direct Investment Fund (RDIF), Russia’s first sovereign wealth fund, is seeking to partner with Chinese investors, said Kirill Dmitriev, CEO of the fund in Beijing on August 4.

The newly-launched US$10 billion fund, which was set up in June, is a wholly-owned subsidiary of the Russian state development bank Vnesheconombank, known as VEB.

Dmitriev told Caixin the fund is set to invest US$500 million by the end of this year, and is hoping “co-investors” from China will participate in at least one project.

Dmitriev expects the partnership to further enhance mutual direct investment between the two countries. According to Dmitriev, bilateral trade between China and Russia has recovered to pre-crisis levels, and

China is now the fifth-largest investor in Russia. However, only 3 percent of Chinese investment in China is direct investment, while 97 percent is in loan projects.

In a mid-June interview with Caixin in Moscow, Dmitriev said that Chinese investors will receive at least one seat on the fund's advisory board, and they are also considering the idea of creating a Russian-Chinese sub-fund.

Dmitriev said that RDIF will focus on investment in Russia’s traditional industries as well as the country’s fastest growing sectors including infrastructure, medical care and energy.