Russian Direct Investment Fund and China Investment Corporation announce the Russia-China Investment Fund
Beijing, 11 October 2011 – China Investment Corporation (CIC), China’s sovereign wealth fund, and the Russian Direct Investment Fund (RDIF), the fund recently established by the Russian government, today announced plans to set up the USD 3-4 billion Russia-China Investment Fund, a vehicle to make equity investments primarily in the Russia economy. The RDIF and CIC will each contribute USD 1 billion to the new fund and expect to raise USD 1-2 billion from third-party investors. Vnesheconombank (VEB), Russia’s state development bank, will act as a strategic partner to the fund.
Russian Prime Minister Vladimir Putin and Chinese Premier Wen Jiabao today oversaw the signing of a memorandum of intent to create the Russia-China Investment Fund as part of Mr. Putin’s official visit to China. RDIF Chief Executive Officer Kirill Dmitriev, CIC Chairman and CEO Lou Jiwei and Vnesheconombank Chairman Vladimir Dmitriev signed the memorandum on behalf of their respective organizations.
The Russia-China Investment Fund will invest the majority of its capital in projects in Russia. The fund will operate commercially. RDIF will take the main responsibility for building up the professional investment team and fund management. The Fund, combining the advantages and resources of RDIF, CIC and Vnesheconombank, aims to generate strong investment returns through joint efforts. It is believed collaboration in the sphere of investment will benefit from the fast economic development of Russia and China.
“Chinese Investment Corporation’s commitment is a resounding vote of confidence for Russia from one of the premier investors globally. The RDIF is delighted to have secured its first co-investor less than four months after our launch,” said Kirill Dmitriev, CEO of the Russian Direct Investment Fund.
The fund is expected to be formally established by 31 December 2011 following all necessary approvals and to commence operations in the first quarter of 2012.
Russian Direct Investment Fund (RDIF)
The Russian Direct Investment Fund was established in June 2011. The RDIF is expected to be capitalized with USD 10 billion in Russian government funds over the next five years and is charged with making equity investments that generate strong returns, primarily in Russia. In each investment it makes, the RDIF is required to secure co-investment that at minimum matches its commitment, thus acting as a catalyst for direct investment into the Russian economy. Additional information is available at www.rdif.ru.
China Investment Corporation (CIC)
Headquartered in Beijing, China Investment Corporation was founded on September 29, 2007, as a wholly state-owned company incorporated in accordance with China’s Company Law. The company was established as a vehicle to diversify China’s foreign exchange holdings and achieve higher risk-adjusted returns on its investments in the context of China’s macroeconomic requirements and further reform of its financial system. CIC invests on a commercial basis and its underlying investment objective is to seek long-term, sustainable, and high financial returns for its shareholder under an acceptable risk profile. Additional information is available at www.china-inv.cn.
State Corporation “Bank for Development and Foreign Economic Affairs (Vnesheconombank)” was established in 2007 through a transformation of Bank for Foreign Economic Affairs of the USSR. Vnesheconombank operates in conformity with Federal Law No. 82-FZ dated May 17, 2007 “On Bank for Development”. The Memorandum on Financial Policies approved by Resolution of the Government of the Russian Federation No. 1007-r dated July 27, 2007 sets forth major business lines and indicators of the Bank’s performance. Vnesheconombank is one of the key instruments for implementing the state economic policy aimed at removing infrastructure restrictions that impede economic growth, enhancing efficient utilization of natural resources, developing high-tech industries, unleashing innovative and industrial potential of small- and medium-sized enterprises (SMEs) and ensuring support for exports of industrial goods and services. Additional information is available at www.veb.ru.