Direct and Venture Investment in Russia
On the whole, over the course of 2010, the capitalization of venture funds and direct investment funds rose in Russia almost by 10.5%, to $ 16.8bn. The volume of attracted capital rose almost by one-third on 2009, to $ 1.7bn vs. $ 1.3bn one year earlier. However, the achieved volume of attracted capital still significantly lagged behind that registered in the pre-crisis years 2007 and 2008, when the funds were annually attracting approximately $ 4.2-4.3bn.
Over the course of 2010, Russia registered 15 new venture funds, thus increasing their total number to 170. Also in 2010, 7 funds were liquidated, which is somewhat fever than in 2009 (12 funds).
Also, the report contains data on the segmentation of asset-management companies with regard to the capitalization of funds. Thus, big asset managers are recognized as those in control of funds to the total value of $ 151m to 2,200m. In 2010, there were 22 such companies (by 2 more than in 2009), with the total capitalization of managed funds amounting to $ 12.4bn, or approximately 73.8% the total capitalization of venture funds and direct investment funds. The number of asset-management companies belonging to the second group, with ‘medium' capitalization levels of $ 51-150m, also increased, to 33, with the total capitalization of their funds amounting to $ 3.3bn. The number of low-capitalization asset-management companies (between $ 5m and 50m) increased by 2, and in 2010 amounted to 55. The total capitalization of funds managed by that group of companies amounted to $ 1.1bn.
The number of companies having received adequate financial resources nearly doubled in 2010 and amounted to 128 (against 69 in 2009). In this connection, the most popular sectors (in terms of investment volume) are telecommunications (37.6% of the total investment volume), financial services (33.5%) and the consumer market (11.6%). The other sectors of the economy take about 17.3% of total investments. Among these, there are computers (4.7%), power engineering (4.0%), industrial equipment (3.8%), medicine and health care (2.1%), and agriculture (2.1%). The average size of investments in 2010 rose by nearly 2.7 times on the previous year and amounted to $ 19.7m.
Traditionally, the bulk of investments (in money terms) go to companies that undergo expansion, restructuring or other processes characteristic of late-phase development. Thus, in 2010 such companies received investments in the total amount of $ 2.4bn, and the number of investment projects was 47. Companies undergoing the seed, startup, or early growth stages of development received total investment in the amount of $ 153.3m, the number of investment projects of that type being 81.
The leaders in the volume of venture and direct investments in 2010 were the Central Federal District (86.2%); the Far-Eastern Federal District (8.0%); the Urals Federal District (2.3%); and the North-Western Federal District (2.0%).
Withdrawal of funds from portfolio companies is one of the most important indicators of successful investments. In 2010, there were 25 instances of fund withdrawal from portfolio companies, including under the following scenarios:
• sale of a stake to a strategic investor - 13;
• sale to a financial investor - 4;
• total or partial sale of assets - 3;
• writing-off - 2;
• IPO - 2;
• buyout by management - 1.
Thus, data for the year 2010 point to a certain revival on the market for venture and direct investments; however, the level of activity on that market is still far below that of the pre-crisis years.
V. A. Kotsubinsky, Researcher, Innovation Economy Department