Russian Direct Investment Fund Explained

Russian Direct Investment Fund
Native Name:Российский фонд прямых инвестиций
Industry:Sovereign wealth fund

The Russian Direct Investment Fund (RDIF) is Russia's sovereign wealth fund established in 2011 by the Russian government to make investments in companies of high-growth sectors of the Russian economy. Its mandate is to co-invest alongside the world's largest institutional investors, direct investment funds, sovereign wealth funds and leading companies.

RDIF's reserved capital under management equals $10 billion. RDIF has invested and committed for this purpose 2.1 trillion rubles, of which RDIF invested 200 billion rubles and 1.9 trillion rubles came from co-investors, partners and banks. RDIF also attracted over $40 billion of foreign capital into the Russian economy through long-term strategic partnerships.[1] Kirill Dmitriev is the RDIF's chief executive officer.

History

RDIF was founded in June 2011 under the leadership of both Russian President Dmitry Medvedev and Prime Minister Vladimir Putin.[1]

In June 2012, RDIF and China Investment Corporation (CIC) established the Russian-Chinese Investment Fund.[2] On 2 June 2016, President of the Russian Federation Vladimir Putin signed Federal Law on the Russian Direct Investment Fund changing the status of RDIF. According to the law, RDIF became the sovereign wealth fund of the Russian Federation.[3]

Value

In June 2023 Russia claimed the fund exceeded 2.1 trillion rubles invested in the Russian economy.[4]

Sanctions

On 28 February 2022, as a result of the 2022 Russian invasion of Ukraine, the United States placed RDIF and its chief executive on its list of sanctioned Russian entities and people.[5] [6] The European Union, Ukraine, United Kingdom and Australia followed later in February and in March.[7] In the recital of the sanction decision, Office of Foreign Assets Control labeled RDIF as a slush fund for Vladimir Putin and as emblematic of Russia's broader kleptocracy.

Restrictions also apply to parties entering investments with the Fund. The EU prohibit investment, participation, or contribution to projects co-financed by RDIF.[8]

RDIF Management

RDIF Management structure includes Supervisory board with the government representatives,[9] and International Advisory Board.[10]

Strategic Partnerships and Investment Platforms

The Russia-China Investment Fund

Together with China Investment Corporation (CIC) RDIF created a $2 billion Russia-China Investment Fund.[11] [12]

RDIF and Mubadala co-investment fund

RDIF and Mubadala Development company (Mubadala), the Abu Dhabi-based investment and development company, agreed to launch a $2 billion co-investment fund[13] to pursue opportunities in Russia.[14]

The Russia-Saudi Investment Fund

RDIF and Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), have created a partnership[15] to invest in attractive projects in Russia, in areas including infrastructure and agriculture.[16]

The Russia-France Investment Platform

RDIF and Caisse des Dépôts International (CDC International) have launched the Russia-France Investment Platform,[17] which will seek attractive investments across a broad range of sectors and asset classes.

RDIF and Qatar Holding co-investment fund

RDIF and Qatar Holding, the Qatar sovereign wealth fund, announced the launch of co-investment fund.[18]

The Russian-Italian investment platform

RDIF and Fondo Strategico Italiano (FSI) agreed to establish a €1 billion Russian-Italian investment platform.[19] The two financial institutions will invest in companies and projects promoting the development of foreign trade and increase of FDI between Italy and Russia.[20]

The Russia-Japan Investment Fund

RDIF and Japan Bank for International Cooperation (JBIC) established a Russia-Japan Investment Fund (RJIF). RJIF will seek and realise attractive investment projects to promote economic, trade and investment cooperation between Japan and Russia. Under the MoU, RDIF and JBIC have agreed that each of them will invest $500 million[21] for the joint investments through RJIF and a joint investment framework.

Collaboration with Kuwait Investment Authority

RDIF launched an automatic co-investment mechanism, with the first $500 million from Kuwait Investment Authority (KIA).[22] Later KIA doubled its investment[23] with RDIF to $1 billion.

Memorandum of Understanding between RDIF and Mumtalakat

RDIF and Mumtalakat, the investment arm of the Kingdom of Bahrain, signed an MoU to promote investment cooperation between Russia and Bahrain.[24]

Collaboration with Rönesans Holding

RDIF and Rönesans Holding, the leading construction, real estate development and investment company, have reached an agreement to expand the scope of their joint investment activities.[25] The parties are focused on attractive investment opportunities within the Russian Federation; and have identified healthcare, construction, infrastructure and commercial real estate as priority sectors.[26]

The Russia-China Venture Fund

RDIF and Chinese company Tus-Holdings agreed to establish a joint Russia-China Venture Fund (RCVF).[27]

RDIF Investments

RDIF investments are focused on 6 areas:

Improving quality of life

Infrastructure development

Import substitution and export potential

Regional development

Efficiency growth

Technological development

See also

External links

Notes and References

  1. Web site: Russian Direct Investment Fund.
  2. Web site: Russia-China Investment Fund (RCIF).
  3. Web site: Law on Russian Direct Investment Fund. 2 June 2016 .
  4. Web site: Russian Direct Investment Fund . 11 June 2023.
  5. Webster . Paul . 2022-03-15 . Russian COVID-19 vaccine in jeopardy after Ukraine invasion . Nature Medicine . en . d41591–022–00042-y . 10.1038/d41591-022-00042-y . 35293390 . 247475281 . 1078-8956.
  6. Web site: Treasury Prohibits Transactions with Central Bank of Russia and Imposes Sanctions on Key Sources of Russia's Wealth . 2022-04-25 . U.S. Department of the Treasury . en.
  7. Web site: RUSSIAN DIRECT INVESTMENT FUND . 2022-04-25 . . June 2011 . en.
  8. Web site: EU de-SWIFTs seven Russian banks; prohibits investments with RDIF; restricts Euro banknotes to Russia and imposes media ban . 4 March 2022.
  9. Web site: Supervisory board.
  10. Web site: International Advisory Board.
  11. Web site: Russian Direct Investment Fund and China Investment Corporation announce the Russia-China Investment Fund.
  12. Web site: China to Invest in Russian Fund. 2011-10-12. The Wall Street Journal.
  13. Web site: Russian Direct Investment Fund and Mubadala establish co-investment fund.
  14. Web site: Russia's RDIF sets up $2bln investment fund with Abu Dhabi. 2013-06-20. Reuters.
  15. Web site: RDIF attracts major investment from the Middle East into the Russian economy: Saudi Arabia's sovereign wealth fund to commit USD 10 bn.
  16. Web site: Saudi Arabia to invest $10B in Russia. 2015-07-07. yahoo! finance.
  17. Web site: RDIF and Caisse des Dépôts International launch Russia-France Investment Fund.
  18. Web site: Qatar fund commits $2 billion investment to Russia: RDIF CEO. 2014-05-23. Reuters.
  19. Web site: RDIF and FSI launch €1 billion Russian-Italian investment platform.
  20. Web site: Russian, Italian state funds agree investment deal. 2013-11-26. Reuters.
  21. Web site: VEB, RDIF, and Japan Bank for International Cooperation create joint Russian-Japanese Investment Platform.
  22. Web site: Russian fund signs $500 mln co-investment with Kuwait. 2012-06-21. Reuters.
  23. Web site: Kuwait's Sovereign Wealth Fund doubles its investment with RDIF to $1 billion.
  24. Web site: RDIF and Mumtalakat to strengthen economic and investment cooperation between Bahrain and Russia, Mumtalakat CEO to join International Advisory Board of RDIF.
  25. Web site: RDIF and Renaissance Holding to jointly develop projects across Russia's regions.
  26. Web site: Russian fund, Turkey's Ronesans agree $400 mln joint investments. 2016-08-09. Reuters.
  27. Web site: RCIF and Tus-Holdings to create Russia-China Venture Fund.
  28. Web site: RDIF Prods Regions For Investment Opportunities. 2013-12-02. The Moscow Times.
  29. Web site: Russian Direct Investment Fund invests in Geropharm. 2016-06-17. Private Equity Wire.
  30. Web site: UAE's investments during Russia's difficult time deepened strategic ties: Russian official. 2019-10-12. Emirates News Agency.
  31. Web site: RDIF expands cooperation with Rönesans Holding.
  32. Web site: Russia-China investment fund buys stake in retailer Detsky Mir. 2014-09-09. Reuters.
  33. Web site: RDIF makes raft of investments. 2016-06-20. PEI MEdia.
  34. Web site: Consortium of media entrepreneur Paul Heth and private equity funds lead investment into Russia's Karo Film Group. 2012-12-13. PR Newswire Association.
  35. Web site: Russian Fitness Group Receives Investment from RDIF & Mubadala. 2019-11-28. FINSMES.
  36. Web site: Russian sovereign wealth fund, others invest in Alium pharmaceutical firm. 2019-07-09. Zawya.
  37. Web site: RDIF-led consortium to invest $1.6 billion in Moscow real estate project. 2017-05-13. Reuters.
  38. Web site: RDIF head: Relations with Saudi Arabia and UAE are at an unprecedented level. 2019-10-28. TASS.
  39. Web site: Russia and China deepen ties with River Amur bridge. 2019-11-29. Reuters.
  40. Web site: UPDATE 2-China fund buys into Moscow stock exchange sale. 2013-02-14. Reuters.
  41. Web site: RDIF-led consortium completes acquisition of 25% of Pulkovo Airport. 2017-09-06. InfraPPP.
  42. Web site: Russia-Japan Investment Fund makes first investments of $170 mln. 2017-12-06. Reuters.
  43. Web site: RDIF and Avtodor plan to coinvest in transport projects in Russia. 2014-12-10. InfraPPP.
  44. Web site: Russian Direct Investment Fund and Consortium of Co-investors Sign Agreement to Acquire 26.43% Stake in Enel OGK-5. 2012-03-16. PR Newswire Association.
  45. Web site: State Allots $10Bln to Lure Investors. 2011-07-07. The Moscow Times.
  46. Web site: Russian sovereign wealth fund invests in InterRAO share offering - two sources. 2018-03-15. Reuters.
  47. Web site: UPDATE 1-Russia-China fund, Middle East investors eye stake in Sovcombank. 2018-06-08. Reuters.
  48. Web site: Schneider Electric and RDIF Form JV to Invest in Electroshield Samara. 2019-10-21. Sovereign Wealth Fund Institute.
  49. Web site: RDIF and Italian Company ANAS Agree to Jointly Implement Infrastructure Projects in Russia. 2018-10-25. Advisor News.
  50. Web site: Mubadala, RCIF and UFC Agree to Form UFC Russia Joint Venture. 2018-07-18. Sovereign Wealth Fund Institute.
  51. Web site: Mideast funds, Russian govt inject capital in SIBUR's major cracker. 2015-12-05. ICIS.
  52. Web site: RDIF, Titan International and One Equity Partners acquire OJSC Voltyre-Prom. 2013-10-07. Private Equity Wire.
  53. Web site: International consortium buys 12% stake in Russian Helicopters. 2017-02-22. Russian Aviation Insider.
  54. Web site: Sibur sells LPG terminal in Ust-Luga, expects capacity increase by 30 pct. https://web.archive.org/web/20170421014356/http://af.reuters.com/article/commoditiesNews/idAFL8N13039E20151105. dead. 2017-04-21. 2015-11-05. Reuters.
  55. Web site: Maaden, RDIF, PhosAgro to launch investments in Russia and Saudi Arabia. 2019-10-15. Mubasher.
  56. Web site: Russia Agrees to Significant Silk Road Projects with China. 2017-07-19. Russia Briefing.
  57. Web site: French government gives support to RDIF and CDC IC investment in Arc. 2016-06-28. Private Equity Wire.
  58. Web site: Russian Direct Investment Fund plans to invest in En+ IPO - BBG. 2017-10-24. Reuters.
  59. Web site: Thailand's CP Foods, RDIF to invest $1 bln in dairy complex. 2016-05-19. Russia Beyond.
  60. Web site: Vietnamese, Thai firms to pour $4 bln into Russian dairy production. 2016-05-18. Reuters.
  61. Web site: Intergeo Attracts Chinese, Arab Investors for 10% Stake Deal. 2019-03-14. Russia Business Today.
  62. Web site: Inalca, il fondo sovrano russo RDFI investe nelle attività agricole in Russia. 2019-06-13. Ruminantia.
  63. Web site: EDB and the IIB open a RUB 8.15 billion loan facility for Nord Hydro – Belyi Porog to construct small hydropower plants in Karelia. 2017-04-03. Eurasian Development Bank.
  64. Web site: Russia's RDIF and Rostelecom team up with international partners to "eliminate digital inequality among Russian regions". 2014-06-09. East-West Digital News.
  65. Web site: RDIF and Singapore's CAI consortium acquires Vladivostok Airport in Russia. 2016-11-27. Airport Technology.
  66. Web site: Barings Joins Russian Sovereign Wealth Fund In Far East Coal Private Equity Deal. 2013-12-12. Forbes.
  67. Web site: RDIF, partners ready to make new investment in Magnit, but want bigger offers by shareholders. 2016-02-15. Interfax.
  68. Web site: Russia Sells Stake in Diamond Company Alrosa to Cut Budget Deficit. 2016-07-11. The Wall Street Journal.
  69. Web site: RDIF and partners act as lead anchor investors in Lenta SPO. 2015-03-25. Private Equity Wire.
  70. Web site: Japan's Mitsui, RDIF invest in Russia-based Cotton Way. 2014-02-10. AVCJ.
  71. Web site: RDIF and Gulf Capital Expands Russian PLT Portfolio. 2018-12-26. Sovereign Wealth Fund Institute.
  72. Web site: BCS Completes IPO of Globaltruck Management PJSC. 2017-11-03. Mondo Visione.
  73. Web site: RDIF Invests in Auto Partners. 2019-09-04. Sovereign Wealth Fund Institute.
  74. Web site: Alibaba, Mail.Ru, Megafon form AliExpress Russia JV to double down on e-commerce in CIS. 2019-06-05. Techcrunch.
  75. Web site: Russian and Abu Dhabi sovereign funds inject $7.5 million into Russian online freight service. 2018-10-03. East-West Digital News.
  76. Web site: Hyperloop One gets an investment from Russia's sovereign fund. 2016-06-27. Venture Beat.
  77. Web site: Russia Raises $2Bln for Investment in Artificial Intelligence. 2019-05-31. The Moscow Times.

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