Russian Direct Investment Fund

The Russian Direct Investment Fund (RDIF) is Russia's sovereign wealth fund established in 2011 by the Russian government to make investments in leading 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.

Russian Direct Investment Fund
Founded2011 

RDIF therefore acts as a catalyst for direct investment in Russia.

RDIF’s reserved capital under management equals $10 billion. RDIF has invested and committed for this purpose 1.7 trillion rubles, of which RDIF alone invested 170 billion rubles and 1.6 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.[2]

In the first year of its operation, RDIF acquired shares of Moscow Exchange MICEX-RTS and Enel Russia.

In June 2012, RDIF and China Investment Corporation (CIC) established the Russian-Chinese Investment Fund.[3]

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.[4]

RDIF Management

RDIF Management structure includes Supervisory board with the government representatives,[5] and International Advisory Board.[6]

The International Advisory Board of RDIF is an advisory body that plays no part in the fund’s operational or strategic activities but it is a platform for informal communication and discussion of current issues. The International Advisory Board consists of heads of the world's leading investment and sovereign wealth funds. The Board meets once a year and its membership changes on a regular basis.

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,[7][8] 70% of which will be invested in Russia. Up to $2 billion is expected to be raised from international investors.

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[9] to pursue opportunities in Russia.[10] The fund will predominantly focus on long-term investment projects across a range of industry sectors. Additionally Mubadala manages $5 billion commitment from Abu Dhabi Department of Finance to invest in Russian infrastructure projects.

The Russia-Saudi Investment Fund

RDIF and Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), have created a partnership[11] to invest in attractive projects in Russia, in areas including infrastructure and agriculture.[12] PIF invested $10bn in the partnership, the Russia-Saudi Investment Fund was established.

The Russia-France Investment Platform

RDIF and Caisse des Dépôts International (CDC International) have launched the Russia-France Investment Platform,[13] which will seek attractive investments across a broad range of sectors and asset classes, including equity and debt securities, infrastructure and real estate in Russia and France with strong focus on opportunities promoting economic co-operation between the two countries.

RDIF and Qatar Holding co-investment fund

RDIF and Qatar Holding, the Qatar sovereign wealth fund, announced the launch of co-investment fund.[14] The fund will predominantly focus on longterm investment opportunities across a range of industry sectors, mainly in Russia.

The Russian-Italian investment platform

RDIF and Fondo Strategico Italiano (FSI) agreed to establish a €1 billion Russian-Italian investment platform.[15] The two financial institutions will invest in companies and projects promoting the development of foreign trade and increase of FDI between Italy and Russia.[16]

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[17] 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).[18] Later KIA doubled its investment[19] with RDIF to $1 billion. This vehicle allows international investors to automatically participate in every RDIF transaction on a pro-rata basis.

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.[20] The partnership promotes the exchange of information and expertise in the sectors and areas of common interest and identification of investment opportunities in Russia and Bahrain.

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.[21] 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.[22]

The Russia-China Venture Fund

RDIF and Chinese company Tus-Holdings agreed to establish a joint Russia-China Venture Fund (RCVF).[23] The fund will promote the development of trade and economic, investment, scientific and technological cooperation between Russia and China.

RDIF Investments

RDIF investments are focused on 6 areas:

Improving quality of life
  • Mother and child[24]
  • Geropharm[25]
  • Nationwide cancer diagnosis and treatment network[26]
  • Nationwide waste to energy eco-friendly programme[27]
  • Detsky Mir[28]
  • City hospital No. 40 in St.Petersburg[29]
  • Кaro Film[30]
  • World Class[31]
  • Development of radiodiagnostics in the regions
  • Retail chain “Fasol”
  • Alium[32]
  • R-PHARM

Infrastructure development

Import substitution and export potential

Regional development

Efficiency growth
  • NefteTransService
  • Cotton Way[67]
  • Construction of Smart Grids
  • Logistics platform PLT[68]
  • Globaltruck[69]
  • AutoPartners[70]

Technological development

The Center for Investment Promotion “Invest in Russia”

RDIF has launched the Centre for Investment Promotion in the Russian regions INVEST IN RUSSIA. Using the best international practices as well as RDIF’s extensive experience of working with international investors, the Center will contribute to the promotion of promising investment projects and the search for foreign investors.[75]

Other RDIF initiatives

RDIF supports the development program for young professionals and leaders in Russia, and acts as a mentor for Leaders of Russia, a competition for next generation of Russian leaders. It also maintains an employment and internship program for the competition’s finalists.[76]

RDIF develops relationships and maintains an intercultural dialogue with partner countries. It has implemented a number of landmark projects jointly with Russia’s leading cultural institutions including the Mariinsky Theatre, the State Hermitage Museum and the State Russian Museum.[77]

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


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