The Russian Direct Investment Fund (RDIF), the $10 billion investment fund established in 2011 by state-owned Russian bank Vnesheconombank (VEB) for co-investments with foreign investors in the Russian economy, has made an investment in a Moscow-based developer.
RDIF announced today it had teamed up with one of its Middle Eastern co-investors for an investment in Development Group (DG) 19, a company that acquires land and develops retail and logistics real estate. RDIF did not disclose the identity of the Middle Eastern co-investor. However, it has invested alongside Abu Dhabi sovereign wealth fund Mubadala, Bahrain's Mumtalakat, Qatar Holding and the Kuwait Investment Authority in the past.
The Russian fund also did not disclose the size of the investment. That said, it typically secures co-investments in Russian deals that, at a minimum, match its own commitment. Prior to this investment, RDIF had invested $1.3 billion, with more than $6 billion coming from its partners.
In the statement, RDIF said the joint venture will provide the necessary funds, strategic expertise and management resources for the development of logistics facilities. “The Russian logistics market continues to remain undersupplied in terms of high-quality logistics facilities compared to other major global cities, with Moscow at 0.8 square meters per capita – approximately half of leading global cities,” said Kirill Dmitriev, chief executive officer at RDIF. “The demand for logistics facilities is driven by the needs of evolving traditional retail businesses, fast growing e-commerce and the need for efficiency in the global supply chain. The trend of significant demand for premium logistics facilities over the medium and long term as seen in Russia and global markets makes this investment an attractive long-term opportunity.”
RDIF was established in 2011 by the president and prime minister of the Russian Federation. It is managed by a “highly qualified team of private equity investment professionals with broad international and Russian experience.” It has been positioned by the Russian government as a fully-owned subsidiary of VEB.