The ex-deputy chairman of the board of MDM Bank, Alexey Panferov, will test his abilities in today’s ‘fashionable’ field of private equity investments. ‘Business’ newspaper recently learned that he has founded the management company New Russia Growth, which invests the capital of high wealth individuals in fast-growing businesses in CIS countries.
To begin with, the company shall raise $250 million (US).

Alexey Panferov is one of the most reputed financiers who has ever worked for the co-founders of the MDM Group, Andrey Melnitchenko and Sergey Popov. He has closed many important deals, including the IPO of aircraft building corporation Irkut. Recently, Mr.Panferov announced his resignation as head of the Investment department at MDM Bank to devote himself to other projects. ‘Business’ newspaper has been informed that the banker is going to head the company New Russia Growth (NRG), which he has founded with partners to manage private equity funds.

NRG company, registered in Cyprus, plans to make money inline with the popular “Russian story”. “The company will invest money in fast-growing companies in Russia and the CIS countries,” explained Mr.Panferov. He stated that the idea was originated by all the founders of NRG, whom he declines to name. “Our primary target now is to grow companies, hence the name,” he said. NRG will operate on the classic model of private equity managers – buying in blocking or controlling shares of a company, raising their value, and then making IPOs, selling to a “strategic” buyer or another fund. The average term of investments is three years.

Mr.Panferov is interested in investing in real estate, retail companies, the oil and gas sector, and machinery manufacturing. Currently, the NRG has approximately ten projects under consideration, three of which are in the final stages.

It is apparent that Panferov and his partner will not have a problem attracting investors.

The target volume of the first five-year fund under NRG management will be $250 million. These funds will be collected through the end of next year, so that by October the fund could hold more than $100 million. “These are the funds of large Russian private investors, with a maximum individual share of less than 10% of the total,” explained the director general of NRG.

In future, the NRG is planning to operate with larger funds. Mr.Panferov does not disclose who are going to entrust their funds to the company, though he has many wealthy acquaintances, including his ex-partners at the bank and his clients. Co-founders of NRG are also ready to invest considerable sums in the first fund. As Mr.Panferov noted, he himself contributes at least 2% to the total of the fund.

Head of the account management department of the investment division at Alpha Bank and former colleague of Panferov at MDM Bank, Andrey Dobrynin, thinks that Panferov possesses the required skills and connections for successful implementation of the project.

In the mean time, further growth of the market threatens financial companies with personnel shortage. Recently, James Cook, chairman of the board of Deltabank, resigned from his post to try out his abilities in the field of private equity investment; and Alex Williams, director of Vostok Nafta fund, has made the same move. "Now more and more people understand that they can make money on investments, and this is the next wave of enrichment," explained the executive director of Delta Private Equity Partners, Kirill Dmitriev. "The majority of investment bankers eventually start thinking about ‘going over to the other side’ and becoming investors," confirmed Mr. Dobrynin.

Source: Moscow business newspaper "Business" № 118 (502) 03.07.2006