Philanthropist George Soros, one of Ukraine's strongest international backers, has put some of his money where his pro-Ukraine mouth is to invest in a dedicated investment fund in cooperation with a local brokerage. The fund's first investment is to acquire a stake in a leading local IT firm.
The billionaire's Soros Fund Management investment company for Soros family members has set up a Ukraine-dedicated private investment fund, Ukrainian Redevelopment Fund (URF) to become a seed investor in a direct investment fund, New Ukraine Fund. This will be managed by Kyiv-based brokerage Dragon Capital, Dragon announced on November 18. Dragon Capital is also set to become a seed investor in the fund, the statement said.
The move makes Soros the first major international investor to commit to Ukraine after the revolution of February 2014, and ensuing civil war and economic collapse that is only now starting to slow.
"URF is a private investment vehicle that focuses on special situations and private equity investments in Ukraine and companies with significant operations in Ukraine. URF endeavors to make targeted investments that have the potential to promote economic and social development in Ukraine," Dragon Capital said.
"The principal investment adviser to URF is Soros Fund Management (SFM), a private investment advisor to a number of private investment funds that are managed exclusively for Soros family clients," the statement added. The size of the fund was not disclosed.
The fund announced its first investment immediately, acquiring an undisclosed stake in leading local IT outsourcer Ciklum from Horizon Capital, an investment firm founded by Ukraine's current finance minister Natalie Jaresko. Ciklum was founded by its Danish CEO Torben Majgaard.
The New Ukraine Fund is now set to invest in a wide range of sectors of the Ukrainian economy, provide businesses with capital and managerial support to enhance performance and upgrade technologies to support long-term growth, according to the statement. The fund is slated to close by the end of 2015, with other investors potentially invited to participate.
"We are pleased to become a seed investor in a new private equity structure in Ukraine," said Michael Vachon, a spokesman for SFM. "We believe that international private capital combined with strong local management skills will contribute to and benefit from the recovery of Ukrainian economy. The New Ukraine Fund is well positioned to become one of the first success stories in post-crisis Ukrainian private equity arena."
"We are very pleased with the strong support we have received for the New Ukraine Fund from SFM and URF, a world-class private equity investor," Dragon Capital CEO Tomas Fiala said in the statement.