RDIF to play cornerstone role in Moscow Exchange IPO

By bne IntelliNews February 12, 2013

bne -

Charged with holding the hand of nervous investors to tempt them into the country, the Russian Direct Investment Fund (RDIF) is to step up as a cornerstone investor in the forthcoming Moscow Exchange IPO and has applied to invest up to $100m, according to unnamed sources in the media.

"The Russian Direct Investment Fund will participate in the initial public offering as a key investor, invest up to $100m, and bring several co-investors with whom it has previously worked," says a source cited by Vedomosti.

The float of Russia's major bourse is the next step in Moscow's bid to develop the country's capital markets and turn the capital into a global financial centre. The IPO bookrunners are collecting applications until February 14, with the listing expected to raise at least RUB15bn ($500m). Should the RDIF secure $100m worth of shares in the float, it would see the state investment fund take up to 20% of the issue.

Set up in 2011 to encourage international investment into Russia, the $10bn RDIF boosted its stake in the Moscow Exchange in the wake of its creation via the merger of Russia's two main bourses - the Micex and RTS - to 2.65% in July last year with a purchase of 1.4% from UniCredit. In an illustration of the RDIF's "hand holding" remit for investors nervous of the Russian markets, it was partnered in the deal by US private equity group Cartesian Capital. The state fund then sold part of its stake to BlackRock Inc., the world's biggest asset manager, in September.

The Central Bank of Russia currently holds 22% in the Moscow Exchange, with state-controlled banks Sberbank (9.6%) and Vnesheconombank (8%) other major shareholders. They have all said they will not be tendering any of their stakes in the upcoming IPO.

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