Alfa-Eco and Vostok Nafta Investment Found Russian Resources Fund

The Alfa-Eco Group in cooperation with the Vostok Nafta Investment Ltd. company has founded a Russian Resources Fund. Mikhail Fridman, chairman of the Board of Director of Alfa-Group, which includes Alfa-Eco, announced this information at a news conference. According to him, the estimated amount of the fund will be $200m-300m. The parties have invested $20m in the founding of the fund. Alexander Babikov, Alfa-Eco vice-president for strategic planning, declared that the fund would be formed in two stages. At the first stage, at the beginning of 2003 the amount of the fund will be increased to $50m, and after respective market surveys, the amount of the fund will be raised to $200m-300m.

According to Fridman, the fund will be orientated to the attraction of direct foreign investments to Russian companies whose shares are not offered on the stock market now. It is planned that the fund will buy and restructure such companies to make them attractive to investors. Then they will be sold to Western investors. According to Fridman, the limit on funds allocated for each project will be between $5m and $30m.

Babikov added that in the event that a company is particularly attractive to investors, the amount of investments in it could be increased. He reported that the minimum amount of Western investments in the fund would be $1m. It is planned that the fund will serve both individual and institutional investors. Fridman told reporters that the fund's work will be intended to make investments in companies of the natural resources sector, power generating companies, the timber and agricultural industries, as well as a number of other industries.