VTB Capital, the investment arm of Russia’s second biggest lender, has partnered with London-based venture capital firm I2BF to launch Russia Kazakhstan Nanotechnology Fund, a $100m sovereign-backed vehicle raised to capitalise on the country’s burgeoning nanotech sector.
The fund will cornerstone backing from the Russian state nanotechnology fund RusNano and Kazyna Capital Management, the sovereign wealth fund of the Republic of Kazakhstan.
These entities have committed $25m each to the new fund, with VTB Capital and I2BF expecting to raise a further $50m from external investors. The fund will operate through offices in Moscow and Almaty, which will open soon.
The decision to establish the fund was taken during VTB Capital’s Investment Forum ‘Russia Calling’ in October last year, where RusNano, Kazyna Capital Management, VTB Capital and I2BF Global Ventures signed a memorandum agreeing to establish a nanotechnology fund focused on Russia and Kazakhstan.
The ten-year fund will focus on technology transfer into the two countries as well as domestic nanotech investment, while also driving further private capital inflows into the nanotech sector by leading deals for international syndication.
Potential pipeline deals include desalination technologies, oil processing, diabetes treatments, semiconductor technologies and LED/OLED, while future investment themes will include energy production, including alternative energy; increasing efficiency in the petroleum and gas industry; telecommunications; biotechnology; electronics and environmental technology.
Activities for the fund will be divided equally between Russia and Kazakhstan.
Aidar Kaliev, head of venture at VTB Capital, said, “We think that the fund is a precedent. This is the first time in the history of the CIS that a venture fund will invest in frontier technology in both Russia and Kazakhstan. The initiative is very important taking into account the active collaboration between the two governments to launch the Common Economic Space. VTB Capital is excited to offer its experience and global platform to ensure the success of this fund”.
Ilya Golubovich, a managing partner at I2BF Global Ventures, added, “Nanotech is going to be a major theme of the coming century in a range of different sectors. I’m pleased that our brilliant research team and global partner network will be helping drive the deal cycle for the Russia-Kazakhstan Nanotechnology Fund and assisting in technology transfer to the region.”
Origination, execution and monitoring of deals, in addition to other investment management functions, will be undertaken jointly by VTB Capital and I2BF Global Ventures. I2BF was initially awarded a mandate to manage the fund last year.
Copyright © 2011 AltAssets