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TPG backs new strategy for Russian bank VTB

22 Aug 2011

US private equity firm TPG has joined a strategy committee at Russian bank VTB, in an effort to protect its $100m investment made as part of VTB’s $3.3bn secondary offering earlier this year.

According to the Financial Times, the move follows demands from the bank’s investors not to pursue further acquisitions, following the ill-advised purchase of Bank of Moscow.

TPG co-founder David Bonderman will represent the firm on the strategy committee, and will be tasked with helping the bank to steer clear of acquisitions in favour of adopting alternative growth strategies.

VTB paid around $3.7bn for a 46.48 per cent stake for its rival in February, with the ultimate goal of obtaining a 100 per cent stake in the near future.

However, a central bank audit discovered more than a third of the bank’s loan book had been lent to companies related to the bank’s previous management, forcing VTB to turn to the central bank for a $14bn bail-out.

Earlier this month, TPG and VTB upped their investment in Russian hypermarket chain Lenta, in a deal valued at $1.1bn.

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