Russia's Direct Fund Interested in Cuba Deals as Economy Expands

Russia's Direct Fund Interested in Cuba Deals as Economy Expands
Zainab Fattah
December 6, 2015 — 7:31 AM CET Updated on December 6, 2015 — 1:16 PM CET

Russian Direct Investment Fund, which partners with global investors on
equity deals at home, said it's interested in investing in countries
where it sees strong potential for growth such as Egypt and Cuba.
"Russia has deep experience with Cuba," Kirill Dmitriev, the fund's
chief executive officer, said in an interview in Abu Dhabi. "So
investment in ports and airports is quite interesting given the
potential growth of the Cuban economy." Egypt, the Arab world's most
populous country, is becoming more stable and RDIF sees potential for
investments in the country's aging infrastructure and new industrial
parks, he said.
Such deals would mark a shift in strategy for the fund which was was set
up in 2011 to secure co-investment in Russian transactions to stimulate
inflows into the country. The fund has started to invest $10 billion
pledged by Saudi Arabia this year, while Kuwait's sovereign wealth fund
last month said it would double the amount it's pledged to the fund to
$1 billion. The fund has about 25 investments and recently sold stakes
in companies including telecommunications provider Rostelecom PJSC,
according to Dmitriev.
Russia is beset by its first recession since 2009 as international
financing restrictions and those linked to the Ukraine conflict drive
firms, including Franklin Templeton Investments and BNP Paribas SA, to
pull out of the country. A plunge in the price of oil, its biggest
export, is also pushing the economy to contract. Gross domestic product
is forecast to shrink 3.8 percent in 2015 and won't resume growth until
the third quarter next year, according to the median estimate of
economists surveyed by Bloomberg.
The ruble has dropped about 14 percent against the dollar this year,
according to data compiled by Bloomberg.
Cuba -- which allied with the Soviet Union under Fidel Castro-- resumed
diplomatic relations with the U.S. in July this year. The rapprochement
has prompted companies from JetBlue Airways Corp. to Airbnb Inc. to seek
to capitalize on the improving relationship. Egypt is also seeking to
attract foreign investment as it stabilizes after uprisings in 2013 that
saw the ouster of Islamist President Mohamed Mursi.
Russia, set to become the world's largest wheat exporter, has beat
competitors including France and the U.S., supplying about two-thirds of
Egypt's wheat purchases so far this season, according to the Russian
Grain Union.

Source: Russia's Direct Fund Interested in Cuba Deals as Economy Expands
- Bloomberg Business -
http://www.bloomberg.com/news/articles/2015-12-06/russia-s-direct-fund-interested-in-cuba-deals-as-economy-expands