Baring Vostok Capital Partners Invests in Russia's Growth

Baring Vostok Capital Partners has a long history of investing in Russia's growth, having been established in 1994. The firm has made significant investments in various sectors, including financial services, retail, and healthcare.

Their investments have enabled many Russian companies to expand and modernize, contributing to the country's economic development. Baring Vostok Capital Partners' commitment to Russia's growth is evident in its extensive portfolio of companies.

The firm's investments have also helped create jobs and stimulate economic activity in Russia, making a tangible impact on the country's economy.

Baring Vostok Capital Partners has invested over $2.4 billion in 67 companies since its inception. This impressive track record is a testament to the firm's expertise and strategic approach to investing.

Baring Vostok's early stage investment in Yandex, a Russian search engine, is a notable example of the firm's success. In 2000, Baring Vostok acquired a 35.7% stake in Yandex for $5 million, which later generated an estimated $4 billion in value, representing a return of over 800x.

Baring Vostok's investment strategy has yielded numerous other successful investments, including Volga Gas, Borjomi Mineral Water, and Ozon.ru. The firm's ability to identify and capitalize on emerging opportunities has been a key factor in its success.

Here are some of the notable companies in which Baring Vostok has invested:

Baring Vostok's history dates back to 1994 with the formation of the First NIS Regional Fund. The firm has since grown and evolved, completing numerous fundraising rounds and expanding its investment portfolio.

Baring Vostok has invested over $2.4 billion in 67 companies since its inception.

The firm's most notable investment is in Russian search engine Yandex, where they acquired a 35.7% stake in 2000. This early stage investment generated a value of approximately $4 billion at the time of the Yandex IPO, representing a return on their original $5 million investment of over 800x.

Baring Vostok's portfolio includes companies such as Volga Gas, Borjomi Mineral Water, Ozon.ru, and Burren Energy.

Some of the firm's other notable investments include CTC Media, Centre of Financial Technologies, Enforta, ER-Telecom, 1C, Kaspi Bank, Orient Express Bank, Europlan, and Karo.

Baring Vostok's investment in Avito.ru, a Russian online marketplace, and Tinkoff.ru, a Russian online bank, are also worth mentioning.

Here's a list of some of Baring Vostok's notable investments:

Baring Vostok Capital Partners has a rich history dating back to 1994 with the formation of the First NIS Regional Fund, a joint venture between Baring Asset Management and Sovlink, a Russian-American merchant bank.

The firm's roots in Russia go back several centuries, with Baring Bank serving as the primary international bank for the Russian Emperors. This long-standing connection laid the groundwork for the company's future success.

In 1997, Baring Vostok Capital Partners became an affiliate of Baring's BPEP International, and after the collapse of Barings Bank, the ownership of BPEP International was assumed by the Dutch bank ING Group.

The firm's first foreign private equity fund was raised in 2001, with $205 million of investor commitments, making it the first foreign private equity fund raised in the aftermath of the 1998 Russian financial crisis.

Baring Vostok's partners completed a management buyout from ING Group in May 2004, purchasing ownership of its management company, and affiliates in Asia, India, and Latin America followed suit.

In 2005, the Baring Vostok Private Equity Fund III was raised with total committed capital of $413 million, a significant milestone for the company.

Baring Vostok's fourth private equity fund, raised in February 2007, was the largest private equity fund in Eastern Europe at the time, with a total committed capital of $1.1 billion and a parallel fund, Baring Vostok Fund IV Supplemental Fund, which raised over $300 million.

The firm continued to grow, raising a record-breaking $1.15 billion for its fifth private equity fund in October 2012.

Baring Vostok is a pioneer in international investment in Russia, having attracted nearly $4 billion in funds.

Michael Calvey and his partners set up the firm in the mid-1990s while working at the European Bank for Reconstruction and Development.

Baring Vostok famously earned a 500-fold return on its investment in Yandex, Russia's Google.

The fund was one of the first major backers of several leading Russian companies, including Ozon, VkusVill, Tinkoff, and 1C.

Calvey and his partners have a really good understanding of the Russian authorities, which has helped them navigate difficult situations without losing assets or sparking scandals.

They've worked with various high-ranking individuals to protect their interests, including representatives of the security services and even former cosmonaut Alexei Leonov.

In 2019, the firm made headlines beyond Russia due to a conflict with businessman Artem Avetisyan, a close friend of First Deputy PM Andrei Belousov.

Baring Vostok lost a court case related to the conflict and paid 2.5 billion rubles to Vostochny Bank, which it had held a controlling stake in.

Calvey received a five-and-a-half year suspended sentence in 2021 after spending almost two years in detention.

Baring Vostok's exit from Russia is a complicated case, with 12 Russian portfolio companies involved in its planned "divorce." The main issue holding up the sale is Baring's stake in Ozon, Russia's second-largest online marketplace.

Baring Vostok controls 27.7% of Ozon, a stake worth about $1.6 billion at current exchange rates. The Presidential Administration won't give Baring Vostok permission to sell to its chosen buyers precisely because of that Ozon stake.

Ozon has continued to grow steadily, with revenues up 67% to $3.3 billion in 2022, and in the third quarter of 2023, the company reported revenues of $1.2 billion, up 77% on the same period last year.

The main issue holding up the sale is Baring's stake in Ozon, Russia's second largest online marketplace.

Baring Vostok controls 27.7% of Ozon, a stake worth about $1.6 billion at current exchange rates.

The Presidential Administration won't give Baring Vostok permission to sell to its chosen buyers precisely because of that Ozon stake.

The Kremlin believes there are more suitable candidates to take over Baring's share of the online retailer, including investment vehicles linked to Ivan Tavrin.

Tavrin is a former CEO of top Russian telecoms group MegaFon and is actively involved in some deals related to the exit of other online companies due to the war.

Ozon is the biggest asset in Baring Vostok's Russian portfolio and one of the largest marketplaces in Russia, with 42.5 million active users.

The site has continued to grow steadily, with revenues up 67% to $3.3 billion in 2022, despite the war and the mass exodus of foreign brands.

Michael Calvey, a US investor, and his French business partner Philippe Delpal have left Russia after complying with travel restrictions imposed on them following their suspended sentences in a fraud case.

Calvey received a five-and-a-half-year suspended sentence in August 2021 for his alleged role in a $34 million embezzlement scheme.

The pair's departure was a result of the lifting of restrictions on Calvey's movements in January 2022.

An appeals court had lifted the restrictions a month before Russian forces invaded Ukraine in February 2022.

Calvey's fund, Baring Vostok, had invested almost $3 billion in top-tier companies like Yandex and Ozon before the controversy.

Calvey and Delpal's case sent shockwaves through Russia's investment and business community, with many seeing the charges as fabricated to settle a corporate dispute.

Their departure marks the end of a highly publicized case that had a significant impact on Russia's corporate world.

Baring Vostok Capital Partners is a private equity firm that focuses on opportunities throughout Russia and the CIS. It was established in 1994 and is headquartered in Moscow.

The firm has a significant amount of assets under management, with $3.7 billion USD in PE assets. Baring Vostok Capital Partners is a large firm that targets rapidly-growing, later stage companies facing challenges.

The firm looks to commit between $30 to $200 million per transaction and has a sector-agnostic approach, meaning it invests in a variety of sectors. Sectors of interest include internet, software, media, telecom, natural resources, financial resources, and consumer products/services.

Baring Vostok Capital Partners has a strong track record of successful deals, with 11 out of 20 overall deals being successful. The firm has also had success in the digital media sector, with 1 out of 1 deals being successful.

Here are some key deal statistics for Baring Vostok Capital Partners: