Russian Private Equity landscape W hats today? Money flow cycle - - PowerPoint PPT Presentation

Russian Private Equity landscape W hat’s today?

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Money flow cycle Money flow cycle

Private Money Institutional Investors

Banks Pension Funds

Private Equity

Private Projects Private Equity Funds

Public Equity

Private Investments Public Equity Funds

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1999

“Mom, I am not a billionaire! A billion is like a thousand million. I’m worth a hundred million. A hundred million is just a hundred million.”

Global I ndustry Trends Global I ndustry Trends

2001

“I want my bubble back.”

2006

• Globalization will be defining them e for Private Equity industry in the coming years;
• W orld’s best m arkets have sim ilar characteristics – stable regulatory environments, liberal

policies toward private enterprises, well-funded financial systems;

• Private Equity firms will no longer to be able to rely on arbitrage or financial engineering to

generate returns. Value creation is a key. Successful firms will be those, who can see value- creating opportunities prior to the transaction and deliver them afterwards.

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1,44 1,26 1,05 0,61 0,60 0,45 0,45 0,39 0,37 0,34 0,33 0,31 0,28 0,26 0,23 0,21 0,11 0,10 0,03 0,12 0,14

Sweden UK Netherlands France Hungary Czech Republic Belgium Ireland Spain Denmark Italy Germany Switzerland Norway Finland Poland Russia Portugal Romania Austria Greece

Private equity investm ents as % of Private equity investm ents as % of GDP, 2 0 0 6 GDP, 2 0 0 6

Source: EVCA/ Thomson Financial / PwC, 2006.

Private equity is still in its infancy in the region. According to various estimates, capital under management of teams in Russia ranges from $8bn to $12bn Private equity investments in 2006 totaled $1,4bn or 0,14% of Russia’s annual GDP

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Russian private equity is sm all but Russian private equity is sm all but grow ing grow ing

TPG, Goldman Sachs, JP Morgan, Standard Bank Moscow Advent Kiev

300 635 2213 3241 5465 21 30 205 500 260

1000 2000 3000 4000 5000 6000 1994 1995 1996 2000 2001 2002 2004 2005 2006 2007* ($ million)

Raising dynamics (volume of new PE capital) in Russia

* Including funds that are being currently raised.

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Changing sources of return Changing sources of return

41% 25% 34%

• Future development?
• PE investors role?

Source: General Partner Survey, Asset Alternatives

% of total returns 100% 24% 33% 43% Sales/margin growth Multiple expansion Financial leverage 1986-90 1996-2000

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Adding value is a key Adding value is a key

If PE continues to offer superior governance, we believe it could rival the public market system in size

>25% organic sales growth annually Maintain or improve EBIT margin M&A opportunities can bolster growth further

Value from Growth

Unlock value from change in business organization Lead transformation work:

Financial management Decision-making process Legal structure Human Resources

Value from Change

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I nvestm ent team I nvestm ent team

Ulf Persson Managing Partner Co-Founder Fredrik Ekman Managing Partner Co-Founder Gleb Davidyuk Partner Ben Wilkening Partner Kirill Vesselov Investment Manager Vladimir Zaluzhsky PR and IR Manager Ahmadishin Evgeny Investment Manager Dmitry Fedoseev Investment Manager Tatiana Gerastovskaya Financial Controller

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Selected I nvestors Selected I nvestors

Private 70% Institutional 30%

Structure of capital Geography of capital

World 10% Scandinavia 90%

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Mint I $21m Mint III $300 – 400m

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Mint II $130m Funds’ development

2005 06 07 Fall 08 Mint III fundraising 2001

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1 2 02 03 1 2 1 1 5 4

Progress in capital under Progress in capital under m anagem ent m anagem ent

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Our Portfolio Our Portfolio

More then 70 Mio SUD invested

1 2

PR & Marketing PR & Marketing

The Result: Mint Capital is number 2-3 most quoted private equity fund in the Russian media 2-3 business plans received a week, as compared to 1-2 per month in 2006 Regular applications from major LPs for possible investing in Mint III 10-fold increase in the number of website visitors Management speaking for free at ~10 industry events a year Industry associations Conferences Business & specialized Media Website

General public Regulators Entrepreneurs Investors PR tool