For Immediate Release
Office of the Press Secretary
May 24, 2002
Fact Sheet: Investment Fund for Russia and Eurasia
United States Overseas Private Investment Corporation's
Investment Fund for Russia and Eurasia
At the request of President Bush and in recognition of the important
relationship between the United States and Russia, the United States
Overseas Private Investment Corporation (OPIC) is establishing a $100
million private equity fund for Russia and Eurasia.
- OPIC will contribute a $33 million loan to this fund and is
issuing a call for proposals for a fund manager coincident with
President Bush's May 2002 visit to Russia.
- The new Russian fund incorporates new internal controls, a
transparent and competitive selection process, and a new leveraging
ratio that will lower the risk to the U.S. government and more fully
mirror financial structures used by other developmental institutions,
particularly the multilateral agencies.
- OPIC currently supports eight private investment funds, with
committed capital of $1.2 billion, which can invest in Russia and its
neighboring states. Those funds have already invested a total of $820
million in 142 enterprises.
- A study recently commissioned by OPIC to determine supply and
demand for private equity in Russia found an equity gap of $2.2 billion
in 2003, which is projected to increase to $4.6 billion by 2007. This
new fund will help to bridge this gap.
The new Russia fund is in keeping with the mission of OPIC's funds
program to serve as a catalyst for private sector economic activity in
developing countries. By supporting privately-owned and
privately-managed investment funds that make direct equity and
equity-related investments in new, expanding, or privatizing companies,
OPIC is helping to provide long-term capital and critically-needed
technology and management skills. OPIC-supported funds are limited to
regions or sectors that have been identified as having particular needs
for equity funding not being met by the private sector. The fund
manager is expected to add value to the portfolio investments by
providing management expertise, improved marketing, and access to
international manufacturing technologies.
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