Russian sovereign wealth fund courts more Singapore investors

Singapore

RUSSIA is about to embark on an infrastructure spending programme worth US$100 billion, and the head of the country's dynamic sovereign wealth fund is eager to have more Singapore companies tap some of these lucrative opportunities.

Kirill Dmitriev, the chief executive officer of the Russia Direct Investment Fund (RDIF), in an exclusive interview with The Business Times, said: "The economic relationship between Singapore and Russia is already very good, but to move things forward, there is a need to generate more awareness of investment opportunities in Russia - both for the top Singapore companies, as well as the middle-sized firms."

The 43-year-old Harvard and Stanford-educated former Goldman Sachs banker was in Singapore this week for a series of meetings with investors and government officials, in conjunction with the Asean Summit.

His trip coincided with the first state visit to Singapore by Russian President Vladimir Putin, which took place during the 50th anniversary of diplomatic relations between the two countries.

Created in 2011, the RDIF has reserved capital of US$10 billion under management. To date, it has invested more than US$25 billion, with the bulk of that figure (US$22.8 billion) coming from its partners.

The fund has also attracted over US$40 billion of foreign capital into Russia's economy - currently the sixth-largest in the world - through various long-term strategic partnerships.

Singapore accounts for the eighth-largest amount of foreign direct investment (FDI) into Russia. As of the first quarter of 2018, the volume of accumulated FDI reached US$17.3 billion.

Mr Dmitriev spoke highly of some of RDIF's key partners from Singapore, among them Changi Airports International (CAI) and GIC.

In 2016, CAI signed a major deal with Russian investment firm Basic Element and RDIF to manage the Vladivostok International Airport. The airport recorded a 20 per cent year-on-year growth in passenger traffic this year, with new flights to Japan, South Korea and China added to the offerings for passengers.

Mr Dmitriev also shared that GIC has invested US$6 billion in Russia, including a co-investment deal with RDIF in Russian companies such as the Moscow Exchange, Alrosa (the world's largest diamond miner) and Transneft (an oil pipeline company).

"We very much value GIC's expertise and know-how. They are one of the best investors in the world, and we hope to continue to co-invest with them in public companies in Russia," he said.

He also hopes that Temasek Holdings - a co-investor with RDIF in various projects in China - will consider Russia as a viable destination at some point.

"Temasek's portfolio of companies can be part of the US$100 billion infrastructure programme by the Russian government. We are ready to offer our local expertise and act as an effective investment filter," he said.

During Mr Dmitriev's stay here, RDIF inked a number of new agreements with some Singapore-based companies and other partners.

On Wednesday, Singapore's Asian American Medical Group, JSC Rusatom Healthcare (a subsidiary of Russia's nuclear power corporation Rosatom), and RDIF joined hands to develop a nuclear medical centre in Iskandar Puteri in Malaysia.

RDIF is also partnering the non-profit Skolkovo Foundation and Singapore's Action Community for Entrepreneurship to promote Russian and Singapore start-ups and develop entrepreneurial initiatives in both countries.

The latest figures show that there are more than 600 Russian companies present in Singapore.

There are much fewer in the opposite direction, with just 20 Singapore companies present in different regions of Russia. Some examples are Food Empire, Visenze (an artificial intelligence-based visual company), and Educare International Consultancy.

Mr Dmitriev said RDIF will continue to work with trade promotion agency Enterprise Singapore to reach out to more Singapore companies and raise the awareness of the numerous investment opportunities across Russia.

"Overall, I would say we have very good cooperation with Singapore, and there is much more work to be done in the years to come. On our part, we will also do our best to educate Russian companies and inform them of the ease of doing business in Singapore," he said.