Russian PE: A bull play in a bear market

WHILE PRIVATE EQUITY firms in the US and western Europe are facing the twin perils of an economic recession and severely reduced access to capital, the opposite is true of the emerging markets universe in general and Russia in particular. Talk to private equity firms in Moscow and there is an unmistakeable air of optimism about the prospects for the asset class, given continuing strong economic output and a growing pool of investable companies and investors to back them.

However, a refreshingly pragmatic stance is being taken by many of the private equity players in Russia. The public equity markets have at times been a perfect example of hype outweighing reality but participants in private equity, which perforce has a longer-term investment viewpoint than listed equities, have a much more measured view of Russia’s investment potential. Although the overall climate for Russian private equity firms has arguably never been more...