Investors delve into Russia’s regions
Foreign investors have made fortunes investing in Russia. But now they are looking to go deeper, and are packing their bags to discover Russia’s regions. Julian Evans reports from three of Russia’s developing regions.
MATTHIAS WESTMAN, CEO of Prosperity Capital Management and one of the more experienced western fund managers working in Russia, is excited. He thinks he’s discovered the next big thing in the Russian markets. “It’s a pig farm,” he enthuses. “A pig farm in Yaroslavl. Actually, it’s more like five or six large-scale pig farms. They’ve got around $1 billion in sales a year.” That’s a lot of pigs.
Westman is one of a handful of savvy western investors and financial institutions that are travelling deep into Russia’s regions, in search of hidden bargains. The rationale is simple – Russia has now matured as an economy, and its blue chips like Gazprom or Rosneft are attracting the biggest global institutional funds. So it’s time for more experienced investors to go beyond the obvious assets, beyond Moscow and St Petersburg, and look for undiscovered gems in the regions.
East Capital, another wise old investor in Russia, is pursuing a similar strategy.