Russia seeks private equity partners

It is not the first time the government has tried to promote the sector; five years ago Vladimir Putin put hundreds of billions of rubles into seed funds hoping to promote the industry. Rusnano, that government fund, was valued at around $130bn last year, however it was entirely government money. The Russian Venture Company (RVK) was set up to invest this money, but there remain some impediments: firstly, venture and private equity funds are still treated as mutual funds, and Russia does not yet recognise limited liability partnerships.

This may be about to change. Russian president Dmitry Medvedev is pushing the issue of investing in innovation hard, stating in a recent session of the Commission on Modernisation and Development "I charge the Presidential Administration and Russian Government with preparing propositions on disciplinary responsibility of the heads of state corporations. I have approved a number of solutions on state structures already, and they will be published soon. Investments do exist, and there is money available for these investments. But, practically, there are no innovations at all. And there is little high-tech competitive products" (translation from Russian Private Equity & Venture Capital Association).

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