As Russia sanctions and the Ukraine crisis create uncertainty, the Financial Times has reported that private equity and buyout group Blackstone is “giving up on Russia” as the group has been frustrated in its attempts to find deals there since its co-founder Stephen Schwarzman joined the international advisory board of the Russian Direct Investment Fund, a $10bn government-backed fund, three years ago.
Blackstone also hired Dmitri Kushaev, the former head of investment banking at ING in Russia and a former private equity executive, as senior adviser to assist on deals in the country. However, the group does not have an office in Russia and has chosen not to renew the contracts of the consultants it employs in the country.
Blackstone, which oversees $279 billion in assets including private-equity, real estate, credit and hedge-fund investments, has declined to comment on the moves with an unnamed source commented:
“In the good times, Blackstone couldn’t find anything to do and in the bad times, Blackstone can’t imagine doing anything.”
Earlier this month, DMC Partners, a private equity group founded by three former Goldman Sachs executives including the bank’s former Moscow chief, was called off after failing to raise a planned $2 billion investment fund while the well connected Carlyle Group has exited the market twice with the last time in 2005 – saying the returns were not worth the risks.
TPG Capital is the only global buyout group of significant size to have built a presence in the Russia market which remains dominated by local players, oligarchs and state-owned bank VTB.
To read the whole article, Blackstone to pull out of Russia, go to the website of the Financial Times.
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