Pepeliaev Group and Business Russia’s Industrial Closed-End Mutual Investment Funds Subcommittee Have Entered into a Strategic Partnership

The Industrial Closed-End Mutual Investment Funds (CEIFs) Subcommittee of Business Russia, chaired by Alexander Kostrov, a member of the organisation’s General Council and the CEO of RTTP LLC, and the law firm Pepeliaev Group have entered into a strategic partnership aimed at developing a mechanism for financing industrial enterprises in Russia through CEIFs using debt-based leveraged buyout (LBO) structures.



The collaboration follows a legal opinion prepared by Pepeliaev Group at the initiative of the Subcommittee. The firm’s lawyers confirmed the systemic diagnosis presented by an expert report by Alexander Kostrov: the absence of an LBO market in Russia is a key barrier to attracting private investment in mature mid-sized industrial companies.


As part of the partnership, the parties intend to:

• prepare a joint analytical paper outlining a coordinated position on how to develop the LBO market in Russia.
• develop a package of legislative initiatives aimed at removing the barriers that have been identified, including issues of banking regulation and corporate procedures.
• design a pilot project to structure one of the first industrial CEIFs in Russia.

 

The initiative will be carried out under the expert working group of the Business Russia Subcommittee, with the involvement of representatives from the Bank of Russia, relevant federal ministries, and the investment community.