A survey of over 200 fund managers by C5 and Squire, Sanders & Dempsey reveals that 34% were raising capital in Russia/CIS. In 2005, this figure was 22%, according to the European Venture Capital & Private Equity Association. Around 30% of respondents indicated Europe as a resource for capital and just under 25% tapped North America for capital. Investors based in Asia and the Middle East do not yet represent a major source of funds – both accounting for 5%.
In terms of deal size, around 25% of respondents were doing deals valued at more than US$20m and just over half of the stated deal sizes are being done at the lower end, between US$10m and US$20m.
In terms of exits, around 38% of those investing in Russia exited their investments after more than four years and most exit within two to four years. The main reason for write-offs in the region is cited as untrustworthy partners – principals and shareholders in portfolio companies. Other reasons are lack of added value or financial control, followed by weak deal structure and macroeconomics.