AVCA Mike Calvey

Baring Vostok Capital Partners: 

Baring Vostok Capital Partners Lessons Learned in Russian Private Equity November 2005 Baring Vostok Capital Partners

Contents: 

Contents Background on BVCP How is Russia Different? How is Russia Similar? Organization/Culture Investment Strategy Operating Management Philosophy

Background on BVCP: 

Background on BVCP

Baring Vostok: Proven Results Over Ten Years in Russia: 

Baring Vostok: Proven Results Over Ten Years in Russia Baring Vostok has been dedicated full time to private equity in Russia for over 10 years. Fund I ($160 million) was launched in 1994, Fund II ($205 million) was launched in 2000, and Fund III ($400 million) was launched in 2004. Aggregate track record: 41 direct investments made with aggregate cost of $397 million 23 fully/partially realized at 4.4x money and 44.7% gross IRR (30 September 2005) $712 million dividends distributed to date Estimated $415 million remaining portfolio Gross NAV (with 8 of 19 companies held at cost) BVCP has been a lead investor in many of Russia’s biggest private equity success stories, including Vimpelcom, Golden Telecom, Syktyvkar Forestry, Burren Energy, Borjomi, and others. BVCP is owned and managed by 11 partners based in Moscow, each with 10 years of investment or business experience. Prior to BVCP, the partners had diverse and complimentary backgrounds from industry, finance, or Russian government structures. Part owner and member of Baring Private Equity Partners International, a global investment network.

How is Russia Different?: 

How is Russia Different?

Nice Climate: 

Nice Climate

How is Russia Different?: 

How is Russia Different? Misdeveloped Country - Not Really Developed or Developing Single Country With Critical Mass/Scale Large Number of Entrepreneurial Local Investors With Substantial Capital

How is Russia Similar?: 

How is Russia Similar?

Inefficiency: Creates Barriers and Opportunities: 

Inefficiency: Creates Barriers and Opportunities Non-Transparency Wealth of Natural Resources Weak Banking Sector Unpredictable Politics

Organization, Strategy, Management: 

Organization, Strategy, Management

BVCP Organization/Culture: 

BVCP Organization/Culture Russian Firm with International Perspective Reputation, Reputation, Reputation Relentless Realism Encourage Challenging 360° Debate

BVCP Investment Strategy: 

BVCP Investment Strategy No Such Thing as a Bad Deal We Didn’t Make Start By Knowing What You Don’t Want To Do Focus on Core Industries and Develop Deep Expertise Follow-on Investments in Best Existing Companies Re-Positioning Companies to Capture Value

Burren Energy: 

Burren Energy

BVCP Operating Management Philosophy: 

BVCP Operating Management Philosophy Proactive Lobbying – Before the Fire Starts Hands-On Owner, Not Hands-On Manager Be Flexible and Don’t Have “Template Approach” React Quickly to Changes in Environment Bad News Should Travel Fast

SladCo: 

SladCo

Conclusion: Russian Lesson # 1: 

Conclusion: Russian Lesson # 1 “Кто не рискует, тот не пьёт шампанское.” “He who takes no risk, drinks no champagne.”

Conclusion: Russian Lesson # 2: 

Conclusion: Russian Lesson # 2 “Дружба дружбой, а служба службой.” “Friendship is friendship, but business is business.”

Conclusion: Russian Lesson # 3: 

Conclusion: Russian Lesson # 3 “Если ты хочешь, чтобы сны стали реальностью - не спи!” “If you want your dreams to come true, don’t sleep.”