1. Most private equity roles in Russia deal with the technology, media and telecoms (TMT) sector

In the 3rd quarter of 2011, Private Equity Russia & CIS Journal estimates there were 10 deals involving PE funds in Russia, most of which were focused on the TMT sector.

Alexander Lupachev, CIO of the Skolkovo Foundation and ex-director for Finam Capital Partners, the PE division within Finam Group says: “There are approximately 20 VC/PE management teams operating in Russia(and) 80% of them have some exposure to TMT.” Finam is one of the largest investors in TMT with over 50 companies in its portfolio.

Maxim Popov, the Moscow-based investment director of Helsinki-based PE firm Capman Russia, recently told the business media he remained very interested in telecoms and healthcare, after buying 20% of ISP provider Siberian Networks.

2. International private equity funds are pushing into Russia

Last November, Blackstone COO Tony James told analysts that Blackstone had established “a small beachhead out of Moscow” in the first quarter as it sought out opportunities. There have also been reports that Goldman Sachs has invested $1bn in private equity in Russia.

3. The state is moving into private equity investments

Dmitry Medvedev’s initiative to create a $10bn  (in five years) state backed PE fund to be coordinated by state bank VEB with Kirill Dmitriev, the former Goldman Sachs banker and president of Moscow-based Icon Private Equity as CEO, has created a buzz. There were reports last year that the Kremlin was looking to fill 30 PE jobs, hiring mostly Russian professionals.

Dmitriev’s Russian Direct Investment Fund (RDIF) is designed to provide a showcase for bringing PE funds to the country, and has some big international names on its advisory board. It intends to focus on investments in infrastructure, pharmaceuticals and aerospace as well as telecoms.

4. PE funds hire few staff and are very fussy

Lupachev says most ofRussia’s major private equity funds will hire no more than 5-15 people per year.

Former investment bankers are popular private equity hires, as are ex-management consultants. “A few large players (VTB, TPG and Baring) tend to prefer investment bankers,” Lupachev says.