GUEST COMMENT: Private equity hiring in Russia is slowly coming of age
Private Equity remains a young sector in Russia. However, it is one that is steadily active, especially when you look at the TMT arena. High-profile IPOs like Mail.ru and big players like investment firm Digital Sky Global (DST) (which has become one of the biggest investors in Facebook alongside Goldman Sachs ) have helped to raise Russia’s game
We are seeing a range of different organizations moving intoRussia’s private equity sector. More and more investors are seeking to make the most of Russia’s scientific research base. The country’s private equity and venture capital sector is consequently comprised of a combination of pioneers like Kendrick White of Marchmont Capital, government sponsored initiatives, or simply local entrepreneurs moving into venture capital,.
However, the significant hiring has come from state sponsored/partly sponsored or state owned entities such as VTB, Sberbank, Skolkovo Foundation, Rusnano and RDIF. The big and long established independent funds – essentially Baring Vostok and Russia Partners are active, but recruitment there has been more modest. By contrast, most of the small to mid-sized PE funds have not been hiring or developing much lately.
Although very large international PE funds are monitoring developments inRussia, they have generally committed very modest capital thus far. One interesting trend though is a renewed interest in PE from international financial institutions and development banks. They are few in number, but often contributed substantially to the launch of the first PE/VC investments inRussiain the 1990’s. These organisations look back on a volatile but clearly profitable long-term track record and are interested in expanding further intoRussia’s PE sector again in 2012.
Finding the right people to work in PE isn’t easy though. ‘Proven’ profiles of experienced Russian private equity professionals with a successful investment record are few and far between. Investment banking has not been a direct route to PE in the past here as it is still too small, and not specialised enough to serve as a PE training ground – unlike in the West. There are, of course, investment bankers who successfully switch into PE, but a career in banking isn’t, in itself, a recipe for success in private equity.
Russia’s private equity industry has traditionally been likely to draw its staff from wide horizons like large multinational companies, top professional services firms or the senior managers of portfolio companies which its funds have invested in. These managers have the advantage that they already understand the rules of the game.
Gregory Camou is Principal and Head of the Moscow Office at search firm Pedersen & Partners.
