Is Russia Ready for Long-Term Investments?

MOSCOW - Russia is not quite ready yet for inward investments. This was a general opinion of experts at the meeting organized by Finance & Investment Markets Players Club (KIFIR) and the Institute of Contemporary Development (INSOR), which took place in Moscow on 13 October. Many experts agreed that the main reasons that slow down investments in to the country’s economy are the artificial obstacles, including a complicated tax system, border customs, bureaucracy, as well as luck of transparency and ineffective communications etc.

The Principle of Marchmont Capital Partners, Kendrick White, stated that he sees a big potential in Russia in the post-crisis development, in particular in nanotechnologies. At the same time he noted that Russia should see its weaknesses from its past, which include lacking in investment education and established beliefs in business as a quick short-term enterprise.

KIFIR’s Chairman, Eugene Kasevin, noted that currently Russia has “a habit of quick and large profits”. Therefore, as noted White, there is a need in new business culture, especially among youth. This culture should be based upon moderate, but stable and long-term profiteering.

In relation to the economic crisis in Russia, the Vice-President of UK’s Gryphon Investment Bank, Evgeny Shtemanetyan, noted that Russian oligarchs generally do not take much interest in so called “non-profile projects”, which include innovations and nanotechnologies.

Shtemanetyan believes that in current Russia the potential is in projects, which look at substituting the imports with local products, including production of food and soft drinks. He also mentioned that foreign investors are always interested to place their money with “upcoming stars in business”, in whichever sector.

Looking ahead, Shtemanetyan noted that any business that has a good brand is more likely to generate higher profit margins. This always requires ongoing investment in good marketing, and the results may take a long time. Alexandre Bykov agreed with him while presenting a case when the Russian government should consider a consolidated approach to developing a strong brand Russia.

KIFIR experts concluded that Russia is lacking its own business angels and private investors who could invest in Russia’s long-term projects, profits from which may not come instantly.

Club KIFIR proposed to form a working group of experts, who will offer expert advice on realistically achievable developments in Russia being ready for the inward investments and become a lobbying group of advanced practices of pre-investment preparation of local projects. The group of experts agreed and is ready to act.

KIFIR experts included Andrey Zuzin (MD, VTB Asset Management), Vladimir Gerasimov (Executive Director, Interfax), Vladimir Luzhetsky (Head of IR/PR, Mint Capital), Alexey Goriaev (Professor, Russian School of Economics), Igor Maltsev (Publisher, Finance Magazine), Alexandre Bykov (Head of Russia, PR Newswire) and others. The expert round table was moderated by Nikita Maslennikov (Expert Advisor, INSOR).

Alexandre Bykov represents PR Newswire which is an Information Partner of KIFIR. PR Newswire is a global communications services company whose mission is to connect communicators - whether they are public relations, investor relations, marketing, advertising, CEO’s or other professionals - with their audiences, wherever these audiences are ( www.prnewswire.co.uk/cgi/news/release?id=226970)

Club KIFIR Chairman, Eugene Kasevin, +7-963-716-5837, kasevin@kifir.info, www.kifir.info

Source: KIFIR

Club KIFIR Chairman, Eugene Kasevin, +7-963-716-5837, kasevin at kifir.info