July 13, 2012

FIDE President and Ashmore Group set up a joint fund

As Kommersant reported the FIDE President has established a joint fund with Ashmore Group.

The President of the International Chess Federation (FIDE), ex-President of Kalmykia Kirsan Ilyumzhinov has found a partner for the  investment business. Mr. Ilyumzhinov founded the fund up to $ 10 billion with one of the UK  largest fund Ashmore Group which has assets of $ 65.9 billion. Partners are interested in projects in the electric power, metallurgy, food processing, and telecommunications.

Two representatives of the investment bank informed Ashmore would be Ilyumzhinov’s partner in new investment project. Yesterday in London the relevant documents were signed by Kirsan Ilyumzhinov and the largest shareholder of Ashmore fund manager - Ashmore Group plc Mark Coombs. Information source of Kommersant confirmed the fact. According to the information source the partners should only give a name to the joint structure which would include the name of the British Ashmore.

The Fund will be formed on a parity basis, Kirsan Ilyumzhinov will give half of money and the other half of sum - Ashmore Group. "This is the first time in the history of the Ashmore Group, when it becomes partners with a private person," – the informant says knowing the details of the deal. It is planned that the fund will invest in various projects in Russia, the CIS and Asia (Japan, Malaysia, Singapore and Hong Kong). The headquarters of the newly created fund will be in Moscow and Singapore.

The leading projects will be projects in fuel and energy sector, metallurgy and telecommunications as well as in food processing. One of the interlocutors of Kommersant added : "the Fund is also interested in the privatization of the objects from the list approved by the Prime Minister Dmitry Medvedev."

According to the agreement between Kirsan Ilyumzhinov and Ashmore Group the start-up capital of a joint fund will be $ 1 billion with increase to $ 10 billion. Previously Kirsan Ilyumzhinov has said: "The fund will attract foreign investors’ funds as well as his "own funds". Yesterday Kirsan Ilyumzhinov and Ashmore Group representatives declined to comment before the official announcement of the deal.

Ashmore Group plc is the British investment fund specializing in emerging markets. It was founded in 1992 as part of the Australian banking group ANZ. In March 2012 the Fund had assets  of $ 65.9 billion. In 2006 the fund joined the LSE (London Stock Exchange). The largest shareholders are CEO Mark Coombs (42,18%), Financial Management Rate Of Return (4,99%), Black Rock (4,41%), finance director Graeme Dell (0.2%).

In December 2010 Mr. Ilyumzhinov has partnered businessman Yevgeny Roitman in telecommunication projects in South East Asia. And in June of the current year, it became known Mr Roitman acquired with the help of Credit Mediterranee (he was the owner og it) 52,5% stake in the Bulgarian Petrol Holding. The ex-president of Kalmykia is negotiating for joining the world's largest sugar traders Groupe Sucres & Denrees, as its Russian office has difficulty with the protection of its property rights on the territory of the Russian Federation (see "Kommersant", July 11).

In the Russian market three specialized Ashmore subsidiaries have been operating. VTBC-Ashmore Real Estate Partners (together with "VTB Capital") specializes in real estate investment in Moscow. Ashmore Russian Equity Fund was founded in December 1999 and specialized in securities. In June 29 the capital of the fund was $ 10 million. Ashmore Russian Debt Portfolio was founded in December 1996, worked in Eastern Europe, mainly in Russia and dealt with the debt. Besides in August 2011 using its funds Ashmore became a minority shareholder of Sberbank consolidating 0.87% of shares.

Investment banker who dealt with the negotiations, said that neither Ashmore nor any of its funds have not participated in risky negotiations in Russia. "when representatives of the fund make a bargain they can only rely on themselves. And it is very important to have someone with good relations in government who knows people and the situation more deeply not just financial statements. In Russia you can run your own business in case you can contact the necessary person Western funds don’t have such an opportunity while Kirsan Ilyumzhinov has. It can be expected that it will be substantial investment in major assets," – the analist of East Capital Fund Sergey Ivashkovskiy stated.