Sovereign wealth funds in China and Qatar on Friday signaled their increased commitment to Russia, boosting Moscow’s hopes of strengthening ties with Asia and the Middle East as relations with the West deteriorate.
Major sovereign wealth funds in the Middle East and Asia have invested in Russian businesses and backed its state-funded private equity fund, the Russian Direct Investment Fund. By contrast, US financial investors in the country remain few.
“CIC (中國投資公司) has invested several billions of [US] dollars in Russia,” said Ding Xuedong (丁學東), chairman of the US$575 billion CIC, on the sidelines of the country’s main annual investment conference in St Petersburg.
“We will continue to increase our investment in Russia, not only in the public markets, but in direct investments,” he said.
Russia’s equity fund separately announced that Qatar’s sovereign wealth fund, the Qatar Investment Authority, is allocating US$2 billion to investments with the fund.
Numerous US financiers avoided the annual investment conference in St Petersburg on advice from the White House. Washington and the EU have imposed sanctions against various individuals deemed close to Russian President Vladimir Putin in response to the situation in Ukraine.
“In our platforms — we raised US$10 billion from our partners — around 90 percent came from Asia and the Middle East,” fund chief executive Kirill Dmitriev said. “Those longer-term investors ... take a longer-term view on Russia. They see some turbulence, but realise it is impossible to isolate the sixth-largest economy in the world.”
Among those present on a panel discussion on Friday were senior executives at Korea Investment Corporation and Kuwait Investment Authority. European funds, facing less government pressure than their US counterparts, also showed commitment to Russia.
“We think there is a lot of potential in this country,” France’s CDC International Capital CEO Laurent Vigier said.
“We are looking actively at the moment at opportunities in this country and are optimistic about the medium and long term,” he said.