RenCap Starts Infrastructure Fund

Renaissance Capital and Australia's Macquarie Group on Saturday announced the establishment of the first major infrastructure fund for Russia and the CIS as the government plans investments of $1 trillion into upgrades of facilities such as ports, railways, roads and airports.

The first investors into the fund, which aims to raise $1 billion to $1.5 billion, are the state-owned Development Bank, the Eurasian Development Bank, or EDB, co-owned by the Russian and Kazakh governments, and Kazyna Capital Management, a Kazakh-based firm, Renaissance said in a statement.

The Development Bank, formerly Vneshekonombank, and EDB, have each committed $200 million, while Kazyna will contribute $50 million for central Asian projects, the statement said.

The fund will buy controlling or significant stakes in infrastructure companies working on projects such as ports, airports, roads, railways and municipal utilities and will aim for operational control, said Bob Foresman, deputy chairman of Renaissance Capital.

Renaissance and Macquarie, one of the world's leading infrastructure project managers, are also seeking funds from the International Finance Corporation and the European Bank for Reconstruction and Development.