Fact Sheet: United States Overseas Private Investment Corporation's Investment Fund for Russia and Eurasia

At the request of President Bush and in recognition of the important relationship between the United States and Russia, the United States Overseas Private Investment Corporation (OPIC) is establishing a $100 million private equity fund for Russia and Eurasia.

• OPIC will contribute a $33 million loan to this fund and is issuing a call for proposals for a fund manager coincident with President Bush's May 2002 visit to Russia.
• The new Russian fund incorporates new internal controls, a transparent and competitive selection process, and a new leveraging ratio that will lower the risk to the U.S. government and more fully mirror financial structures used by other developmental institutions, particularly the multilateral agencies.
• OPIC currently supports eight private investment funds, with committed capital of $1.2 billion, which can invest in Russia and its neighboring states. Those funds have already invested a total of $820 million in 142 enterprises.
• A study recently commissioned by OPIC to determine supply and demand for private equity in Russia found an equity gap of $2.2 billion in 2003, which is projected to increase to $4.6 billion by 2007. This new fund will help to bridge this gap.

The new Russia fund is in keeping with the mission of OPIC's funds program to serve as a catalyst for private sector economic activity in developing countries. By supporting privately-owned and privately-managed investment funds that make direct equity and equity-related investments in new, expanding, or privatizing companies, OPIC is helping to provide long-term capital and critically-needed technology and management skills. OPIC-supported funds are limited to regions or sectors that have been identified as having particular needs for equity funding not being met by the private sector. The fund manager is expected to add value to the portfolio investments by providing management expertise, improved marketing, and access to international manufacturing technologies.