Private Equity Russia

Kommersant has reported that Renaissance Group is restructuring its asset management division, Renaissance Investment Management into two separate units that will focus respectively on private client wealth management and institutional asset management.  This decision was taken due to the weakening position of Renaissance Investment Management in the market, largely due to the investment environment, management and ownership shakeups at the group level and the exodus of key managers and clients from the division over the past year.

The name Renaissance Investment Management will no longer be used and will be replaced by Renaissance Wealth Management and Renaissance Asset Managers.

As part of this development strategy the group will reduce the number of mutual funds offered, and will focus on infrastructure investments, venture capital and private equity.

It also intends to improve its system of international distribution and to launch several funds in Luxembourg by June 2010.

Renaissance Investment Management managed nine mutual funds with a net asset value of 1.12 billion rubles as of  February 16, 2010.

Renaissance Investment Management struggled with declining volume of funds under management, going from 107 billion rubles at the start of 2009 to 70 billion rubles by September 2009.

In addition, the group was plagued with multiple defections of top  managers, including Andrei Movchan, who left to found the company Third Rome and subsequently took more than twenty key employees from Renaissance to his new group.

Then in April last year, RIM president Kirill Levin moved to Sberbank.  In addition, about about ten employees moved to Aton Capital Partners.

According to the new structure, Renaissance Wealth Management, which will focus on private banking and high net worth private client services, will be led by Ekaterina Konstantinova, who was previously a portfolio manager in real estate at Renaissance. Renaissance Asset Management will serve institutional investors and intermediaries through investment fund, private equity and individual product offerings.  The Chairman of the Board of the new unit is Ashar Qureshi, former partner at Cleary Gottlieb.  Managing Director of Investments will be Plamen Manovski.

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