Venture Capital Fund - PowerPoint by fsq79985


More Info
Venture Capital
    Fund Concept

 Russian-Armenian Venture Capital Fund is being established as an initiative of
  Russian and Armenian government Commission for economic cooperation
  between Russia and Armenia
 Armenian government is attracting investments in the country via venture funds
  and free economic zones including those focused on innovations
 Russian-Armenian Venture Capital Fund will be funded by Armenian
  governmental development institutions, international finance organizations and
  private investors
 Prospective anchor investor Russian company SITRONICS intends to co-invest
  into the Fund as well as to render part of its RAO MARS site to high tech
  companies & their production facilities and may acquire successful companies
  eventually at exit stages
 Armenian government intends to grant special economic zone status to RAO
  MARS site
 Russian-Armenian Venture Fund will invest into Armenian and Russian
  companies that run innovative business within the generic framework of priority
  lines for technology development of both countries and are interested to
  establish production in Armenia
 The Fund will also invest into foreign companies that are seeking venture
     Fund Concept (cont’d)

 The size of the Fund is expected to be $70-80 million and will be formed in two
 The first closing of the Fund will be done at ~$40M level. SITRONICS and
  Armenian government intend to become anchor investors, and international
  finance organizations are expected to join and co-invest at this first stage as it’s
  extremely difficult to commit private investor money for the first closing of the
  Fund in current economic environment. However prospective Fund managers will
  use best efforts to attract interested specific groups of private investors,
  particularly international Armenian diaspora at this stage too
 The Fund managers will allow 12-18 months for the second closing of the Fund,
  and at this stage Fund size is expected to reach $70-80M, and prospective Fund
  managers expect to commit other investors including but not limited to
          governmental high tech investors and fund of funds like Russian
           Corporation Rosnanotech, Russian Venture Company and others
          international finance organizations like EBRD, IFC and others
          private investors from Russia, Armenia and other countries
 Prospective Fund managers will seek co-investors particularly international
  venture funds to co-invest on the deal level, especially when foreign innovative
  companies will plan to place production facilities and establish high tech
  Fund Strategy

Maximum potential is in technologies of overlapping
                                                       Priority science &
• Alternative energy sources
                                                       development lines:
• Energy efficiency
• Environmentally friendly manufacturing processes -      Security and
  raw materials, fuel and water processing                 counterterrorism
• New materials
• Nanotechnology                                          Life sciences
• IT                                                      Nano systems
                                                           and new
                                                          Information and
                                                           on systems
                                                          Environment

                          !                                conservation
                                                          Transport, air
                                                           and space
                                                          Energy and
                                                           power saving
  Fund Management Team

                        Boris                                                        Sergei
                        Mislavsky                                                    Bubnov
                        Managing                                                     Managing
                        General                                                      General
                        Partner                                                      Partner

• More than 25-year long experience in high-tech          • More than 15 years in banking & investments
industry                                                  • Managing director for alternative investments at
• Lead venture investments at Renaissance Investment      Renaissance Investment Management
Management                                                • Portfolio Manager for RenShares Utilities Fund (offshore
• Established small technology companies in early         closed end fund investing into CIS energy companies)
1990th                                                    • Invested in companies developing Russian-origin
• Over ten years with General Electric, established       technologies on international markets in the frame of
large engineering and technology center for GE in         establishing venture capital fund Islands of Excellence
Russia                                                    • Principal banker with the Power & Energy Utilities Dept
• Commercialized Russian-origin technologies in           of the European Bank of Reconstruction and Development
America, Europe and Asia                                  in London
• Invested in companies developing Russian-origin         • VP Emerging Markets Equity Research Dept of Merrill
technologies on international markets in the frame of     Lynch in London
establishing venture capital fund Islands of Excellence   • VP Equity Research Dept of Credit Suisse First Boston
• Established and developed Russian high-tech             • CFA, 1998
company and built its presence in international markets   • MBA/Chicago University
• 6 patents                                               • Moscow University for Foreign Affairs
• PhD
            Principals worked together to
• Moscow State University
                                              establish venture capital fund
                         and to invest into high tech companies
Fund Management Team

Unique combination of experienced principals
 Building effective business with high ethical standards
 High tech innovative projects management
 Finding prospective technologies and hi-tech companies
 Long time experience in technology due diligence and business &
  technical teams competence check
 IP protection management
 Development of strategic plans for company growth
 Management for on time & on budget execution
 Six Sigma quality methodology
 Negotiation skills and experience in licensing technologies and buy/sell of
  high tech companies
 Fund Prospective Advisers &

                                           Tony                             Sarah
                                           Amor                             Carey
                                           Pulsar                           Squire,
              Academy of
                                           Energy                           Sanders &          - UK-based Investment
                                           Capital LLP                      Dempsey LLP        Fund
• Member of Russian              • More than 35 years in      • Has got 20-year-long
Academy of Science               international energy         experience in Russia and
• More than 50 years in          business                     region in technology transfer
energy industry                  • Managing partner of UK-    business and intellectual        - American venture Capital
                                                              property protection              Fund
• The head of energy             based Investment Fund
section for energy and           • Headed $270M Fund          • Senior partner with the
                                                              global law firm Squire,
mechanical engineering of        engaged in development       Sanders & Dempsey, heads
Russian Academy of               and commercialization of     the firm's CIS practice
Science                          new technologies in energy   • Served as a director of two   - International consulting firm in
• The Chairman of scientific     industry                     venture capital funds with      energy & energy technologies
Council for energy industry      • Worked in oil and gas      investments in Russia and
development in Russia            sector of Shell in Europe,   the CIS
• The Chairman of United         Australia and Venezuela      • Bears the global Squire
scientific Council for thermal   • Headed diversified         Sanders network including
physics and heat                 energy and transportation    operations in Europe, Asia,
engineering                      company Natomas              the United States and Latin
• over 60 inventions, 6          • Headed Thermal Power       America, has got extensive
books, more than 250             - the most profitable        contacts in both technology     - Assistance to start-ups,
scientific articles              geothermal company in the    and investment communities        commercialization aid
                                 world at that time           • Harvard College and
                                 • MBA                        Georgetown University Law
                                                                                              - American incubator for start-
                                                                                              ups from different countries
  Fund Investment Policy

 Key selection criteria: Team + Company +

 Unique technology with well protected IP, good market potential on
  large existing and rapidly growing new markets
 Good standing company with transparent ownership structure and
  finances, with well stated business idea, adequate assessment of
  technical, financial, marketing and other risks, realistic strategy for
  high profitability and high return on investments, good potential for
  market cap growth
 Solid management team well tuned to collective work and
  partnership with Fund managers for implementing growth strategy
  and building company with high market cap
  Fund Investment Policy (cont’d)

 Existing prototypes
 Established IP protection for technologies and products and/or any other
  means of securing competitive advantages
 Transparent financial structure and company’s ownership allowing for
  sufficient control for investors
 Internal rate of return (IRR) higher than 45% and potential for company
  growth higher than 5 times
 Maximum investments in one industry will not exceed 30% of the total Fund
 Expected time to exit from individual investee companies – 3-5 years
 Minimum volume of investments into one company – $3M
 Maximum volume of investments into one company will not exceed 15% of
  the Fund size
 Well developed exit strategy for the Fund (M&A, MBO/MBI, Recapitalization,
  IPO, etc.)
Deal Flow & Fund Financial Indexes

   Project Sources                                        Sample Projects
 Contacts of Fund managing partners and Fund           Hydrogen sulphide (H2S) conversion by
  Advisory Board both in Armenia and Russia and          plasma technology
  outside, particularly in US and European high tech    Mobile social network
  communities and venture funds                         Continuous basalt fiber technology &
 Community of Armenian high tech companies              products
 Companies-participants of Innovation Contests         Terminal access to remote servers for
  (Boris Mislavsky, Managing partner has been a          small and medium size businesses
  member of the Russian Innovation Contest’s expert
  panel from 2001)
                                                        Triple junction solar cells & concentrator
                                                         PV power plant
 Companies-grantees with various government
  programs to support innovation business such as       Multiphase oil flow meter
  International Science & Technology Center (ISTC),     Scintillation and laser single crystals
  First/Next Steps to Market of US Civilian Research     production
  & Development Foundation (CRDF), European and
  other programs                                         Fund’s financial indexes
                                                        Average IRR, %                       45%
 Companies participating venture fairs
 Associations of venture investors and business-       ROI                                  4
  angels of Armenia and Russia
                                                        Value / EBITDA                       1.69
 Other investment funds and investment companies
  that work mainly with start-ups on pre-seed and       Value / Sales                        1.01
  seed stages in Armenia, Russia, USA and Europe
 Innovation companies from technology incubators
  and technoparks in Armenia and Russia
 Special web-site
  Deal Flow

Hydrogen sulphide (H2S) conversion                       Continuous basalt fiber technology
by plasma technology                                     & products
Kintech LLC                                              Kamenny vek LLC
 Summary: company developed new prospective              Summary: company developed new basalt fiber
  technology for oil refining industry                     production technology for various markets – wind
                                                           energy, construction, automotive industry
 Category: energy efficiency, environment protection
                                                          Category: nanosystems, material industry
 Innovation: developed technology is novel in the
  market; oil refineries worldwide use conventional       Innovation: developed technology allows for using
  steam reforming of methane for hydrogen production       natural basalt as raw materials leading to cost
  and Claus-process for hydrogen sulphide into             reduction and environmental friendliness
  commodity sulfur                                        Uniqueness: The material shows the best
 Uniqueness: technology allows for more efficient use     price/properties ratio as compared to competitors and
  of methane in both processes and therefore               easy disposal at the end of life cycle
  significantly reduces CO2 emissions                    Project’s financial indexes
Project’s financial indexes
IRR, %                                        101%       IRR, %                                     90.23%

ROI                                           3.7        ROI                                        1.24
Value / EBITDA                                1.6        Value / EBITDA                             1.79
Value / Sales                                 1.3        Value / Sales                              0.89
  Deal Flow (cont’d)

Multiphase oil flow meter                                       Single crystals production
LLC «Aktel»                                                     technology & scintillators
                                                                and laser components
 Summary: company developed new type of multiphase              Summary: new low gradient technology of oxide
  flow meters for oil recovery industry
                                                                  single crystals growth
 Category: process efficiency, environment protection
                                                                 Category: material industry
 Innovation: unique new gages and signal processing
                                                                 Innovation: developed technology allows for higher
  algorithms allow for real time monitoring of oil well
  output at significantly lower cost and with no                  quality and better properties, higher productivity at
  radioactive components                                          lower cost
 Uniqueness: new low cost oil flow meter makes it cost-         Uniqueness: These crystals have best price-to-quality
  efficient to install equipment on every individual oil well     ratio in comparison with any other products available
  and thus increase oil well efficiency respectively              in the market
Project’s financial indexes                                     Project’s financial indexes
 IRR, %                                            126%          IRR, %                                      72%

 ROI                                               3.4
                                                                 ROI                                         1.0
 Value / EBITDA                                    2             Value / EBITDA                              1.46
 Value / Sales                                     1             Value / Sales                               0.66
Fund Management Company

 Renaissance Investment Management (RIM) is a leading independent
  investment management company established in 2003 as a 100% owned
  subsidiary of the Renaissance Group with offices in Moscow, London and
  Geneva and with presence in Almaty, Kiev, Kenya and Dubai
 RIM has grown to over $3.4 billion in assets with approximately 150 employees
 A market leader in providing asset and wealth management services in high
  opportunity emerging markets
 Largest non-captive asset manager in Russia and one of the largest managers
  of the biggest Russian pension fund assets
 Largest non-captive player in the Russian real estate market and manages the
  biggest in Russia land fund
 In-depth experience and a track record in managing high opportunity emerging
 Delivering consistent superior performance by employing world-class
  investment management professionals
Fund Management Company (cont’d)

Renaissance Group has now expanded its offerings and services throughout the
   CIS, Africa and Middle East and will continue to expand in high-opportunity
                     emerging markets throughout the world


                                                      London                                         Almaty
                                                                      Kiev             Moscow
                                                             Genev                                     Almaty
                 New York



                                                Lagos                Abuja
                                                    Accra          Lagos



Note: Renaissance Group has a presence in the cities shown

 This presentation, furnished on a confidential basis to the recipient, is neither an offer to sell nor a solicitation of any offer to buy any securities,
      investment product or investment advisory services, including any other interests in private investment funds (the "Fund") to be managed
      by Renaissance Investment Management (UK) Ltd. It is intended exclusively for the use of the person to whom it has been delivered by
      Renaissance Investment Management (UK) Ltd, and it is not to be reproduced or redistributed to any other person without the prior
      consent of Renaissance Investment Management (UK) Ltd.
 A more complete description of the Fund, including but not limited to, the risks, fees and investment strategies of the Fund is contained in the
  information memorandums. Any offering is made only pursuant to the relevant information memorandum, together with the current financial
       statements of
  the Fund, if available, and a relevant subscription application, all of which must be read in their entirety. No offer to purchase interests will be
       made or
  accepted prior to receipt by an offeree of these documents and the completion off all appropriate documentation. All investors must be
  investors” and “qualified purchasers” as defined in the securities laws of the United States before they can invest in one of the Funds.
  The Fund is a collective investment schemes as defined in the Financial Services and Markets Act 2000 (“FSMA”) of the United Kingdom (the
       “U.K.”), and
  no invitation or inducement to participate in the Fund may be communicated in or into the U.K. otherwise than in accordance with the FSMA.
       The Fund
  has not been authorized or otherwise approved by the U.K. Financial Services Authority and are not recognized schemes (as defined in the
       FSMA). No
  application has been or is intended to be made for an authorization order (as defined in the FSMA) in respect of the Funds. As unregulated
       schemes, they
  accordingly cannot be promoted in the U.K. to the general public. This presentation shall be issued in the U.K. only to persons to whom it may
       lawfully be
  issued or passed on, and then only to restricted categories of recipients, namely investors to whom the Fund can be promoted without
  sections 21(1) or 238(1) of the FSMA. Transmission of this presentation to any other person in the U.K. is unauthorized and m ay contravene
       the FSMA,
Page 16 such person shall be entitled to act upon it.
  and no
  Historical return information is not necessarily indicative of future performance. There can be no assurance that the Funds’ investment

To top