VTB Group shall participate in creating a closed unit investment trust in real estate to be named “Developing the Russian South”. The funds of the newly created trust will be invested in the economic development of the region.
Major objectives in creating the Trust are as follows: to build an instrument of investment development of the South federal constituency; to get investment into the Russian South much more lucrative; and to develop the region through the private and state partnership in implementing investment projects.
The Trust management will be performed by OJSC «General Management Company”, which succeeded in attracted a dedicated team of real estate specialists. VTB Group is a member of the Company.
In line with the world practice and also in order to ensure efficient management and risk mitigation, an Investment Committee is to be established within the Management Company’s structure. Aleksandr Shokhin, President of the Russian Union of Industrialists and Entrepreneurs, shall run the Committee, its major assignment will be to make investment decisions to purchase and dispose the funds of the Trust.
Basically, the Trust is designed to make investment into development projects. Its prospective portfolio will include development of commercial real estate – 60%, and housing real estate – 40%. Priority regions for project implementation are Astrakhanskaya oblast, Stavropolsky and Krasnodarsky krai, Rostovskaya oblast, and the North Caucasian republics.
Uralsib Bank and MDM Bank are co-investors of the Trust.
For reference: The total volume of the Closed Unit Investment Trust “Developing the Russian South” amounts to RUR 1.3 billion, with VTB Group investment accounting for RUR 520 million.
The Trust is established for 15 years.
Its annual efficiency is expected at 25%.
Deadline for creating the Trust is 19.12.2007.