Russian Private Equity landscape W hats today? Money flow cycle - PowerPoint PPT Presentation

Russian Private Equity landscape W hat’s today?

Money flow cycle Money flow cycle Private Money Institutional Investors Banks Pension Funds Private Equity Private Private Projects Equity Funds Public Equity Private Public Investments Equity Funds 2

Global I ndustry Trends Global I ndustry Trends 2006 1999 2001 “I want my bubble back.” “Mom, I am not a billionaire! A billion is like a thousand million. I’m worth a hundred million. A hundred million is just a hundred million.” o Globalization will be defining them e for Private Equity industry in the coming years; o W orld ’ s best m arkets have sim ilar characteristics – stable regulatory environments, liberal policies toward private enterprises, well-funded financial systems; o Private Equity firms will no longer to be able to rely on arbitrage or financial engineering to generate returns. Value creation is a key . Successful firms will be those, who can see value- creating opportunities prior to the transaction and deliver them afterwards. 3

Private equity investm ents as % of Private equity investm ents as % of GDP, 2 0 0 6 GDP, 2 0 0 6 1,44 1,26 1,05 0,61 0,60 0,45 0,45 0,39 0,37 0,34 0,33 0,31 0,28 0,26 0,23 0,21 0,14 0,12 0,11 0,10 0,03 Norway Sweden Netherlands UK Belgium Italy Switzerland Czech Republic Hungary Ireland Spain Denmark Germany Poland Russia Portugal Romania Austria France Finland Greece Source: EVCA/ Thomson Financial / PwC, 2006. � Private equity is still in its infancy in the region. According to various estimates, capital under management of teams in Russia ranges from $8bn to $12bn 4 � Private equity investments in 2006 totaled $1,4bn or 0,14% of Russia’s annual GDP

Russian private equity is sm all but Russian private equity is sm all but grow ing grow ing Moscow TPG, Goldman Sachs, Kiev JP Morgan, Standard Bank Advent Raising dynamics (volume of new PE capital) in Russia 6000 5465 5000 4000 ($ million) 3241 3000 2213 2000 1000 635 500 30 260 205 21 300 0 1994 1995 1996 2000 2001 2002 2004 2005 2006 2007* * Including funds that are being currently raised. 5

Changing sources of return Changing sources of return % of total returns 100% 34% Sales/margin 43% growth 25% Multiple 33% expansion 41% • Future development? Financial 24% • PE investors role? leverage 1986-90 1996-2000 Source: General Partner Survey, Asset Alternatives 6

Adding value is a key Adding value is a key Value from Growth � >25% organic sales growth annually � Maintain or improve EBIT margin � M&A opportunities can bolster growth further Value from Change � Unlock value from change in business organization � Lead transformation work: � Financial management � Decision-making process If PE continues to offer � Legal structure superior governance, we � Human Resources believe it could rival the public market system in size 7

I nvestm ent team I nvestm ent team Fredrik Ekman Ulf Persson Gleb Davidyuk Ben Wilkening Managing Partner Managing Partner Partner Partner Co-Founder Co-Founder Kirill Vesselov Dmitry Fedoseev Ahmadishin Evgeny Investment Manager Investment Manager Investment Manager Vladimir Zaluzhsky Tatiana Gerastovskaya 8 PR and IR Manager Financial Controller

Selected I nvestors Selected I nvestors Structure of capital Institutional 30% Private 70% Geography of capital World 10% 9 Scandinavia 90%

Progress in capital under Progress in capital under m anagem ent m anagem ent Funds’ development Mint III $300 – 400m Mint II $130m Mint I $21m 5 2 1 1 4 1 2 1 5 2001 02 03 04 2005 06 07 08 Fall 08 Mint III fundraising 1 0

Our Portfolio Our Portfolio More then 70 Mio SUD invested 1 1

PR & Marketing PR & Marketing PR tool Investors Entrepreneurs Regulators General public Website Business & specialized Media Conferences Industry associations The Result: � Mint Capital is number 2-3 most quoted private equity fund in the Russian media � 2-3 business plans received a week, as compared to 1-2 per month in 2006 � Regular applications from major LPs for possible investing in Mint III � 10-fold increase in the number of website visitors � Management speaking for free at ~10 industry events a year 1 2