BlackRock Acquires Moscow Exchange Stake From Kremlin Fund

BlackRock Inc. (BLK), the world’s biggest asset manager, bought shares in the Moscow Exchange (INDEXCF) from the Russia Direct Investment Fund before the bourse’s planned initial public offering, the Kremlin-backed fund said.

RDIF had a 2.7 percent holding in the bourse, after boosting its stake in July. The Russian private-equity fund isn’t disclosing the size of the stake it sold or the price, Quinn Martin, a spokesman, said by e-mail.

BlackRock, Goldman Sachs Group Inc. (GS) and Templeton Asset Management Ltd. signed an accord with RDIF on June 21 to invest in Russian companies preparing for initial public offerings. The Moscow Exchange plans to sell shares next year, Ruben Aganbegyan, then the president of the bourse, said in an April 17 interview in New York.

“It’s not a very large investment, it’s more the fact that BlackRock is participating,” Kirill Dmitriev, RDIF’s chief executive officer, said by phone today.

RDIF may bring one more investor into the Moscow Exchange, Dmitriev said. The pre-IPO group is looking to invest in companies outside the oil and gas industries in Russia, Dmitriev said.

In July, RDIF teamed up with Cartesian Capital Group LLC to buy shares in the Moscow Exchange, which manages the benchmark Micex Index. The deal was Cartesian’s first in a Russian company. The whole bourse was valued at about 129 billion rubles ($4.2 billion), Tatyana Elizarova, an analyst at IFC Metropol, said at the time.

‘Market Window’

The fund raised its stake in the Moscow Exchange to 2.7 percent in that transaction, having acquired 1.25 percent in January in a joint deal with the European Bank for Reconstruction and Development, which bought 6.29 percent.

“BlackRock is a smart fund with a great reputation,” Roland Nash, chief investment strategist at Moscow-based Verno Capital, which manages $200 million in Russian equities, said by phone. “It’s going to be very good for the Micex and the Russian market in general.”

The Moscow Exchange’s shareholders include Russia’s central bank and OAO Sberbank, the nation’s biggest lender, according to data on the exchange’s website.

Aganbegyan, who was leading the exchange’s IPO plans, left this month to head Moscow-based Otkritie Financial Corp. The bourse plans to seek more than $1 billion in the IPO next year, “when a market window is there,” he said in April.

The Moscow bourse was created when the Micex Stock Exchange merged with the RTS Exchange in December, and offers stock, bond, currency and futures trading.

The Kremlin established RDIF in 2011 to help lure foreign investment as the government tries to wean the world’s largest energy exporter off its dependence on commodity sales.

To contact the reporter on this story: Ksenia Galouchko in Moscow at kgalouchko1@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net

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