Goldman Sachs, VTB Capital Buy Half of Russian Gym Chain

Goldman Sachs Group Inc. (G) and VTB Capital bought a 50 percent stake in Russian Fitness Group for an undisclosed amount to invest in the country’s growing enthusiasm for working out.

Goldman Sachs, a minority investor since 2006, will “substantially” increase its holding with the deal, managing director Anton Schreider said in an an e-mailed statement today.

The transaction is “a further demonstration of Goldman Sachs’s long-term commitment to investing in Russia as well as our flexible investment mandate allowing us to back strong local businesses over extended time horizons,” Schreider said.

Russian Fitness Group, which runs the World Class and FizKult chains, has grown to 60 clubs in 22 cities in 21 years. The clubs have 109,000 members with 2,700 training and administrative staff, according to its website. Pop star Madonna came to Moscow in 2012 to open a branch of her Hard Candy fitness clubs near the Kremlin.

Olga Sloutsker, president of World Class and a former Russian fencing champion, said the company plans to open nine more clubs this year in Russia and the Commonwealth of Independent States. Sloutsker, the chain’s founder, will remain with the company, according to the statement.

Goldman Sachs, based in New York, said in 2011 it has made more direct investments in closely held Russian businesses than any foreign bank, buying stakes in 15 companies totaling more than $1 billion since 2007.

One of those was lender Tinkoff Credit Systems, which did an initial public offering in London last year. Goldman helped to organize the October IPO and raised $226 million from selling stock, cashing out almost two-thirds of its stake.

To contact the reporter on this story: Jason Corcoran in Moscow at jcorcoran13@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net

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