russia

Leading Private Equity House Set to Avoid Russia

by

March 11, 2014

Private equity (PE) firm The Jordan Company (TJC) is set to close its latest fund in April 2014. The fund is likely to close having raised approximately $3.1billion for investment. This fund is TJC’s third, and the figure raised is less than their second fundraising effort, which brought in $3.6billion in 2007.
Although TJC would have hoped to have beaten their pre-recession fundraiser – which is the benchmark many PE houses have set for themselves with their current funding rounds – in percentage terms they are still a lot closer to their pre-recession levels than many other PE firms are.

 

 

TJC, which is headquartered from New York City and Chicago, is famous for its commitment to overseas investments, particularly in the BRIC group of nations. However, the New York Post reports that the company is set to turn its back on Russia as a PE investment destination, despite having great success there in the past. Russia is also becoming a bigger target for prominent PE houses across the world, even despite the current political situation in the country. TJC’s Jay Jordan told The Post his views on Russia, succinctly saying, “Don’t even go near it…We got out in 2006. Russia’s not a place to put in any money now.”

 

Jordan cited the dishonesty of what he called a “very corrupt culture,” indicating that he didn’t envisage the situation changing or improving anytime soon. In contrast, Jordan said China was less dishonest and indicated that TJC would be continuing to make substantial PE investments in the nation.

 

Given that many PE firms are starting to turn away from the Far East and look elsewhere, such as to Russia, TJC could well be in a great position to capitalise, as the markets will be much less competitive and easier to penetrate as a result, giving TJC much greater flexibility and potential profitability from their activities. TJC would not comment to The Post on their fundraising activities, so look out for the closing fundraising figure come April.

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