Can you tell us a little bit about yourself and your company?
I am the Managing Director at RB Invest. I lived and worked in the US for 16 years and about three years ago I moved to Russia. RB Invest is part of RMB Group of companies, which includes five separate entities: a commercial bank, a leasing company, a legal company, a factoring company and a private equity real estate firm.
What is RB Invest active in and where is it heading in the future?
We’ve mostly done transactions in retail space through shopping centers in Moscow, St. Petersburg and smaller Russian cities with a population of over 1 million. We are currently managing a portfolio of about US $500 million and we are active in core assets, namely buildings that are operational.
For the future, we are planning to become a US $1 billion portfolio asset management company. Hopefully, this will happen by the end of next year or the year after. In our strategy as an active investor we buy properties, we use our own management company to increase the cash flow and then we sell. We expect 25% IRR or greater in return. So far we have done much better than that.
Why have you chosen retail?
When we started off, we looked at all market segments. We started by trying out different options and by looking at the market trends and so we identified that retail is the world we want to be in. We mainly do retail investments because we think it’s a good idea for Russia at this point in time. The yields are high and we have easy access to money for leverage. In terms of transactions, we do 30% with equity and 70% with financing from banks, which are mostly Russian. We are currently getting financing from the state banks such as Sberbank.
We also work closely with Alfa Bank, which is a private Russian bank. They have the best rates on the market and a long amortization schedule, which are really favorable terms for us to purchase core assets. Good rates in the market considering the difference between Moscow and outside Moscow would be around 8% in US dollars and around 10% in rubles.
Are you planning to go public or you prefer to stay a private company?
No, it’s a Russian story. We’re not planning to go abroad, as we think Russia is the place to be. We are also not planning to do any IPOs at this point. However, we are open to foreign investors or other companies to partner with. Our bank has done a lot of business with foreign banks and we have foreign clients as well.