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Korean and Arab Funds likely to Invest in Russian Banks

According to a report carried Monday by the Kommersant business daily, the Abu Dhabi Investment Authority may invest $100 million in Russian regional banks through a fund set up by the International Finance Corp. and VEB, Russia’s state-run development bank.

Investment funds from South Korea have also expressed interest in the fund, which may invest as much as $1 billion, the newspaper reported, citing documents prepared for VEB’s supervisory board. No date has been set for the board’s next meeting, Kommersant said.

Established in 1976, the Abu Dhabi Investment Authority (ADIA) is a globally diversified investment institution that is wholly owned by the Government of Abu Dhabi.

ADIA manages a substantial global investment portfolio, which is highly diversified across more than two-dozen asset classes and sub-categories, including quoted equities, fixed income, real estate, private equity, alternatives and infrastructure.

ADIA has been established for over 30 years, prudently investing the assets of the Emirate of Abu Dhabi through an investment strategy focused on long-term value creation. Throughout this time ADIA has built a strong reputation across global markets as a trusted and responsible investment partner.

ADIA's mission is to invest funds on behalf of the Government of the Emirate of Abu Dhabi to make available the necessary financial resources to secure and maintain the future welfare of the Emirate. The Russian foray is in line with this objective.

Vnesheconombank (VEB) is a Russian, and former Soviet, bank commonly called the Russian Development Bank, although it refers to itself as "the state corporation Bank for Development and Foreign Economic Affairs”.

The institution is used by the Russian government to support and develop the Russian economy, to manage Russian state debts and pension funds. It is a part in the government’s plan to diversify the Russian economy, and to do so receives funds directly from the state budget.

The bank recently went into an agreement to set up a joint fund to invest in the country with the IFC. IFC's 182 member countries provide its authorized share capital of $2.4 billion, collectively determine its policies, and approve investments.

IFC fosters sustainable economic growth in developing countries by financing private sector investment, mobilizing capital in the international financial markets, and providing advisory services to businesses and governments.

IFC invests in enterprises majority-owned by the private sector throughout most developing countries in the world.

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