The state begins to invest in venture projects

high tech

As Kommersant has learned, a state venture fund is being created in Russia, which will invest budget funds in projects of Russian IT companies. The estimated cost of the fund is $100 million. Market experts admit that its creation will have a positive impact on the development of Russian IT business, but they question the viability of the very idea that the Russian state apparatus will create and effectively manage a venture fund.

At the end of June, President Vladimir Putin gave the government an order to create a specialized organization - the Russian Investment Fund for Technology and Innovation, and in fact, a state venture fund. The preparation of the project was entrusted to the Ministry of Information Communications, the Ministry of Finance and the Ministry of Economic Development of the Russian Federation. The Russian Investment Fund for Technology and Innovation (this is the working title of the project) is being created on the initiative of the Ministry of Information and Communications of the Russian Federation, and it is expected that it will begin to function this year. The fund will be an open joint-stock company, 76% of shares of which belong to the state, and 24% to foreign investors. Negotiations regarding the involvement of venture divisions of the world's largest IT companies in the project, according to representatives of the Ministry of Information and Communications, are already underway, but have not yet brought results.

It is noteworthy that at the stage of creating the fund, its further privatization is stipulated. It is planned that by 2008 the state will either completely sell the fund's shares or retain a small stake (about 24% of the shares).

This year's budget will allocate $76 million for the creation of the fund - after the government approves the project, appropriate amendments will be made to the state budget, which will then be sent for consideration by the State Duma of the Russian Federation. Taking into account the funds of potential foreign investors, the initial size of the fund may be $100 million. At the same time, the ministry believes that in three years, due to the sale of fund shares to private investors, its capital will increase to $300-400 million. The authors of the fund idea believe that the size of investments aimed at into the Russian IT business through the fund, in the next three years will amount to $1.2-1.6 billion. “Currently in Russia there are not enough investment resources for the rapid growth of the IT industry,” says Oleg Byakhov, director of the department of strategy for building the information society of the Ministry of Information and Communications.— There is no investment in the early stages of the formation of high-tech companies. Our task is to bring such companies to the point when their products move from the category of innovations to commercial products that are in demand on the market."

Which companies the fund will invest in has not yet been fully determined - government agencies must first agree on investment policy with each other, and then with private shareholders. “For now, we can say that the fund will be interested in companies that develop technologies used in computer, telecommunications and other related industries. Therefore, for example, electronics assemblers are unlikely to be included in the investment portfolio,” one of the project developers told Kommersant. “We intend follow the usual practice of venture funds: take a company worth several hundred thousand dollars and sell the stake when its value reaches several million. In Russia, we have such examples, for example, the manufacturer of text recognition systems ABBYY, the Novosibirsk developer of telecommunications software SW-Soft. a4vision biometric recognition tools. Now their business is already worth tens of millions of dollars, and our task is to find such companies at the stage when they only have promising patents..."

Market participants consider the creation of a fund a logical step. “This is a very interesting idea,” says the head of Sputnik Labs, Kirill Bulgakov. “Such a project is now necessary for companies involved in introducing innovations. The business of companies like ours is very sensitive to such innovations. Just remember the examples of the countries of Southeast Asia and India “There, high-tech projects with the participation of state capital caused the rapid growth of the industry.” Market participants point out that there have already been examples in world practice when state participation in the capital of companies led to significant growth in national IT markets. This was the case, for example, in South Korea, where in the 1960-1980s, diversified holdings were created with the participation of the state, such as, for example, LG and Samsung. High technologies are the most important component of the business of these companies.

At the same time, experts cannot remember successful large-scale projects implemented by Russian venture funds. Therefore, among market participants there are those who are skeptical about the idea of creating a state venture fund. “The state venture fund goes against all global economic practice,” says Alexander Malis, vice-president of Corbina Telecom. “There are state investment funds all over the world - they invest money in projects, the return on which is possible in the long term, which is not attracts private investors. The state, by definition, is an ineffective owner, and in a venture fund, whose activities are associated with many risks, the effectiveness of such management is reduced to zero.”

“State management of venture projects is less effective than private independent management,” says J`Son & Partners analyst Boris Ovchinnikov. “In addition, the transparency of investment decisions, the objectivity of the selection of companies and the disinterest of fund representatives in the distribution of funds are a big question. Control over distributing funds from a state fund will require large costs - they will be higher than in a private fund. Many similar structures operate successfully abroad, but the level of trust of business and society in the state there is immeasurably higher than in Russia."

Russian venture funds operating in the high-tech market note that the organizers of the state fund will face a shortage of managers. “In general, I have a positive assessment of this project, we welcome the creation of such a fund,” says Vladimir Bernshtein, investment director of the Russian Technologies fund. “However, the main thing for a venture fund is to find a competent management company, competent managers who can competently select objects for investments and promote projects that involve many risks. It is no secret that in Russia such specialists can now be counted on one hand.”

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