For the first time since the crisis, the bank invests in a Russian non-state pension fund

The European Bank for Reconstruction and Development (EBRD) may become one of the largest Western investors in the Russian pension system. The bank is considering the issue of entering the capital of the European Pension Fund, which last year began operating in the compulsory pension insurance (OPI) market. If such a decision is made, this will be the EBRD's first post-crisis project in the pension market. However, investments in the pension business in Russia are associated with high risks that are of a political nature, experts warn.

On Friday, the EBRD published a message that the board of directors of the bank on July 26 will consider the issue of entering the capital of the NPF European Pension Fund. It is planned that the EBRD will be able to obtain up to 30% in a holding company registered in Cyprus, which manages the NPF. In the future, this share may be increased. An EBRD representative could not be reached over the weekend. As Yevgeny Yakushev, chairman of the board of the European Pension Fund, explained to Kommersant, the NPF has long been negotiating with Western institutional investors about joining the fund's capital, "with the EBRD being the priority party for cooperation."

NPF "European Pension Fund" received a license in 2010; before that the fund was called "Pension Fund". The change of license occurred after the owners of the fund changed, which became the Alpinvest Holding company. In May, the board of trustees of the European Pension Fund was headed by Ryckman Groeninck, former chairman of the board of ABN Amro Holding. As of April 1, 2011, the fund occupied 123rd place in the list of the largest Russian non-state pension funds in terms of the volume of its own property (RUB 150.7 million).

Investments in the European Pension Fund are not the EBRD's first investment in the Russian pension market. In the summer of 2008, he co-founded the NPF Renaissance Life and Pensions, in which he owns 30%, the remaining 70% belongs to the Renaissance Life insurance company, part of the Sputnik investment group of Boris Jordan. It was investments in this project that showed the EBRD the promise of the pension business, market participants believe. "Renaissance Life and Pensions", having started working in the compulsory pension insurance market in 2008, is today one of the most dynamically developing non-state pension funds. Thus, at the end of 2010, the increase in pension savings (funds raised within the framework of mandatory pension insurance) in the fund amounted to 706.2%. To date, Renaissance Life and Pensions has accumulated 7.1 billion rubles. pension savings (10th place), and the number of its clients is 410.9 thousand people.

The EBRD has not yet disclosed the volume of investments that can be directed towards the development of the European Pension Fund. Earlier in an interview with Kommersant, Mr. Jordan said that the Sputnik group, together with the EBRD, invested more than $100 million in the pension business (see Kommersant of June 17). In February, it was announced that the EBRD would allocate an additional $40 million for the development of the fund.

If the deal for the EBRD to enter the capital of the European Pension Fund takes place, first of all it will be beneficial for the Russian partners of the project, says Vadim Soskov, general director of the capital management company. “NPFs with foreign participation are always treated more favorably by Western companies operating in Russia, which means that the fund will have a competitive advantage when servicing corporate pension programs in such companies,” he says. At the same time, for the EBRD itself, investments in the Russian pension system can still be called venture capital, since there will be no immediate return on them. According to market participants, NPFs, with proper management, can reach self-sufficiency in at least seven years. “A long return on investment is associated with increased risks that are of a political nature. We are talking about a discussion regarding the future of the savings component, which is the main source of development of non-state pension funds,” says Mr. Soskov. Recently, representatives of the Ministry of Health and Social Development, one of the regulators in the pension market, have repeatedly made proposals on the need to reform the funded component, in particular the abolition of its mandatory nature.

Alexander Mazunin

EBRD thinking about pensions