The Russia-China Investment Fund (RCIF), a private equity fund backed by the Russian Direct Investment Fund and China Investment Corp, will invest more than half a billion dollars on infrastructure, agriculture, technology, and the consumer sector in Russia and China this year, according to a senior company executive.
"The Russia-China Investment Fund has played a crucial role in showcasing that we can make very good returns by working together," Kirill Dmitriev, co-CEO of the Russia-China Investment Fund and CEO of the Russian Direct Investment Fund, the country's sovereign wealth fund, told China Daily.
Established in 2012, the RCIF is a private equity fund into which both China and Russia have committed $1 billion. It has invested in 19 deals in both countries and other nations amounting to more than $5 billion. It has previously owned a stake at Russian children's retailer Detsky Mir and has an internal return rate of up to 90 percent.
The fund's latest investment is in a $1.6 billion partnership with Direct Investment Fund, Vi Holding and Middle Eastern investors to build one of Russia's biggest technology parks at the former Tushino airfield northwest of Moscow. Equity investment will be around $300 million and debt will be a sizable part for funding.
The total area of the project will cover more than 1 million square meters and include office and residential properties. It will also have sports and recreational facilities as well as park zones, according to China Daily.
Russia's state-owned Rostec State Corp, which promotes development, production, and export of advanced industrial products for civil and defence applications, will be a major tenant in the park.
"We will learn from Chinese experience and make it a beautiful technology park," said Dmitriev. "The project will start construction this year and finish within three years."
Hu Bing, co-CEO and president of the RCIF, said as China-Russia ties continue to flourish and cross-border trade expected to grow significantly in the next couple of years, many Chinese businesses and financial institutions are flocking to Russia to bolster economic cooperation.
China is Russia's top trading partner, with bilateral trade reaching $69.5 billion in 2016, a year-on-year increase of 2.2 percent, according to the Ministry of Commerce.
"The Russian real estate market has become very attractive for Chinese investors. We would expect further interest from Chinese investors in the Russian real estate market and the RCIF will continue to play an active role in the sector," Hu said.