OREANDA-NEWS. March 29, 2012. Transcript of the beginning of the meeting:

Vladimir Putin: Mr Dmitriev, the fund has officially started working only recently. It was registered in January, wasn’t it?

Kirill Dmitriev: Yes it was.

Vladimir Putin: You have already concluded deals worth a billion dollars. You're off to a flying start and I’d like to congratulate you on this.

Kirill Dmitriev: Thank you very much, Mr Putin.

Vladimir Putin: What can you say about your cooperation with foreign partners and the relevant funds? Last year we met with their representatives in Moscow. The mood was combative and positive. And, most importantly,how is your business with potential direct investments and potential partners shaping up?

Kirill Dmitriev: Mr Putin, thank you very much for this opportunity to brief you on the initial results of our Fund’s activities following your meeting of May 18, 2011 with investors responsible for managing capital worth more than 2 trillion.

We made strenuous efforts to set up the fund, and, as you have noted, we have already invested a billion dollars, with USD 200 million being our fund’s money and USD 800 million being invested by our partners, our co-investors. It is very important that investors are actively are putting their money in Russia.

Our fund’s main principle is that we invest our money when we receive at least the same amount from our co-investors. This allows us to raise investments for Russia and make good decisions because we make these decisions jointly with our co-investors.

In a very short period of time we have managed to accomplish things that could take years in many countries. We have formed a professional team very quickly. Our Expert Council includes leading international investors, such as the heads of the sovereign funds of China, South Korea and Kuwait and such celebrities of investment business as Leon Black, David Bonderman and Apax CEO Martin Halusa. We don’t pay them anything. Their membership in our council testifies to their interest and trust in Russia. They are happy for example that Russia’s middle class has tripled in the past five years.

We have just visited Russian regions with investors. They are glad to witness the economic growth of the regions and we are actively cooperating with them. Importantly, we have concluded an agreement on investments worth a billion dollars with China’s Investment Fund. Mr Dmitriev (Vnesheconombank Chairman) and I have just visited the Middle East, where one of the leading local sovereign funds wants to invest in all automatic co-investment deals of our fund.

Vladimir Putin:  So, it wants to co-invest with your fund.

Kirill Dmitriev: Yes, and it wants to take part in all our deals and this is unprecedented. For them, for this large sovereign fund, this will be the biggest investment ever.

I’d like to say a few words about our deals. We have made our first investment in the MICEX-RTS stock exchange. We wanted to show that investors have trust in the Russian financial market. We also engaged the European Bank for Reconstruction and Development, our important co-investor, before the stock exchange IPO had taken place. Our second deal was one of the biggest in the energy market. We invested USD 625 million into Enel OGK-5, with USD 140 million coming from us and the rest - from our co-investors. These funds went to Inter RAO UES. They were intended for the development of its investment program. This was an important deal.

Vladimir Putin: How much went into Inter RAO UES?

Kirill Dmitriev: USD 625 million. All money will be used to fund the investment program. The third deal that we have signed as a tentative agreement is also very interesting. This deal is in medicine. We have signed a tentative agreement with the world’s biggest investor in medicine. This fund wants to invest in private medicine in Russia. The entire sum will be spent on developing clinics and upgrading medical services. To sum up, we are operating in many industries and are putting “smart” money in them. This money is invested by people who have a great deal of trust in Russia.

We are also exploring some opportunities abroad because Europe is experiencing a crisis and value of assets plummeted. We are discussing some point strategic investment deals in Europe that may be of interest to Russia strategically, with the United Aircraft Construction Corporation.

To conclude my short report I’d like to say that we are very active and we can see that investors believe in the growth of our economy. They see for themselves that Russia remains stable following the elections. The recent successful elections were very important for them and now they want to invest more and more into our economy.

Vladimir Putin: I’d like to congratulate you again on this flying start. Your fund has invested a lot during the merger of the two stock exchanges and I think now it is time to take the next step. You must work with our business that is planning to undertake IPO to help it to place this IPO on Russian markets.

Kirill Dmitriev: Absolutely. More and more companies we’d like to invest with are planning to float their shares in Russia and they can see opportunities for forming long-term capital here. So, we can really see that our stock exchanges have gone up so much in value because more and more companies will float their shares in Russia.

Vladimir Putin: I have another proposal. As you recalled, last May we all met with the heads of major global investment funds. We must continue our dialogue with them. Please, invite them to such a regular meeting during the Saint Petersburg economic forum.

Kirill Dmitriev: Mr Putin, we will certainly do that. We have already discussed this issue with them. In fact, all of them are ready to come to this forum and would very much like to meet you if you can. For example, Leon Black met with you in Sochi. They have very warm feelings towards Russia and would appreciate this opportunity.