WASHINGTON, D.C., July 10 -- The International Finance Corporation (IFC) has signed an agreement for an equity investment of up to US$5 million to establish Sector Capital, an integrated financial company consisting of the Sector Capital Fund and the Sector Capital Development Company. Sector Capital is designed to provide risk equity capital and financial advisory services, both of which are often required to complete transactions in Russia. The Sector Capital Fund will focus on investments in the transport sector with a geographical emphasis on the Russian Far East. The Sector Capital Development Company will manage the fund and provide a broad range of investment banking services including corporate finance, restructuring, and privatization advice. Exclusive of its portfolio management activities, the Sector Capital Fund and the Sector Capital Development Company will have a combined initial capital of approximately US$40 million which includes a US$10 million investment by the European Bank for Reconstruc
tion and Development. The majority of Sector Capital will be owned by a group of private institutional investors, including Sovcap, Inc., a U.S. investment firm; Capital International, a major global funds management firm; and the European Privatization and Investment Company (EPIC), a leading privatization firm in Central Europe. "Sector Capital is expected to be an active participant in the Russian securities market which should help increase the market's liquidity," said Tim Krause, Senior Investment Officer in IFC's Europe Department. "The company is also well-positioned to help Russian companies raise equity capital through privatization advice or assistance with new share issues." Sector Capital will be one of the first financial groups to have an active presence in the Russian Far East. The company is in the process of opening an office in Vladivostok and the Sector Capital Fund's first investment is expected to support the development and activities of Port Vostochny. IFC, a member of the World Bank G
roup, is the largest multilateral source of equity and loan financing for private sector projects in developing and emerging economies.
