(June 5, 2012) — The CEOs of the Russian Direct Investment Fund (RDIF) and China Investment Corporation (CIC) have signed an agreement pledging to form a joint investment fund comprised of $1 billion from each sovereign wealth fund and as much as $2 billion from third-party investors.
“This visit is really key to establish a breakthrough in Russia-China relationships,” Kirill Dmitriev, CEO of the RDIF, said in an interview with Reuters. He also indicated that the fund would predominately invest in Russia.
“In the past there were lots of discussions on the topic but very little progress—the amount of Chinese investment in direct equity [in Russia] is very small. But [now] there are some concrete examples,” continued Dmitriev.
Lou Jiwei, chairman and CEO of the CIC, and Dimitriev signed a memorandum on June 5 that signified “the full launch of the joint fund,” according to a statement released by the CIC. The statement also added that the Russia-China Investment Fund would function as a limited partnership and operate “on a commercial basis.”
The fund’s first investment will be a $200 million minority stake in a Russian forestry company, Reuters has reported.