RussianArmenian Venture Capital Fund

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(No Transcript)
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Russian-ArmenianVenture Capital Fund
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Fund Concept

• Russian-Armenian Venture Capital Fund is being
  established as an initiative of Russian and
  Armenian government Commission for economic
  cooperation between Russia and Armenia
• Armenian government is attracting investments in
  the country via venture funds and free economic
  zones including those focused on innovations
• Russian-Armenian Venture Capital Fund will be
  funded by Armenian governmental development
  institutions, international finance organizations
  and private investors
• Prospective anchor investor Russian company
  SITRONICS intends to co-invest into the Fund as
  well as to render part of its RAO MARS site to
  high tech companies their production facilities
  and may acquire successful companies eventually
  at exit stages
• Armenian government intends to grant special
  economic zone status to RAO MARS site
• Russian-Armenian Venture Fund will invest into
  Armenian and Russian companies that run
  innovative business within the generic framework
  of priority lines for technology development of
  both countries and are interested to establish
  production in Armenia
• The Fund will also invest into foreign companies
  that are seeking venture financing and are
  willing to bring their technologies to Armenia
  and place manufacturing facilities for high tech
  products in Armenia thus establishing high tech
  business in Armenia

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Fund Concept (contd)

• The size of the Fund is expected to be 70-80
  million and will be formed in two stages
• The first closing of the Fund will be done at
  40M level. SITRONICS and Armenian government
  intend to become anchor investors, and
  international finance organizations are expected
  to join and co-invest at this first stage as its
  extremely difficult to commit private investor
  money for the first closing of the Fund in
  current economic environment. However prospective
  Fund managers will use best efforts to attract
  interested specific groups of private investors,
  particularly international Armenian diaspora at
  this stage too
• The Fund managers will allow 12-18 months for the
  second closing of the Fund, and at this stage
  Fund size is expected to reach 70-80M, and
  prospective Fund managers expect to commit other
  investors including but not limited to
• governmental high tech investors and fund of
  funds like Russian Corporation Rosnanotech,
  Russian Venture Company and others
• international finance organizations like EBRD,
  IFC and others
• private investors from Russia, Armenia and other
  countries
• Prospective Fund managers will seek co-investors
  particularly international venture funds to
  co-invest on the deal level, especially when
  foreign innovative companies will plan to place
  production facilities and establish high tech
  business in Armenia

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Fund Strategy

• Maximum potential is in technologies of
  overlapping areas
• Alternative energy sources
• Energy efficiency
• Environmentally friendly manufacturing processes
  - raw materials, fuel and water processing
• New materials
• Nanotechnology
• IT

• Priority science technology development lines
• Security and counterterrorism
• Life sciences
• Nano systems and new materials
• Information and telecommunication systems
• Environment conservation
• Transport, air and space systems
• Energy and power saving

Energy saving
!
Environment
New materials
protection
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Fund Management Team
Boris MislavskyManaging General Partner
Sergei BubnovManaging General Partner

• More than 15 years in banking investments
• Managing director for alternative investments at
  Renaissance Investment Management
• Portfolio Manager for RenShares Utilities Fund
  (offshore closed end fund investing into CIS
  energy companies)
• Invested in companies developing Russian-origin
  technologies on international markets in the
  frame of establishing venture capital fund
  Islands of Excellence
• Principal banker with the Power Energy
  Utilities Dept of the European Bank of
  Reconstruction and Development in London
• VP Emerging Markets Equity Research Dept of
  Merrill Lynch in London
• VP Equity Research Dept of Credit Suisse First
  Boston
• CFA, 1998
• MBA/Chicago University
• Moscow University for Foreign Affairs

• More than 25-year long experience in high-tech
  industry
• Lead venture investments at Renaissance
  Investment Management
• Established small technology companies in early
  1990th
• Over ten years with General Electric,
  established large engineering and technology
  center for GE in Russia
• Commercialized Russian-origin technologies in
  America, Europe and Asia
• Invested in companies developing Russian-origin
  technologies on international markets in the
  frame of establishing venture capital fund
  Islands of Excellence
• Established and developed Russian high-tech
  company and built its presence in international
  markets
• 6 patents
• PhD
• Moscow State University

Principals worked together to establish venture
capital fund and to invest into high tech
companies
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Fund Management Team

• Unique combination of experienced principals
• Building effective business with high ethical
  standards
• High tech innovative projects management
• Finding prospective technologies and hi-tech
  companies
• Long time experience in technology due diligence
  and business technical teams competence check
• IP protection management
• Development of strategic plans for company growth
• Management for on time on budget execution
• Six Sigma quality methodology
• Negotiation skills and experience in licensing
  technologies and buy/sell of high tech companies

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Fund Prospective Advisers Partners
Oleg FavorskyRussian Academy of Science
Sarah CareySquire, Sanders Dempsey LLP
Tony AmorPulsar Energy Capital LLP

• UK-based Investment Fund

• More than 35 years in international energy
  business
• Managing partner of UK-based Investment Fund
• Headed 270M Fund engaged in development and
  commercialization of new technologies in energy
  industry
• Worked in oil and gas sector of Shell in Europe,
  Australia and Venezuela
• Headed diversified energy and transportation
  company Natomas
• Headed Thermal Power - the most profitable
  geothermal company in the world at that time
• MBA

• Has got 20-year-long experience in Russia and
  region in technology transfer business and
  intellectual property protection
• Senior partner with the global law firm Squire,
  Sanders Dempsey, heads the firm's CIS practice
• Served as a director of two venture capital
  funds with investments in Russia and the CIS
• Bears the global Squire Sanders network
  including operations in Europe, Asia, the United
  States and Latin America, has got extensive
  contacts in both technology and investment
  communities
• Harvard College and Georgetown University Law
  School

• Member of Russian Academy of Science
• More than 50 years in energy industry
• The head of energy section for energy and
  mechanical engineering of Russian Academy of
  Science
• The Chairman of scientific Council for energy
  industry development in Russia
• The Chairman of United scientific Council for
  thermal physics and heat engineering
• over 60 inventions, 6 books, more than 250
  scientific articles

• American venture Capital Fund

• International consulting firm in energy
  energy technologies

• Assistance to start-ups,
• commercialization aid

• American incubator for start-ups from different
  countries

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Fund Investment Policy

• Key selection criteria Team Company
  Technology
• Unique technology with well protected IP, good
  market potential on large existing and rapidly
  growing new markets
• Good standing company with transparent ownership
  structure and finances, with well stated business
  idea, adequate assessment of technical,
  financial, marketing and other risks, realistic
  strategy for high profitability and high return
  on investments, good potential for market cap
  growth
• Solid management team well tuned to collective
  work and partnership with Fund managers for
  implementing growth strategy and building company
  with high market cap

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Fund Investment Policy (contd)

• Existing prototypes
• Established IP protection for technologies and
  products and/or any other means of securing
  competitive advantages
• Transparent financial structure and companys
  ownership allowing for sufficient control for
  investors
• Internal rate of return (IRR) higher than 45 and
  potential for company growth higher than 5 times
• Maximum investments in one industry will not
  exceed 30 of the total Fund size
• Expected time to exit from individual investee
  companies 3-5 years
• Minimum volume of investments into one company
  3M
• Maximum volume of investments into one company
  will not exceed 15 of the Fund size
• Well developed exit strategy for the Fund (MA,
  MBO/MBI, Recapitalization, IPO, etc.)

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Deal Flow Fund Financial Indexes

• Project Sources
• Contacts of Fund managing partners and Fund
  Advisory Board both in Armenia and Russia and
  outside, particularly in US and European high
  tech communities and venture funds
• Community of Armenian high tech companies
• Companies-participants of Innovation Contests
  (Boris Mislavsky, Managing partner has been a
  member of the Russian Innovation Contests expert
  panel from 2001)
• Companies-grantees with various government
  programs to support innovation business such as
  International Science Technology Center (ISTC),
  First/Next Steps to Market of US Civilian
  Research Development Foundation (CRDF),
  European and other programs
• Companies participating venture fairs
• Associations of venture investors and
  business-angels of Armenia and Russia
• Other investment funds and investment companies
  that work mainly with start-ups on pre-seed and
  seed stages in Armenia, Russia, USA and Europe
• Innovation companies from technology incubators
  and technoparks in Armenia and Russia
• Special web-site

• Sample Projects
• Hydrogen sulphide (H2S) conversion by plasma
  technology
• Mobile social network
• Continuous basalt fiber technology products
• Terminal access to remote servers for small and
  medium size businesses
• Triple junction solar cells concentrator PV
  power plant
• Multiphase oil flow meter
• Scintillation and laser single crystals
  production
• Funds financial indexes

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Deal Flow

• Hydrogen sulphide (H2S) conversion
• by plasma technology
• Kintech LLC
• Summary company developed new prospective
  technology for oil refining industry
• Category energy efficiency, environment
  protection
• Innovation developed technology is novel in the
  market oil refineries worldwide use conventional
  steam reforming of methane for hydrogen
  production and Claus-process for hydrogen
  sulphide into commodity sulfur
• Uniqueness technology allows for more efficient
  use of methane in both processes and therefore
  significantly reduces CO2 emissions
• Projects financial indexes

• Continuous basalt fiber technology
• products
• Kamenny vek LLC
• Summary company developed new basalt fiber
  production technology for various markets wind
  energy, construction, automotive industry
• Category nanosystems, material industry
• Innovation developed technology allows for using
  natural basalt as raw materials leading to cost
  reduction and environmental friendliness
• Uniqueness The material shows the best
  price/properties ratio as compared to competitors
  and easy disposal at the end of life cycle
• Projects financial indexes

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Deal Flow (contd)

• Multiphase oil flow meter
• LLC Aktel
• Summary company developed new type of multiphase
  flow meters for oil recovery industry
• Category process efficiency, environment
  protection
• Innovation unique new gages and signal
  processing algorithms allow for real time
  monitoring of oil well output at significantly
  lower cost and with no radioactive components
• Uniqueness new low cost oil flow meter makes it
  cost-efficient to install equipment on every
  individual oil well and thus increase oil well
  efficiency respectively
• Projects financial indexes

• Single crystals production
• technology scintillators
• and laser components
• Summary new low gradient technology of oxide
  single crystals growth
• Category material industry
• Innovation developed technology allows for
  higher quality and better properties, higher
  productivity at lower cost
• Uniqueness These crystals have best
  price-to-quality ratio in comparison with any
  other products available in the market
• Projects financial indexes

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Fund Management Company

• Renaissance Investment Management (RIM) is a
  leading independent investment management company
  established in 2003 as a 100 owned subsidiary of
  the Renaissance Group with offices in Moscow,
  London and Geneva and with presence in Almaty,
  Kiev, Kenya and Dubai
• RIM has grown to over 3.4 billion in assets with
  approximately 150 employees
• A market leader in providing asset and wealth
  management services in high opportunity emerging
  markets
• Largest non-captive asset manager in Russia and
  one of the largest managers of the biggest
  Russian pension fund assets
• Largest non-captive player in the Russian real
  estate market and manages the biggest in Russia
  land fund
• In-depth experience and a track record in
  managing high opportunity emerging markets
• Delivering consistent superior performance by
  employing world-class investment management
  professionals

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Fund Management Company (contd)

• Renaissance Group has now expanded its offerings
  and services throughout the CIS, Africa and
  Middle East and will continue to expand in
  high-opportunity emerging markets throughout the
  world

Moscow
Moscow
London
London
Almaty
Almaty
Kiev
Kiev
Moscow
Geneva
Geneva
London
Kiev
Almaty
Geneva
New York
New York
Cyprus
Cyprus
Nicosia
Dubai
Abuja
Lagos
Lagos
Accra
Lagos
Nairobi
Nairobi
Nairobi
Lusaka
Harare
Johannesburg
Note Renaissance Group has a presence in the
cities shown
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Disclaimer

• DISCLAIMER
• This presentation, furnished on a confidential
  basis to the recipient, is neither an offer to
  sell nor a solicitation of any offer to buy any
  securities, investment product or investment
  advisory services, including any other interests
  in private investment funds (the "Fund") to be
  managed by Renaissance Investment Management
  (UK) Ltd. It is intended exclusively for the use
  of the person to whom it has been delivered by
  Renaissance Investment Management (UK) Ltd, and
  it is not to be reproduced or redistributed to
  any other person without the prior consent of
  Renaissance Investment Management (UK) Ltd.
• A more complete description of the Fund,
  including but not limited to, the risks, fees and
  investment strategies of the Fund is contained in
  the Funds
• information memorandums. Any offering is made
  only pursuant to the relevant information
  memorandum, together with the current financial
  statements of
• the Fund, if available, and a relevant
  subscription application, all of which must be
  read in their entirety. No offer to purchase
  interests will be made or
• accepted prior to receipt by an offeree of these
  documents and the completion off all appropriate
  documentation. All investors must be accredited
• investors and qualified purchasers as defined
  in the securities laws of the United States
  before they can invest in one of the Funds.
• The Fund is a collective investment schemes as
  defined in the Financial Services and Markets Act
  2000 (FSMA) of the United Kingdom (the U.K.),
  and
• no invitation or inducement to participate in the
  Fund may be communicated in or into the U.K.
  otherwise than in accordance with the FSMA. The
  Fund
• has not been authorized or otherwise approved by
  the U.K. Financial Services Authority and are not
  recognized schemes (as defined in the FSMA). No
• application has been or is intended to be made
  for an authorization order (as defined in the
  FSMA) in respect of the Funds. As unregulated
  schemes, they
• accordingly cannot be promoted in the U.K. to the
  general public. This presentation shall be issued
  in the U.K. only to persons to whom it may
  lawfully be
• issued or passed on, and then only to restricted
  categories of recipients, namely investors to
  whom the Fund can be promoted without
  contravening
• sections 21(1) or 238(1) of the FSMA.
  Transmission of this presentation to any other
  person in the U.K. is unauthorized and may
  contravene the FSMA,
• and no such person shall be entitled to act upon
  it.
• Historical return information is not necessarily
  indicative of future performance. There can be no
  assurance that the Funds investment objective
  will be
• achieved and investment results may vary
  substantially over time. Changes in interest
  rates of exchange may fluctuate and investors may
  get back less
• than their investment.
• All statements of opinion and/or belief herein
  and all projections, forecasts or statements
  relating to expectations regarding future events
  or the possible

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