A Russian pre-IPO investor is not buying an equity stake, but merely the expectation of a future IPO.

Private companies in Russia are increasingly testing pre-IPO as a way to raise capital without going public — in 2025, the volume of large placements totaled about RUB 2.5 billion, and in 2026 platforms expect to complete up to 30 such deals, reports Kommersant.

Interest in the instrument is supported by a high key interest rate, which discourages businesses from increasing debt, as well as investor expectations that, as returns on deposits and bonds decline, demand for riskier products will grow.

Pavel Okhonin, partner at investment company KAMA FLOW, outlined the risks of such deals for investors in a column for Kommersant. He emphasized that in Russia, pre-IPO processes do not always lead companies to the stock exchange — this is a feature of the market: “An investor is buying only the expectation of a future IPO. If the offering is postponed or does not happen at all, they effectively remain in a private company with a long exit horizon, limited liquidity, incomplete access to information, and the risk of overvaluation, while part of the potential return is further eroded by intermediary fees.”

Participation of professional private equity funds in such rounds reduces risks, he noted — they conduct deeper due diligence and take part in management.

Read more — at the link.