Challenges and growth drivers for private equity in Russia were discussed at the 2nd Securities Market Forum.

On November 18 in Moscow, as part of the 2nd Securities Market Forum, ACRA held a session titled “From early rounds to the public market: PE&VC as a driver of the development of the Russian financial market,” moderated by KAMA FLOW partner Pavel Okhonin.

The discussion featured Artem Zheleznov, Managing Director for Strategy and International Presence at Moscow Exchange; Yulia Kim, Managing Partner at Polaris Capital; Artur Zagvozkin, Partner at Brio Capital; Nikolay Makarov, Head of Private Equity at Pervaya Asset Management; and Yuri Popov, CEO of Potok.Holding.

Experts discussed the barriers impeding the development of PE in Russia, sources of long-term capital, how to increase the investment appeal of technology businesses, and how to build an ecosystem enabling companies to progress from startup to IPO on the domestic market. According to the session moderator, Pavel Okhonin, although private equity’s share in Russia’s economy is critically smaller than in several other major countries, its growth potential remains significant: “Today there is less than one ruble of PE investment for every one thousand rubles of GDP. Our challenge is not only to catch up, but to improve quality: to build trust and attract long-term capital. A positive sign is that private investors are entering the market more actively, and their involvement is becoming one of the drivers of further growth and the formation of a mature private equity industry in Russia.”

In the speakers’ view, an inflow of retail capital could become a catalyst for the development of the PE industry, increasing competition among funds and spurring the creation of new investment instruments. Other drivers highlighted included the growing maturity of professional industry players, the development of infrastructure for collective investments, improvements in regulation, and clear and effective exit mechanisms—from secondary transactions to IPOs. All of this will help create a sustainable ecosystem that supports the growth of new companies and expands opportunities for investors in the Russian market.