P.E. Chieftans Remain On Russian Fund Board

Aug 4 2014 | 10:16am ET

A half-dozen private-equity titans aren’t letting international sanctions against Russia deter them from maintaining at least one tie with the country.

The heads of Apollo Global Management, Blackstone Group and TPG Capital remain on the advisory board of the Russian Direct Investment Fund, which is owned by Russia. In addition to Leon Black, Stephen Schwarzman and David Bonderman, the RDIF also continues to boast the presence of Permira’s Kurt Bjorkland, Apax Partners’ Martin Halusa and Warburg Pincus’ Joseph Schull.

The U.S. and European Union began imposing sanctions on Russia following it’s annexation of the Ukraine’s Crimea region earlier this year. Those measures got additional teeth last week following the downing of a passenger airliner over the Ukraine last month, reportedly shot out of the sky by Russian-backed rebels in the eastern Ukraine.

The RDIF, like Russia itself, has dismissed the impact of the new sanctions, which bar U.S. and EU firms from some financing of some Russian companies.

“The sectoral sanctions imposed against certain Russian companies and their subsidiaries affect only specific transactions which relate to long-term financing of these companies by U.S. and European entities,” the RDIF said. “RDIF does not directly attract equity or debt financing but instead invests only its own funds together with co-investors.”

While the sanctions may not affect the RDIF, they have certainly put the screws to alternative investments honchos. Many on Wall Street skipped a prominent economic conference in Russia earlier this year after pressure from the State Department, and risk angering U.S. officials by continuing to serve on boards such as the RDIF one. But they also risk earning the ire of the Russian regime and President Vladimir Putin if they resign, imperiling their own investments in Russia and the relationships they’ve built in the country.


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