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MoneyTree. Venture Capital Market Navigator

1 March 2017
MoneyTreeTM: Навигатор венчурного рынка
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The venture capital market, which forms the basis of the venture capital ecosystem, reached $243.7 million in 2017, compared with $165.2 million a year earlier. This indicates an increase in investment activity. The number of transactions has increased, and the average transaction size has grown to $1.5 million ($1.1 million in 2016).

The IT sector remains the leader in the number of venture capital deals and the volume of attracted investments. The average size of transactions at the start-up stage has increased from $0.56 to $0.83 million.

The number of investors’ withdrawals in 2017 has significantly decreased (15 transactions against 30 in 2016). The total cost of withdrawals has also decreased to $79.9 million, compared with $120 million in 2016. At the same time, the total value of all withdrawals in the first six months of 2018 ($68.5 million) is comparable with the sum for the whole 2017.

According to the data for the first half of 2018, the total volume of the venture capital market is $200 million. Such dynamics suggest a further rise in investors’ activity.

Russian venture funds demonstrate high involvement in the global venture capital system. For the last few years, the venture capital market has been steadily growing. On the whole, the publication demonstrates that the macroeconomic conditions are improving and that the investors’ attitude towards venture assets is clearly positive. Also, it shows a recovery in demand for venture capital companies at all stages of the investment cycle.

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26 September 2019
Structured Notes: Criteria For Retail Investors
The placement of SNs under the Russian law can be incentivized by the introduction of access criteria for non-qualified investors. Federal Law 75-FZ introducing SNs in the Russian securities market entered into force in October 2018. The SNs novelty rests in that under certain circumstances, specified in issue documents, their issuer is allowed to pay the note holders less than the face value of the notes. Those circumstances include a range of triggers, such as changes in the costs of goods and securities, currency exchange rate, interest rates, official statistic data, inflation rate, etc. Circumstances determining the payments to note holders also include the default by corporate, sovereign and municipal entities (reference entities), which laid the groundwork for the issuance of Russian CLNs.

So far, there have been no SN offerings under the new law. Structured products (including those originated in overseas jurisdictions) were available to Russian investors previously. The notion of a ‘structured instrument’ is broader than that of a ’structured note’. Structured products include not only instruments that do not guarantee the face value of a note, but also those that protect the investors’ capital against loss (the so-called investment bonds). The latter entitle their holders to claim from the issuers the repayment of their face amount, a minimal fixed-rate coupon and additional sums (depending, e.g., on prices for some assets. Typical examples of these products are deposits and bonds whose issuer has a sovereign-grade rating, which also contain a derivative component (a put option on some asset).The embedded derivative component allows a higher yield, while the interest income on the note ensures the repayment of the face amount.

On June 30, 2019, there were 168 structured instruments issued by Russian market participants, including capital-protected products, , equivalent to around $2.15 billion, of which 109 issues ($90.366m) were denominated in rubles, 52 ($654.7m) in US dollars, and 7 ($71.6m) in euro.
30 August 2019
World Investment Report 2019: Special Economic Zones

The World Investment Report prepared by the United Nations Conference on Trade and Development (UNCTAD) studies the latest global and regional trends in and prospects for foreign direct investment, reviews recent investment policy developments, and provides a detailed analysis of special economic zones worldwide, addressing existing constraints on their development.