Development of venture market in Russia: OJSC RVC and Liniya Prava have completed an investment partnership project
OJSC RVC and Liniya Prava Law Firm have finalised a draft model agreement on an investment partnership to establish a joint investment business in Russia in accordance with the Federal Law No. 335-FZ as of November 28, 2011 "On Investment Partnerships".
Liniya Prava prepared the draft model agreement on the basis of the best foreign investment practices using an "investment partnership" - an instrument new in the Russian market, with direct participation of Russian venture and private equity market experts.
Andrey Vvedenskiy, Director of Infrastructure and Regional Development Department of OJSC RVC, said: "Initially, the investment partnership law was supposed to serve as a flexible instrument for the development of Russian venture and private equity market which could make Russian jurisdiction more attractive and minimise risks. At the moment this type of joint investment is only at its initial development phase and, obviously, to make sector players use it on a full-scale basis it is necessary to go through a lot of stages, both on the practical and institutional side. We are confident that provision of technical materials to the market will become an important step towards a successful development of the legal tool".
The model agreement provides new opportunities for structuring market participants' joint investment activity and contains various options to resolve matters subject to discretionary regulation according to the version of the Federal Law No. 335-FZ "On Investment Partnerships" in effect as of April 25, 2013. Parties to a certain investment partnership agreement can at their own discretion use one of the options provided by the model agreement to establish relationships within the investment partnership, including peculiarities of management bodies formation and income distribution, or to use any other option to formalise relationships according to the requirements of Russian legislation.
Andrey Novakovskiy, Partner in Liniya Prava, noted: "We are happy to contribute to the development of venture and private equity market. We are confident that this scheme will promote the launch of interesting and innovative projects, on one side, and higher fund raising, on the other side, including Western investments in Russia".
OJSC RVC further anticipates making technical experience results and practical solutions in relation to the use of the new legal form available in the course of regular interaction with professional investors and managers.
The draft of the model investment partnership agreement is available at OJSC RVC's website. To access it, please use the following link.
Thereafter Russian Venture Company Seed fund created two new Micro funds - the Softline Seed Fund (SSF) and Fund of High Technologies with legal support of Liniya Prava, based on the investment partnership contract. Currently OJSC RUSNANO is developing an investment partnership along with transfering it an investment project portfolio with legal support of Liniya Prava.
About Liniya Prava Law Firm
Having been present in the market for 14 years, Liniya Prava Law Firm is a leading legal consultant on capital markets, corporate law and financial transactions. Clients value Liniya Prava lawyers' expertise in transactions on raising equity and debt capital, securitisation of financial assets, project finance and PPP, commercial, banking and tax law, M&A transactional support, representing clients in courts, law making in financial sector. Liniya Prava's expertise is recommended by international rating agencies, such as Chambers & Partners, Legal 500, IFLR 1000. Liniya Prava has been awarded "Best Legal Advisor in Private Equity Transactions in Russia" for 2012 by Private Equity Russia & CIS Journal and AllEquityFunds, experts in private equity in Russia and CIS.
OJSC RVC is a state fund of funds, a development institute of the Russian Federation and one of the state's key tools in creating a national innovation system. OJSC RVC's charter capital is more than 30 bln. roubles. 100% of RVC's capital is owned by the Russian Federation, represented by the Federal Agency for State Property Management of the Russian Federation (Rosimushchestvo). The total amount of funds formed by OJSC RVC has reached 12, their value is 26,1 bln. roubles. OJSC RVC's participatory interest is more than 16 bln roubles. The number of innovation companies sponsored by RVC has reached 139. The aggregate volume of invested funds is 12,1 bln roubles.
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