Medvedev finalising investment fund project: report

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Russian President Dmitry Medvedev was on Monday set to chair a meeting to hammer out details of a key joint investment fund in a bid to bring new foreign capital to the country, a newspaper said.

The Kremlin chief, who seeks to wean his country's hydrocarbon-dependent economy off oil and gas, last year vowed to create a "special sovereign fund" that could help boost his economic modernisation effort and make Moscow into a global financial centre.

Citing unidentified government and Kremlin officials, the Vedomosti financial daily said there was still no agreement in the government regarding the size and type of the fund and that Monday's meeting was expected to bring clarity on the issue.

The ministry of economic development proposes to set up a $10 billion fund, while the finance ministry agrees to invest no more than $1 billion, the report said, adding that a third, compromise option supported by the finance ministry foresees a gradual increase in capitalisation.

There is also no agreement on the form of the investment vehicle, with officials said can either be a joint stock company or a closed-end mutual investment fund, the report said.

The Financial Times reported earlier this month the Russian government was seeking to set up a $10 billion fund to co-invest with private equity firms and that Goldman Sachs had been asked to informally guide the project.

Citing analysts, Vedomosti said that a $1 billion fund would not be big enough to attract serious investors.

© 2011 AFP

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