Investment Strategy

Sistema's investments are targeted at new industries and advanced technologies as well as consolidation and modernization of traditional sectors of economy through innovations. The Corporation develops its portfolio businesses by means of its multi-industry expertise, efficient asset strategy and capital management.

Focus on investment
into a promising technology sector

Access to unique investment opportunities in the most attractive sectors of the Russian economy

Attracting external capital under management to expand the investment resource

Profitability Maximization (TSR) and Reduction of Capitalization Discount to Net Asset Value (NAV)

Value creation model

Market analysis and search for investment opportunities

Multi-industry expertise

In-depth analysis of financial and non-financial risks and opportunities

Increasing the value of assets under management

Organising effective management of the acquired assets.

Formulating a development strategy.

Enhancing business efficiency.

Building synergies with other companies of the Group.

Introducing new technologies and digital solutions.

Monetisation

Generating income from dividends, sale of assets or their stakes.

Allocation of capital

Distribution of dividends among shareholders. Investment in new projects and development of existing assets.

Asset Management

A partnership model allows the key managers of the Corporation to share the risks and returns from investment with the shareholders.

Sistema's Managing Partners are in charge of implementing investment strategy at portfolio companies and supervising asset management through the boards of directors of respective companies.

Managing Partners are responsible for:

Composition and activity of the boards of directors, recruitment of CEO and senior executives for assets under management.
Attracting investors and strategic partners for portfolio companies.
Exploring new investment opportunities.
Creating assets value and monetisation of investments.

Investment Process

Managing Partners

Initiation and elaboration of investment project.

Strategy & Development Department

Initial assessment of the project for matching with investment criteria.

Expert Council

Preliminary approval of the investment idea and recommendations for finalizing the project.

Science & Technology Council

Deep expertise on tech and innovative projects with a high scientific capacity.

Finance & Investment Committee

Step 1. Project approval with the development of business plan, financial model and KPIs, setting timelines and preliminary terms and conditions.
Step 2. Approval of a transaction and its final terms and conditions.
Each step requires approvals from the Strategy and Development, Finance, Corporate Governance and Legal Departments.

Management Board

Final approval of the project.

Depending on the transaction materiality, a decision of the Board of Directors or the General Meeting of Shareholders may be required.

Board of Directors

Approval of major transactions involving assets valued from 25 % to 50 % or potential divestment of real estate with total value exceeding 10 % of the book value of the Corporation's assets.

Meeting of Shareholders

Approval of major transactions, the total amount or price/ book value of assets acquired or divested as a result of the transaction exceeds 50% of the book value of the Corporation's assets.

Sistema's Investments

All assets

Current investments

Sistema invests in the controlling stakes of large assets, including companies with value growth potential exceeding USD 1 bn. The Corporation creates value via active management of acquired assets with potential engagement of a financial partner.

Deal size starting from USD 100 mn; stake from 50 % + 1; required IRR > 25 % in RUB.

The Corporation acquires assets with acceptable debt levels (Debt /OIBDA of the acquired asset <3.0x) or with a higher debt level subject to availability of a 2-year debt reduction plan.

Sectors

No restrictions, but in the order of priority: consumer market, B2B segment with export potential, and real estate.

telecommunications

MTS

49.94 %

Sistema’s effective stake

534.4 bn ₽

revenue in 2021

> 88 mn

mobile subscribers

Agriculture

STEPPE Agroholding

89.7 %

Sistema's effective stake

57.2 bn ₽

revenue in 2021

578 thsd hа

land bank

Medicine

Medsi

95.5 %

Sistema’s effective stake

30.1 bn ₽

revenue in 2021

10.1 mn

annual patient visits

Pharmaceutical industry

Binnopharm Group

72.2 %

Sistema's effective stake

25.5 bn ₽

revenue in 2021

5 plants

productive capacity

New Investments

Investments in technologies of the future

Venture investments

Investments via venture funds under Sistema’s management with mandatory engagement of external investors (the stake of financial partners is at least 20 %). Monetisation via closing funds.

Investments in major IT companies

Direct investments in large stakes in IT companies beyond the Sistema’s venture funds’ mandate, offering an opportunity to create a business valued over USD 1 bn and prospective monetisation in 5-7 years.

Sectors

Software development, e-commerce, Internet companies, IoT, virtual assistants, machine learning and neural networks, cyber security, MedTech, AR/VR, etc.

Investments in traditional industries

Mature undervalued assets

Investments in significant or controlling stakes of big assets on attractive markets in Russia — acquisition with a significant discount to the market value with an opportunity of quickly reducing the discount and exit within 2-3 years.

Growing assets

Acquisition of promising players in growing segments, creating value through the market consolidation and using the economy of scale with the prospect of exiting the asset within 4-5 years via sale to a strategic investor or IPO.

Sectors

Markets worth at least USD 1 bn with high growth rates, import substitution capacity and strong export prospects.

Investing and creating value

Sistema is permanently looking for new ideas to invest with a strong focus on increasing the value of acquired assets. The Corporation is always open to consider potential investment projects and to become a reliable partner for your business.

Consolidated revenue, bn ₽