VTB Capital sells 22.5 per cent stake in Russian Fitness Group
Mubadala-backed consortium acquires stake in Russian fitness chain
A consortium of investors including Abu Dhabi’s state investment vehicle Mubadala Investment Company and Russia’s sovereign wealth fund acquired a 22.5 per cent stake in a Russian fitness firm, they said on Wednesday.
The consortium, comprising several unnamed Middle East funds as well as Mubadala, invested in Russian Fitness Group, which manages the largest chain of fitness clubs in Russia under its "World Class" brand.
The value of the stake acquisition from VTB Capital, a Russian investment bank, was not disclosed. Olga Sloutsker, the founder of the World Class chain, will remain in post under the deal, the parties said.
“The World Class chain is dynamically developing and we, together with our partners, intend to actively contribute to further realisation of the company’s leadership potential,” said Kirill Dmitriev, chief executive of the Russian Direct Investment Fund (RDIF).
The RDIF, Russian’s sovereign wealth fund, was set up by the Russian government in 2011 with an initial $10 billion to make equity investments in high-growth sectors of the Russian economy, including health care, agriculture, energy, logistics and retail.
It has partnered with global investors, including those in the Middle East, to expand its portfolio and has made $40bn of joint venture investments to date. In 2016, RDIF entered into a $2bn joint venture with UAE ports operator DP World to invest in ports, transportation and logistics infrastructure in Russia. The venture was named DP World Russia.
In September, Mubadala Petroleum and RDIF finalised a deal to acquire a 49 per cent stake in an oil venture from Gazprom Neft, marking Mubadala’s entry into Russia.
For RDIF, the investment in Russian Fitness Group (RFG) is part of a strategy to grow the sports industry in Russia and promote wider uptake of sporting activities and physical education. Under the deal, the consortium will work with other foreign shareholders of RFG to support its expansion in Russia, the CIS and Europe.
It is the second sports investment made in partnership with Abu Dhabi’s Mubadala, after the Russia-China Investment Fund, Mubadala and international martial arts league UFC (Ultimate Fighting Championship) set up a joint venture in July aimed at developing and expanding UFC’s mixed martial arts business in Russia and the CIS.
“Through both this project and … UFC Russia, which was established in partnership with Mubadala, RDIF is promoting the development and popularisation of sports in Russia,” Mr Dmitriev said.