Private equity (transactions)—Russia—Q&A guide
Private equity (transactions)—Russia—Q&A guide

The following Financial Services practice note provides comprehensive and up to date legal information covering:

  • Private equity (transactions)—Russia—Q&A guide
  • 1. What different types of private equity transactions occur in your jurisdiction? What structures are commonly used in private equity investments and acquisitions?
  • 2. What are the implications of corporate governance rules for private equity transactions? Are there any advantages to going private in leveraged buyout or similar transactions? What are the effects of corporate governance rules on companies that, following a private equity transaction, remain or later become public companies?
  • 3. What are some of the issues facing boards of directors of public companies considering entering into a going-private or other private equity transaction? What procedural safeguards, if any, may boards of directors of public companies use when considering such a transaction? What is the role of a special committee in such a transaction where senior management, members of the board or significant shareholders are participating or have an interest in the transaction?
  • 4. Are there heightened disclosure issues in connection with going-private transactions or other private equity transactions?
  • 5. What are the timing considerations for negotiating and completing a going-private or other private equity transaction?
  • 6. What rights do shareholders of a target have to dissent or object to a going-private transaction? How do acquirers address the risks associated with shareholder dissent?
  • 7. What notable purchase agreement provisions are specific to private equity transactions?
  • 8. How can management of the target company participate in a going-private transaction? What are the principal executive compensation issues? Are there timing considerations for when a private equity acquirer should discuss management participation following the completion of a going-private transaction?
  • 9. What are some of the basic tax issues involved in private equity transactions? Give details regarding the tax status of a target, deductibility of interest based on the form of financing and tax issues related to executive compensation. Can share acquisitions be classified as asset acquisitions for tax purposes?
  • More...

This Practice Note contains a jurisdiction-specific Q&A guide to private equity (transactions) in Russia published as part of the Lexology Getting the Deal Through series by Law Business Research (published: November 2020).

Authors: Dechert LLP—Laura M. Brank; Evgenia Korotkova; Kirill Skopchevskiy; Pavel Dunaev; Tatiana Shlenchakova; Akop Tovmasyan

1. What different types of private equity transactions occur in your jurisdiction? What structures are commonly used in private equity investments and acquisitions?

Private equity transactions are carried out using a variety of structures. The most common investment vehicles are limited liability and joint-stock companies (assuming the transaction is structured via a Russian holding company). Given the relative novelty of private equity structures in Russia, private equity funds generally tend to set up offshore and invest in Russian companies via offshore vehicles.

Russian law provides for establishment of ‘investment partnerships’ and ‘unit investment funds’. Investment partnerships were introduced to create a vehicle for private equity funds similar to a general partner with limited partners in other jurisdictions, however, they are still not widely used and do not provide the same advantages, including tax advantages, as foreign structures. Unit investment funds are subject to extensive regulation and are more commonly used as collective investment vehicles for retail investors rather than by private equity firms for their acquisitions.     

Buyouts and going-private transactions are not typically carried out using private equity structures in Russia

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