HomeAbout SistemaInvestment Strategy

Mission & Investment Strategy

Mission

Sistema’s mission is to build an investment company with multi-industry expertise and a strong track record in managing shareholder and third-party funds. Investments focus primarily on new and innovative industries, with no restrictions on geography or industry. 

Value creation model

Sistema's investment company model envisages monetisation of the portfolio through incoming dividends and asset sales, as well as:

(1) investment in new, high-potential investment projects capable of generating high returns on invested capital;

(2) distribution of profit to Sistema's shareholders through dividends;

(3) investment in the development of existing assets to increase their value.

BASIC PRINCIPLES OF THE INVESTMENT STRATEGY

Direct investments from Sistema's Corporate Centre

 

  • Investments in controlling stakes of large assets, including distressed/undervalued businesses, or in large tech companies
  • Value creation via active management of acquired assets with potential engagement of a financial partner
  • Asset type: mainly mature businesses
  • Geography: mainly Russia
  • Industries: no restrictions, but in order of priority: consumer segment, B2B segment with export potential, and real estate
  • Deal size: starting from USD 100 mn; stake: starting from 50%+1; required IRR: more than 25% in rubles
  • Acquisition of assets with acceptable debt levels (Debt/OIBDA of the acquired asset less than 3.0), or higher debt levels if there is a plan for reduction to the acceptable level within two years

 

Direct investment through own funds (PE/VC)

 

  • Investments in promising future technologies, e.g., companies developing technologies and solutions that create new industries or disrupt existing sectors
  • Investments will be made through own funds with mandatory participation of outside investors as financial partners (share of outside partners: at least 20%)
  • Geography: no restrictions
  • Target fund size: starting from USD 100 mn; required IRR: more than 20% in USD
  • Deal sizes, stakes and stages of financing will be determined in the funds' investment theses
  • Market principles of income distribution and incentives for the team

Our business: creating value by leveraging competencies
Our principles of operation: competitive structure and clear criteria
Our strategy: applying science to create art
Our efficiency: no cash – no reward
  • Assessment and development of business strategies for our assets without involvement in operations
  • Monitoring of M&A opportunities in current and new sectors
  • Development and implementation of asset monetisation plans
  • Hiring efficient management for companies under our control
  • Providing comprehensive support to our assets in attracting financial and other resources
  • Increasing operational efficiency of acquired assets through restructuring and attracting industry partners to increase expertise and share financial risks
  • Managing assets according to the principle of deal origination and industry expertise of portfolio managers
  • A team of strategic experts, macroeconomists and communication professionals
  • Focus on investment with a positive net cash flow
  • Acquiring assets with an acceptable debt level (Debt/OIBDA < 3.0x) for preserving the Group's stable financial situation

SISTEMA'S STRATEGIC FOCUS

  • Maximising total shareholder return (TSR) and reducing the discount to net asset value (NAV)
  • Raising and managing outside capital to expand available resources for investment, and receiving income from management of assets
  • Reducing the Corporate Centre's debt to acceptable levels within 1-2 years
  • Focusing on investments in high-potential technologies
  • Remuneration of investment managers fully depends on cash generated by their portfolio for Sistema
  • Cash may be received from dividends or monetisation
  • Current dividends from MTS are not included in calculation of remuneration
  • Remuneration is paid after deducting the portfolio's expenses and the Central Bank's rate
  • Under the co-investment programme, which was adopted by Sistema in 2016, Sistema portfolio managers invest a portion of their total annual income into new and existing assets that they manage 

Corporate News

View All