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Mission & Investment Strategy

Mission

Long-term growth of shareholder value through efficient management of the asset portfolio and achievement of high returns on investment.

Value creation model

The model of Sistema as an investment company envisages creation of shareholder value through constant reinvestment of capital - accumulation of cash from incoming dividends and monetisation of assets, distribution of the received profit in form of dividends among Sistema's shareholders, reinvestment in existing assets and new investment projects in order to receive further income. 

Components of successful growth 

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
  • Internal rate of return on investments above weighted-average cost of capital (IRR>WACC) with a 5-7-year payback period
  • Keeping consolidated Debt/EBITDA at 2x
  • Payout to shareholders of up to 30% of profit
  • 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

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