An Introduction to Dnieper Capital

Our core business is buy-side equity investments in Ukraine usually by way of control acquisitions.

The company was founded by two partners, Michael Maltzoff and Sergey Grachov. Both have significant experience of buy-side investment and company acquisitions, especially in Ukraine. Their first control acquisition in Ukraine was in 1995, the first such transaction in the country by a financial buyer (it was of Yantar Brewery in Nikolaev). At the time, Michael was Investment Director with Invesco plc, and managed the East European Development Fund, and Sergey was head of Finance & Credit Invest, the leading brokerage company and financial boutique in Kiev.

Although Dnieper Capital is a new company, its founders are amongst the leading private equity professionals in the country. Here is a link to a table which describes their investment experience.

Our business model is private equity without a fund we identify excellent companies, buy them and grow their value up to an exit. We do not have a fund because we do not need one: capital markets are liquid and we have an excellent track record of making our investors money. We are able to raise very significant amounts of equity (up to $200 million) from western sources of finance for acquisition transactions. We are the promoter in the investment and manage the company with incumbent management ex post. The scarce resource, in our view, is not money but well-structured acquisition opportunities with best-practice corporate governance. We work closely with a small but expanding group of like-minded investor groups some of the biggest names in finance to put the financial structure together.

In due course we expect to be in the LBO business. The preconditions are for interest rates to come down and for local banks to acquire the skill sets and balance sheets required. The equity and mezzanine portions of a large LBO could already be raised. We would predict that the first $1 billion LBO will be executed within 4 years (perhaps by us?), and we plan to be a leader in the field.

A closely related activity that we are passionate about concerns another asset class real estate. This requires a different approach but similar skills. We are in the process of assembling a very strong team in this sector and have an unique concept that we shall bring to investors in the coming months.

Two other asset classes that we have an interest in are securitization (for which the first such issue in Ukraine was completed at the beginning of the year by one of the largest banks) and the Kyoto Protocol, which we have analysed for over a year. More on these activities in due course.