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RVC Achieves a Positive Return on Capital

24.11.2020

According to the results of the assessment of the investment portfolio of RVC as of the end of the third quarter of 2020, the return on capital indicator (TVPI) exceeded the figure of one.

TVPI (Total Value to Paid-in Capital) is one of the key performance indicators of venture capital funds and reflects the assets' total value ratio to the invested capital. Simultaneously, the value of assets considers both the actual return on capital by exits and the estimated value of assets not yet sold.

By 2020, two-thirds of venture funds created with RVC capital participation entered the post-investment phase and focused on exits from invested companies. By the end of the third quarter of 2020, RVC funds had implemented 150 exits, of which more than 70% of transactions fell on the period since 2017, including over 20 exit transactions were closed in 2020. Over the past three years and nine months of 2020, the actual return increased by 7.1 billion roubles. Moreover, the average Gross IRR for the period 2017–2019, reflecting the realized profitability considering the time factor, was 18%. The total return on funds amounted to about 10.5 billion roubles, which is 2.1 billion roubles higher than the investment.

Simultaneously, the estimated value of the current portfolio of RVC funds, which at the end of the third quarter of 2020 included 150 innovative companies, amounted to 14.2 billion roubles[1], an increase of 50% since 2017.

Alexey Basov, Deputy General Director — Investment Director, RVC
Purposeful work to increase the profitability of the RVC portfolio, which has been carried out over the past few years and creating new funds, has made it possible to exceed the value of assets over the number of investments at the current investment stage. The fulfillment of state tasks for the development of technology markets, in balance with the return on capital, is one of the key strategic goals of RVC. The focus on the best investment practices and professional managers has paid off. We are confident that further growth in the portfolio's value will provide funds with market returns.

RVC is a backbone player in the Russian venture capital market. The funds created with RVC capital participation account for 32% of the total number of active venture capital funds in Russia[2], including foreign funds investing in Russian projects[3]. In the last three years alone, as many as nine new funds were created with the participation of RVC capital for 28 billion roubles. The total volume of RVC funds is 20% of the total capitalization of funds in the Russian venture capital market. Over the past 3.5 years, it has grown by 62%[4].





[1] The appraisal was made according to the methodology for assessing the fair value of assets developed by RVC and EY: https://www.rvc.ru/upload/iblock/c12/RVC_method_of_valuation_of_assets.pdf


[2] Active funds are funds that made investments and/or exits in the reporting period


[3] The assessment was made based on RAWI data for the 1st half of 2020: http://www.rvca.ru/upload/files/lib/RVCA-yearbook-I-2020-Russian-PE-and-VC-market-review-ru.pdf


[4] In dollar terms



Information

RVC is a governmental fund of funds, the Institute of Development of the Russian Federation. The main objectives of RVC to stimulate the creation of Russia's own venture capital industry and execute functions of the Project Office of the National Technology Initiative (NTI). The authorized capital of RVC is more than 30 billion roubles. One hundred percent of the RVC capital belongs to the Russian Federation represented by the Federal Agency for Management of State Property of the Russian Federation (Federal Property Management Agency). The total number of funds formed by RVC has reached 29; their full size is 64.4 billion roubles. Funds with capital participation of RVC JSC invested more than 290 portfolio companies for a total amount of 23 billion rubles.
www.rvc.ru

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