Life After Oil: Russian Oligarch Eyes $16Bln Investment in US, EU Telecoms

Russian billionaire Mikhail Fridman has set up a private-equity-style group with some of his Russian partners which will invest in technology and telecom companies in Europe and the US, according to the Financial Times.

The partners have already set up a London-based private-equity-style fund called LetterOne Technology (L1Technology) to operate $16 billion in funds (stretchable to $25 billion) to buy struggling telecom companies that require a fresh infusion of capital or technology companies that make apps or streaming services which could be used by its global mobile operations.

Fridman enlisted a substantial advisory board of industry players to help him get the job done.

The PVE fund's board will include Lastminute.com co-founder Brent Hoberman, Irish telecoms entrepreneur Denis O'Brien, former Google payments executive Osama Bedier, ex-Skype executive Russ Shaw and Sir Julian Horn-Smith, one of the original members of the management team at Vodafone.

The board has been brought together to aid acquisitions in the technology sector in order to augment an already-substantial portfolio of telecoms businesses.

L1Technology Chief executive Alexey Reznikovich told FT he believed that the "old fashioned" telecoms industry needed a root-and-branch overhaul to make money for investors.

L1Technology will also act as a holding company for the 48 percent that Fridman and his partners own in VimpelCom Ltd and the 13 percent they own in Turkcell, the Turkish telecoms company, which, the newspaper says, is being fought over with Mehmet Emin Karamehmet, one of Turkey’s best-known businessmen. The stakes are valued at about $14bn.

Another investment vehicle of Mikhail Fridman’s LetterOne Group, L1 Energy, ran into a spat with the UK government last month over its purchase of 12 North Sea oil and gas fields from the German utility company RWE.

The UK government had concerns that the production at these fields could stop if the West imposes more sanctions on Russia over Ukraine.

The company has hired financial advisers to help look at a variety of options for the fields and is now looking to sell the gas fields.

Previously, L1 Energy threatened to sue the UK Department of Energy and Climate Change over its pressure to force it to sell the oil and gas assets.