Company News

Finam Management and non-state pension fund Interros-Dostoinstvo signed an agreement on pension reserves management. According to the documents signed the companies’ cooperation will not be limited to the management of funds provided by future pensioners. Committed to offering its clients a wide range of financial services, Finam Investment Holding will be able to provide its clients with pension coverage on extremely favorable terms from one of the leaders in the area of pension reserves management. Interros-Dostoinstvo in turn will make use of its own unique methods in the interests of Finam clients and partners.

Due to skillful forecast of the market trends by the company’s analysts and managers, short-term transactions in Yukos stocks with record high 25% yields were carried out. This enabled the fund to become the most efficient compared with other mutual funds.

Finam Investment Company has named the company in whose interests it consolidated the controlling stake and liabilities of Krasnoyarsk Metallurgical Plant Sibelectrostal last autumn. The metal maker’s new owners are business structures affiliated with Krasny Yar, which was founded by the former top-management of Bratsk Aluminum Smelter. Krasny Yar owns a 25% stake in Alukom Taishet aluminum smelter and 48.8% of voting shares were previously owned by Alfa-Eco M.

FINAM Investment Company is said to have closed the deal to sell off the controlling stake and liabilities of Krasnoyarsk Metallurgical Plant Sibelectrostal. According to Finam’s press release, new owners of the metal maker are business structures affiliated with Krasny Yar. Finam Investment Сompany bought the metal maker’s block of shares from Alfa-Eco M last December. At present, all acquired assets have been handed over to the new owner.

A new management team has unveiled its plans to invest in equipment overhaul and production development of the metal maker, as well as take steps to improve the company’s financial standing. In addition, Sibelectrostal’s new owner is mulling new projects at the metal maker’s facilities.

Krasny Yar is a core investor. The company has a long and successful track record in the metal sector. Inter alia, Krasny Yar owns a 25% stake in Alukom Taishet aluminum smelter.

Statistics

FINAM Investment Holding has announced the purchase of an 80% stake in Begun (Runner), which owns a company by the same name involved in contextual online advertising. Financial details of the deal have not been disclosed.

The investment company has acquired an internet advertising agency.

FINAM Investment Company has decided to establish a holding of high tech assets. The first company to enter the holding was internet advertising agency Begun (Runner), in which FINAM acquired an 80% stake this week.

Runner was founded by a group of specialists who left SpyLOG Analytical Company in January 2002. The company has engineered a web-based contextual internet paid advertising system. Ad content is pegged to user inquiries, i.e. ads displayed follow the same topic which is being sought by the search engine. Runner runs nearly 3,000 advertising campaigns, with a staff of about 20.

The FINAM holding consists of an investment company by the same name, FINAM Management Company, FINAM Information Group and FINAM Insurance broker. According to NAUFOR, in 2Q 2003 the holding’s stock exchange turnover stood at Rub 63 bln (number 6 in the list), while OTC turnover totaled nearly Rub 226 mln (number 106).

FINAM CEO Victor Remsha told Vedomosti on Monday that his company closed the deal to buy an 80% stake in Runner. He said that contextual advertising would grow fast on the Russian Internet.

According to Remsha, this purchase is the first step in the chain of planned hi-tech acquisitions. In addition to Runner, some more hi-tech projects will enter the holding, which FINAM is currently mulling. Remsha declined both to name these and comment on the details of the future holding.

Runner Executive Director Alexei Basov says that the agency started to receive purchase offers as soon as the agency’s shaping influence on the market became evident. The company’s shareholders met several times to consider them, and, as a result, one of the proposals was accepted.

Runner was co-owned by several individuals, part of which retained a 20% stake. The details of the deal are not disclosed. Basov says that, being one of the former shareholders, he is nevertheless unable to speak on behalf of every participant in the deal from the Runner part. According to him, Runner will now have new growth opportunities and retain its status as an independent company within the holding structure.

Market players hold different views on FINAM’s acquisition. Arsen Revazov, President of IMHO VI online advertising agency, views Runner’s business as very promising and estimates its value at roughly $1 mln. According to Revazov, Runner’s market share accounts for at least 3-5% of the online advertising market.

Lev Gleizer, President of AdWatch online advertising agency, estimates Runner’s annual turnover at $750,000 and believes that FINAM could have paid nearly $250,000 for an 80% stake in the company. Gleizer says that valuation of an advertising agency is not underpinned by its turnover, since its profit margins are largely attributtable to partnership relations. According to him, success of Runner’s business is too much dependent on Mail.ru, the largest internet site where the agency sells its adverts. For this reason, it is of overriding importance how strong this relationship is and how long the term of the contract with Mail.ru is. Gleizer adds that it is also important that Runner get on well with Rambler, another internet portal. Basov disagrees with dependence of Runner’s business on Runet’s other majors. He places advertising on many sites, among them nearly 1,500 small sites, which account for over 50% of the total profit. Mail.ru Vice President Tatyana Zhelonkina says that her company is satisfied with cooperation with Runner. According to Zhelonkina, the contract between Mail.ru and Runner is flexible and can be unilaterally cancelled. Zhelonkina adds that she hopes the acquisition of Runner will be of neutral impact on their partnership relations.

That said, Rambler will hardly need Runner’s services, since it is mulling to launch its own contextual advertising service. Rambler Deputy Director General Ivan Zasursky is laughing and saying that his company would have to purchase Runner to meet the target, but they were left behind.

Runet has already witnessed a number of successful cases of cooperation between investment banks and internet projects. In 1999 Russian Funds Investment group acquired a stake in Rambler internet portal and sold it off to FMCG investment bank two weeks ago. Neftyanoi (Oil) Concern recently snapped up a large block of shares in Mail.ru. The company’s management is satisfied with these investments.

Alexander Boreiko, Svetlana Petrova