Russian billionaire launches $17 billion fund

Russian billionaire Mikhail Prokhorov listens to a question during a news conference in Moscow, May 31, 2007. Prokhorov on Thursday launched a new private investment fund, Unexim Group, which has $17 billion in assets and will focus initially on energy, nano-technology and mining.

MOSCOW (Reuters) - Russian billionaire Mikhail Prokhorov launched on Thursday a $17 billion (8.6 billion pound) private investment fund, Onexim Group, which he said could almost double in value by developing energy, nano-technology and mining projects.

Prokhorov, the 42-year-old former chief executive of Norilsk Nickel GKMN.MM who is splitting from long-term business partner Vladimir Potanin, predicted the new group would control assets worth over $30 billion in five years.

"This is a conservative estimate," he told reporters at a presentation of the fund.

Prokhorov will be president of the group and former Norilsk Nickel executive Dmitry Razumov, 32, its general director.

Onexim Group was created on the basis of Prokhorov's 50 percent share in the Interros banking and industrial group and his 22 percent stakes in Norilsk and Polyus Gold (PLZL.MM) (PLZL.RTS), Russia's largest gold miner.

Prokhorov said the fund would develop energy projects, including hydrogen fuel cells, as well as high-technology projects and non-ferrous and precious metals mining.

"Onexim is going to examine projects, the value of which may double, triple or rise several times in the medium term," said Razumov, a former deputy chief executive of Norilsk.

"We are a big player and we are going to deal with projects costing $1 billion and more," he said. "We have a very ambitious task to build one of the largest private investment funds in the world specialising mainly in innovation projects."

Prokhorov said Onexim would focus on nano-technology, producing materials with ultra-tiny structures used in energy generation and medicine.

"We are thinking of investing hundreds of millions of dollars in this sector in Russia in the next three years."

KNOWN BRAND

Interros's assets include a further 8 percent of Norilsk Nickel, 7 percent of Polyus Gold, a 69 percent stake in Rosbank (ROSB.MM) -- Russia's seventh-largest bank by assets -- and 17.5 percent of U.S. fuel cell maker Plug Power (PLUG.O).

The Onexim brand is a successor to Oneximbank, also known as Uneximbank or United Export & Import Bank, an investment vehicle used by Potanin and Prokhorov to acquire stakes in Russian industry in the 1990s that was later folded into Rosbank.

As well as new forms of power, Onexim will expand in the traditional energy sector by acquiring and building power generating assets in Russia and abroad.

"We will continue an expansion in this sector developing Russian energy assets, and we will be looking at large energy projects in rapidly growing markets of developing countries which have a deficit of energy," Razumov said.

He named Brazil, Mexico, India, Vietnam and China as possible destinations for investment.

In mining, Onexim will focus on prospecting and developing new deposits in the former Soviet Union that had not been discovered and explored in Soviet times.

"We are interested in all solid raw materials, excluding oil and gas," Prokhorov said. Razumov added he did not rule out cooperation with Norilsk or Polyus in developing deposits.

Prokhorov and Potanin will divide their assets this year, after which they will decide whether to swap or sell them to each other. Prokhorov plans to sell his stake in Norilsk to Potanin.

Both men were ranked Russia's fourth-richest by Forbes magazine in May, with personal fortunes of $15 billion each.

Interros assets also include a 58 percent stake in property developer Open Investments OIVS.RTS and a 30 percent stake in turbine maker Power Machines SILM.RTS, where Germany's Siemens (SIEGn.DE) has a 25 percent-plus-one-share interest.

Interros also owns 26 percent of Russia Petroleum, operator of the giant Kovykta gas field that is 63 percent-owned by BP's (BP.L) Russian venture, TNK-BP TNBPI.RTS. It also owns the Prof Media company.