(Reuters) - DMC Partners, a private equity firm co-founded by three former Goldman Sachs bankers, has called off its $2 billion investment venture targeting Russian deals amid ongoing conflict in Ukraine, the Financial Times reported, citing sources familiar with the matter.
The group, which has focused on emerging markets, abandoned the investment venture over the summer as the Ukraine-Russia situation deteriorated, according to two people with knowledge of the decision.
Foreign equity and bond investors who had tentatively ventured back into Russia after a huge early-2014 selloff are again slashing their holdings for fear of being caught in the crossfire of Western sanctions.
Russia has fared worst among the big emerging equity markets this year, with dollar-based losses of 13 percent.
Western sanctions imposed on Moscow for its perceived backing of rebels in eastern Ukraine have exacerbated an economic downturn in Russia and disrupted business for foreign companies that had invested heavily to tap Russia’s growing middle class.
Russia’s second-largest bank, VTB Bank (VTBR.MM) said in August that an economic slowdown and political tensions over Ukraine had damaged its business. It reported an 82 percent drop in first-half profit.
Reporting By Shivam Srivastav in Bangalore; Editing by Larry King