Baring’s links with Russia can be traced as far back as the XVIII century, when the company first provided trade financing to Russian merchants. In 1817, Barings became the primary international bank for the Russian Imperial government, placing bonds and raising financing for military spending as well as railway and city infrastructure development projects. The Russian Revolution in 1917 led to a suspension in Barings’ business relationship with Russia.
The origins of Baring Vostok Capital Partners date back to 1994 with the formation of the First NIS Regional Fund by Baring Asset Management and Sovlink, a Russian-American merchant bank. A dedicated team of four investment professionals from each party, including Michael Calvey, originally managed this fund. In 1997, the two teams merged to create Baring Vostok Capital Partners, which then became an affiliate of Baring’s dedicated private equity group, Baring Private Equity Partners (BPEP). BPEP subsequently became a 100% subsidiary of the Dutch banking Group ING.
The partnership with Baring Private Equity Partners and ING has provided Baring Vostok with a network of professionals with extensive investment experience in the developing markets of Asia, Latin America and Eastern Europe. This has allowed the Baring Vostok team to apply lessons already learned in similar markets while making use of innovative investment ideas. The initial years of Baring Vostok were a time of enormous change in the post-soviet economy, with market institutions being established and new legal foundations being laid in the countries throughout the region. Periodic crises in the Region’s economies posed major challenges for businesses in the fund’s portfolio. However, these crises also created new commercial and investment opportunities. In early 1998, the shareholders of the NIS Fund received their first dividend of $100 million. In total, distributions to the NIS Fund’s shareholders exceeded $620 million over the life of the fund.
Baring Vostok’s approach won the trust of investors. This trust, as well as the huge potential of the region’s economies since the 1998 economic crisis, led to the formation of the Baring Vostok Private Equity Fund in 2001 with total committed capital of $205 million.
In May 2004, BPEP finalized a management buyout of ING’s stake. Simultaneously, Baring Vostok's partners, jointly with the affiliates of BPEP’s other regional firms, purchased BPEP's stake in each of the regional companies. The partners of each of these companies subsequently founded a new entity, Baring Private Equity International ("BPEP International"). Through this alliance, regional teams retain full ownership of their respective businesses, while working under a single brand with common compliance and governance procedures.
In 2005, the Baring Vostok Private Equity Fund III, also advised by Baring Vostok Capital Partners, was raised with total committed capital of $413 million.
In February 2007, the Baring Vostok Private Equity Fund IV (“Fund IV”) was raised, with total committed capital of $1.05 billion. This was at the time the largest private equity fund in Central and Eastern Europe. In conjunction with Fund IV, the Baring Vostok Fund IV Supplemental Fund was raised with $450 million in total committed capital for the purpose of investing alongside Fund IV in larger opportunities.
