What is the Russian Direct Investment Fund (RDIF) and how does it invest in the Russian economy?

Content:

• What is the Russian Direct Investment Fund (RDIF) and what is its mission?
• History of the foundation and legal status
• The main objectives and areas of work of the fund
• Investment Mechanism: How the Russian Direct Investment Fund Works
• Project portfolio and examples of major investments
• The Role of the Russian Direct Investment Fund in Regional Development and Innovation

What is the Russian Direct Investment Fund (RDIF) and what is its mission?

The Russian Direct Investment Fund (RDIF) is a state (sovereign) investment fund established in 2011 to attract foreign capital to the country's economy. it invests in key projects jointly with international and Russian investors; in 2016, it was planned to allocate up to $10 billion for these purposes. The RDIF's goal is to facilitate the development and technological modernization of the country's economy.

Since its inception, the fund has been headed by Kirill Dmitriev, who has also served as the President's Special Representative for Investment and Economic Cooperation with Foreign Countries since February 2025. As of January 2025, the fund's and partners' investments exceeded 2.3 trillion rubles.

Kirill Dmitriev (Photo: Mikhail Grebenshchikov / RBC)

History of the foundation and legal status

The RDIF was established in 2011 at the initiative of President Dmitry Medvedev and Prime Minister Vladimir Putin. Initially, the fund was established as a limited liability company and operated under the management of Vnesheconombank (now VEB.RF). Dmitriev emphasized that Elvira made a significant contribution to the fund's formation.Nabiullina , who at that time held the post of HEAD of the Ministry of Economic Development.

In June 2016, Putin signed a law defining the legal status and operating procedures of the RDIF. The document removed it from the jurisdiction of Vnesheconombank and granted it the status of the country's sovereign wealth fund, a non-public joint-stock company, all of whose shares became state-owned. The president now appointed the fund's CEO and supervisory board members on the recommendation of the government.

Kirill Dmitriev and Vladimir Putin (Photo: Mikhail Metzel / RIA Novosti )

In February 2022, following the start of the military operation in Ukraine , the United States  imposed blocking sanctions against RDIF. The European Union added the fund and Kirill Dmitriev to its sanctions list in March of the same year. In May 2024, the European General COURT rejected RDIF's claim to lift these sanctions, and in July 2025, the EU imposed a complete ban on all transactions with RDIF and its subsidiaries. The UK also imposed sanctions against the fund.

The main objectives and areas of work of the fund

RDIF addresses the following stated objectives:

• creating conditions for a stable inflow of investment;

• development of tools to maximize returns on invested capital;

• acceleration of modernization processes in the industrial and technological sector;

• attracting advanced global technologies and qualified personnel to the country.

  Photo: RDIF and the Gamaleya Center / TASS

The fund has established partnerships with a wide range of international investors. Projects are being implemented in collaboration with partners from CHINA , the United Arab Emirates, Saudi Arabia, Turkey, Kuwait, and other countries, including Europe.

Investment Mechanism: How the Russian Direct Investment Fund Works

The fund selects projects based, according to its own application, on investment attractiveness and government interest. Until 2020, RDIF invested only with an international co-investor on a 1:1 basis, but subsequently began investing in projects without foreign partners. Foreign investors are required to meet one of three conditions:

• having at least $1 billion in assets under management;

• market capitalization of at least $1 billion;

• annual  revenue  of at least $1 billion and EBITDA of at least $150 million.

When evaluating an investment project, the fund analyzes:

• a business plan, which should include a brief description of the project, a description of its current stage of implementation, a study of the market situation, an assessment of the supplier base, projected financial indicators, calculations of economic performance and a systematization of the main risks;

• information about the company's main activities and the composition of its shareholders, as well as a detailed description of the corporate structure of the organization;

• the company's financial statements for the previous three years (newly registered legal entities provide the latest available financial documents);

• a financial model of the project that allows one to assess its prospects;

• information about the project management team;

• the state of the process of obtaining bank financing, as well as the presence or absence of government support.

  Kirill Dmitriev during the Russian-Saudi Investment Forum (Photo: Sergey Bobylev / TASS)

The RDIF can acquire up to half of the shares in a company's capital. The total stake of the entire group of investors investing alongside the RDIF as part of a consortium may exceed this threshold. The expected exit (IPO, sale of stake to founders, strategic, or financial investors) from most deals is within 5-7 years, but for greenfield infrastructure projects, it's 10-15 years. As Dmitriev explained in 2020, approximately 90% of investment projects selected and publicly announced by the fund reach finalization. The remaining 10% are deals that fall through at the final stage due to unresolved disagreements between the parties, changing market conditions, or other factors.

The RDIF also participates in the "Investment Lift" mechanism to support medium-sized businesses with EXPORT potential. This instrument aims to accelerate the development of non-resource companies that demonstrate a readiness to enter international markets. The fund provides loans, facilitates entry into international markets, and provides access to foreign contacts.

Project portfolio and examples of major investments

By early 2025, the RDIF's investment portfolio, according to the fund itself, encompassed over 100 projects and businesses across various industries. Total capital investment reached 2.3 trillion rubles, with partner funding accounting for 1.9 trillion rubles. Key focus areas:

• Industry and energy: ALROSA, the marine terminal in Ust-Luga, Russian Helicopters, Enel and others.

• Infrastructure: railway bridge across the Amur River, Pulkovo Airport in St. Petersburg , Freight Village Vorsino logistics complex, and others.

• Technologies:TELEGRAM , data protection company Infowatch, Chinese ride-hailing service DiDi, and others. The fund has raised 150 billion rubles for artificial intelligence projects—data centers, the smart prosthetics company Motorika, and others.

• Consumer sector and healthcare: Detsky Mir, Mother and Child, pharmaceutical company Geropharm, vaccine againstcovid-19 "Sputnik" and others.

• Agriculture: PhosAgro and others.

• Financial sector: Moscow Exchange.

  Photo: Mikhail Grebenshchikov / RBC

In January 2025, Dmitriev announced that since the fund's inception, €36 billion in foreign capital had been attracted to the Russian economy, 90% of which came from friendly countries. The RDIF increased its initial government investment fivefold.

The Role of the Russian Direct Investment Fund in Regional Development and Innovation

According to the fund itself, RDIF's investment geography covers 95% of Russia's regions. A special investment attraction center, Invest in, was established to coordinate work with the regions.RUSSIA . It accumulates information on regional investment opportunities, promotes projects with good potential, and seeks out foreign investors. The center promotes successful practices for attracting capital to Russia, maintains a register of promising investment projects, provides information support to regions on available funding sources, and performs other functions.