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Investment Approach Finam Capital focuses on mid-sized technology companies with solid business models and strong growth potential.

The strategy of Finam Capital is to identify and finance fast-growing companies in the technology, media and telecommunications (TMT) sector in Russia, then help them to unlock value and generate competitive long-term returns on invested capital.

The funds under Finam Capital’s management provide expansion and buy-out capital to technology companies with proven business models and large addressable market. Finam Capital invests between $1 m and $20 m in each company for an average period of three to five years before achieving liquidity through a sale to a strategic partner. We have a strong preference for control positions in our portfolio companies and offer flexible financing structures, including additional share issues and buy-out opportunities.

In evaluating and selecting companies for investing, we look for the following investment criteria:

• Market Position. How large is the market? Is the company a leader in its industry or market niche? Does it have the potential to become one?
• Management. What are the management’s strengths and weaknesses? Are their incentives aligned with those of investors?
• Growth Potential. Does the company have a clear competitive edge sufficient to scale up rapidly in its target market?
• Cash Flow and Profitability. Is the company at or near positive cash flow, and does it have an attractive level of profitability?
• Control. Will the investment secure control of the company or a significant minority interest, with adequate protective covenants for investors?
• Identifiable Exit Prospects. Are there multiple exit opportunities for the proposed investment, either through sale to domestic or international buyers, strategic buyers, or on public securities markets?
• Internal Rate of Return. Is the potential return commensurate with the risk in the context of the Fund’s overall portfolio of investments?

Finam Capital strongly believes in the investment potential of the TMT sector in Russia. We see it as one of the few sectors that combine a high degree of innovation, low market concentration, buoyant M&A and modest government regulation. Finam Capital has built as a successful track record and extensive connections among the technology companies and entrepreneurs in Russia, and will leverage its position going forward.