Interros is not interested in acquiring less than a controlling stake in a company, which it needs to be able to participate fully in the business and find the most effective solutions.
Project Implementation Phases
- Size of operations — new project
- Yield and capitalization growth potential — new project
- Competitive advantages and leadership opportunities in the market
- Understanding of the investment exit point
- Every company is an independent business entity
- Interros representatives sit on the company’s Board of Directors
- Interros prepares the company’s development strategy
- Interros gathers a team of top-notch executives
- Take the company public through an IPO
- Sell Interros’ stake, in full or in part, to an industry-specific investor or the management team
Interros controls strategy implementation and delegates all aspects of operational management to the executive team. This arrangement helps improve corporate governance, effectively manage risks, monitor capitalization and dividend policy, and build the company’s reputation.
For historical reasons and deriving from an agreement between Norilsk Nickel’s major shareholders, one exception to the rule is Norilsk Nickel MMC, where Interros owns a 34.6% stake and Vladimir Potanin is President and Chairman of the Management Board.
Evaluating Project Effectiveness
An investment project’s effectiveness is primarily assessed on investment performance base, meaning return on asset to include current yield and forecast market capitalization gain. Interros continuously monitors these indicators in order to evaluate its ongoing participation and decide when it makes sense to exit the project.
Interros exits investment projects for three reasons:
Reason one: the investment did not perform as expected. If that is the case, there is no point in beating one’s head against the wall; it is important to know when the time has come to admit mistakes and recognize failures.
Reason two: the toolkit has been exhausted and there is nothing else of value for you to bring into the project, so you have to contend with being a passive investor. Our company is an active investor – we either have complete control over a company, or we control it with a co-investor or exert significant influence sufficient for business development. There may also be a scenario where the project is at a stage when it needs to be handed over to a company with expertise in a particular area.
Reason three: the investment project is implemented and ready to be monetized. It is like a book: once the idea has been brought to life and the manuscript has been completed, all that is left is to publish it”.
Interros considers corporate governance to be core to project implementation.
Interros was one of the founders of NCCG — the National Council on Corporate Governance — a not-for-profit partnership of Russia’s largest securities issuers, investment companies, federal agencies, and the appropriate committees of the State Duma and the Federation Council.
Vladimir Potanin is the President of NCCG.