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  • IBH Capital Management

IBH Capital Will Divest of its Russian Assets

IBH Capital supports Ukraine's fight against Russia
IBH Capital Will Divest of its Russian Assets

Following the current political and economic impacts of Russia’s war on Ukraine, the board of directors at IBH Capital has decided to divest of our real estate holdings and other assets in Moscow, Russia.

We have reached out to a number of interested parties across the globe with an invitation to solicit acquisition bids by the end of October 2022. Following disposition of the last asset, we plan be close our office in Moscow by the end of the year.

Due to several economic circumstances coupled with increasing political risks, we expect that the valuation of our assets will be severely impacted and, thus, grossly discounted. Our estimates suggest around 20-30% discounts to the pre-war market values.

Our existing holdings in Russia include minority ownership in 3 assets: 2 manufacturing facilities and 1 office building in Moscow. All of these assets remain operational, however their profit margins show significant signs of further sustainability risks and growing infeasibility of a turnaround for at least 5-10 years, which largely depends on Russia’s foreign and domestic policies.

Since the start of the war on Ukraine, we managed to prepare and better position our Russian holdings for disposition by 1) increasing their financial performance through aggressive cost cutting, 2) deceasing our membership share, and 3) developing several alternative exit strategies. These steps should help us partially mitigate a variety of external factors that remain beyond our control.

In our solidarity with many international companies, IBH Capital directors have also made an executive decision to refuse our asset management and financial services to investors directly or indirectly affiliated with the Russian/Belarusian governments, the Russian/Belarusian militaries, any supporting or related organizations, as well as those, who approve this war.

We understand that some of our current/potential investors may be disappointed with the information contained in this release, therefore, we would like to emphasize that our exposure to the Russian real estate market has been minimal and under strong risk management controls limiting our deployed capital in Russia to 4.5% of our global real estate portfolio.

We strongly encourage our clients to think positively and stand united for peace, freedom, and justice in every part of our world, so that our work benefits more than one generation.

Victoria Lee

Portfolio Manager

Real Estate Holdings (EMEA)

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