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Mysterious goings on at VKontakte

0 22 April 2013

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The United Capital Partners fund, headed by Ilya Sherbovich is reported to have bought a 48% stake in Russia’s most popular social network VKontakte by buying out co-founders Vyacheslav Mirilashvili (40%) and Lev Leviev (8%). Although the terms of the deal have not been disclosed, the sum is likely to be at least $750 million, given that the company was valued at $1.5 billion last year. 

However, the value of the deal is not the only thing that remains shrouded in mystery. Fellow co-founder and current head of VKontakte Pavel Durov, who holds 12% of shares himself and also controls the 39.99% stake held by the Group, claims to have been unaware of the deal. It is also unlikely that Alisher Usmanov, owner of the Group (and recently named Britain’s richest resident) knew of the sale.

It is also rumored that Durov, who is also currently under investigation for a hit and run incident with a traffic police officer, will be voted out of his post as general director of the social network at a board meeting in May. 

The fund reported to have bought the shares, United Capital Partners, has been active in the Russian Venture Market for some time. In spring 2007 it bought a 10% stake in the retail chain “Modni Kontinent" (Cool Continent). However, it is better known for its connection with the oil and gas industry. It currently has investments in a number of currently undeveloped gas and oil fields, and sold a 25% stake in one in the Arctic Yamalo–Nenets region for $44 million to NOVATEK. The fund is also no stranger to intrigue. Before now, its greatest claim to fame was its involvement in the astonishing sale of Yukos’s central offices for $3 billion dollars to the unknown company “Prana”. 

Ilya Sherbovich, the fund’s director, also has a long history in the venture market. He began his career at IFC in 1993, before being invited to UFG by Charles Ryan and Boris Fyodorov in 1995. He ended up directing Deutsche Bank’s investment business in Russia, before moving on to United Capital Partners. He is also a board member of Rosneft.

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