GERMAN INVESTMENT MANAGER OPENS DOOR TO RUSSIA A LITTLE WIDER Brings greater array of investment choices in a leading emerging market to European and Arab investors.

Saint stocks showing limited upside, many investors are worried the world’s hottest emerging market may be passing them by. It is this conundrum that Dr. Klaus Richter, longtime CEO of Osteuropa Investitionsholding AG is intent on solving. Richter is determined to give European and Middle Eastern sophisticated investors a leg up in taking advantage of Russia’s rosy economic outlook. If stocks are out, then in Dr. Richter’s opinion, private equity is in. A recent European Bank of Reconstruction and Development (EBRD) report places Russia as the world’s number one emerging market for private equity as well. Results on an industry-wide basis as well as from the results of the EBRD’s own private equity holdings tell the story. The EBRD’s CEE and CIS private equity funds’ portfolio returned a 55% internal rate of return (IRR) in 2005 following a 39% IRR in 2004. On the strength of these numbers, Osteuropa is providing sophisticated European and Middle Eastern investors new avenues of exposure to the Russian market by actively committing its efforts to fill an investment mandate to the EPEG Small Company Buyout Fund. The Fund, managed by Eurasian Private Equity Group Ltd. (EPEG), the Saint Petersburg-based alternative investments company headed by former Russian finance minister Igor Kostikov has announced the commitment by Osteuropa Investitionsholding AG to become a major investor in EPEG’s new private equity fund. While this is Osteuropa’s first investment into EPEG, Osteuropa and Dr. Richter are no strangers to the Russian market, having actively invested in Russia since 1994. Osteuropa will commit to becoming a major investor in the fund through solicitation of its investor ffrey Letino also commented, “Welcoming Osteuropa is a big moment for the Fund. Osteuropa and Dr. Richter’s 15 years investment experience in Russia make them a very experienced partner. Having that quality of partner makes a manager’s job from both the fundraising and management vantage points much easier. We’ve created the Fund specifically for high net worth individuals and family offices, so the terms of the Fund match up well with what Osteuropa’s investor base is seeking.” Board Chairman and Investment Director Dr. Igor Kostikov added, "Our fundraising efforts are focused on Europe and the Middle East, so this is a good fit. Osteuropa’s success in working with local GP’s in Russia is well documented. We look forward to continuing to provide exciting, well-crafted investment projects for the benefit of Osteuropa and all the members of our limited partner base.”


The EPEG Small Company Buyout Fund is intended to provide sophisticated investors with an opportunity to invest in the most dynamic aspects of the small company buyout and property markets of Russia & the former states of the Soviet Union. The EU-regulated fund pursues acquisitions of un-restructured former-Soviet enterprises, operating high-growth companies in the service sector and properties for development. The Fund is managed by its Board of Directors, Dr. Igor V. Kostikov, Jeffrey Letino and Harris Stavrinides. Dr. Kostikov, the former Russian cabinet minister for the financial markets from 2000-2004, serves as the Chairman of the Board of Directors and Fund Investment Director. Dr. Kostikov is the founder of one of Russia’s leading financial services companies, AVK Financial Group though he no longer retains an interest. He has a long history of high profile private equity investments in Russia and is often referred to as Russia’s “most famous fund markets figure of the last several years.” (Business, 20 April 06)

News and other information about EPEG is available at www.eurasianequity.com.

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