Said Kerimov took on juniors

While Suleiman Kerimov is sitting under house arrest in France, his son is entering a new investment field in the UK.
The owner of the gold miner, Polyus, Said Kerimov, created the Nugget Capital investment company for investments in foreign profile juniors, companies that are exploring for sale. The very "Pole" such diversification, in fact, is not needed. Therefore, although it is possible for the management of the company to evaluate the investments, analysts do not expect that the future assets of Nugget Capital will go to the gold miner.

The London-based Polyus Gold Plc, owned by the majority shareholder of Polyus, Said Kerimov, through Polyus Gold International Limited (PGIL, Jersey), in mid-December, changed its name to Nugget Capital Plc, the company said. Polyus Gold Plc was established in 2011 to receive a gold mining premium listing on the London Stock Exchange, but in 2012 it became possible and with the preservation of PGIL as the head structure. Since its inception, Polyus Gold Plc has not conducted trading operations and only in 2017 was used at SPO Polyus in London: it sold lenders borrowed from PGIL paper of the company and redeemed new shares, returning them to the Jersey company. As Kommersant sources say, now the London Polyus does not participate in the chain of ownership of the "Pole".

According to the interlocutors of "Kommersant", Nugget Capital will invest in junior gold mining companies around the world (nugget in translation from English - "nugget"). This is a separate project of Said Kerimov, not associated with the "Pole", they say, without revealing the details. Pavel Grachev, CEO of Polyus, in an interview with Kommersant in December 2017 noted that there is a developed market for juniors abroad, but the cost of acquiring them for major global players should be "comparable with the costs and risks of exploration by one's own efforts, especially if it is a question about some new regions. " "It is clear that the purchase of a junior company can not replace the exploration of flanks in its own fields. These are complementary things, "said the top manager. He noted that "Polyus" does not have a taboo on CIS countries or far-abroad countries, but we do not set ourselves the goals of geographical diversification either. " Discuss representatives of Polyus and the Kerimov family refused to discuss the work of Nugget Capital.

An employee of one of the investment companies is sure that Nugget Capital will use the expertise of Polyus: "This is a standard practice for a family office, which allows using the resources of a shareholder's company and withdrawing cream with a successful investment." Both he and other sources of Kommersant in the industry note that in recent years the team of Nafta Moskva, the managing company of the Kerimov family, has significantly decreased. According to the Cyprus registry, now Nafta Moskva (Cyprus) Limited has only one director - Marcel Ernst Bucher, whereas in 2013 there were seven, including Pavel Grachev (later the accounts were not disclosed).

Oleg Petropavlovski from BCS believes that Nugget Capital can manage international consultants for investments in juniors, especially since the expertise of Polyus is strong on the Russian market. In his opinion, if it is not just portfolio investments, this way of building a company has the right to exist, besides, there are almost no attractive gold deposits in Russia in the undistributed fund.

It is unlikely that the future sale of Nugget Capital's assets to Polyus will be expected, since, based on its current strategy, the inclusion of foreign juniors seems unlikely, says the analyst. And the example of Nordgold Alexei Mordashov shows that investors do not always react to such purchases in proportion to the company's expectations, adds Oleg Petropavlovskiy. Nikolai Sosnovsky from Prosperity Capital Management says that Polyus had an idea to make a small investment division to work with juniors. But, the analyst clarifies, the company seems to have abandoned it, "judging reasonably that portfolio investments without further operational consolidation of assets are not fully in line with the strategy, and institutional investors will not be delighted." At the same time, he believes, the key shareholder and management of Polyus have money and ambitions, which allow spending $ 50-100 million on several juniors and gaining experience on the global market.