THE STRATEGY

Kazakhstan 2015 | FINANCE | INTERVIEW

TBY talks to Erlan Ospanov, Managing Partner and CEO of Verny Capital, on investing in private firms, the Talan Towers project, and targets for 2015.

Erlan Ospanov
BIOGRAPHY
Erlan Ospanov is responsible for the overall management of Verny Capital Group. Prior to the foundation of Verny Capital, he served as Deputy Director General of the ATF Group Holding Company in Kazakhstan. Before joining ATF, Erlan Ospanov worked for several years at Halyk Bank where he became Deputy Director of the Bank’s treasury operations. In the late 1990s, he also managed GRK Balkhas’ gold trading, processing and refining, and short-term pre-export financing operations. He graduated from Bauman Moscow State Technical University’s Department of Robotics. He also received a degree in Finance and Credit from KIMEP University, and an MBA from the University of International Business (Almaty).

You are involved in many key sectors of the national economy, but which sector are you most interested in exploring?

One of the major industries we are not represented in is the oil and gas industry, and we also do not have a presence in railroads or transportation. Since Verny Capital was established in 2006, our assets have grown to $4 billion. We became a diversified group, we have expertise and experience, and for our strategic partners, we offer expertise on how to do business here in Kazakhstan and other CIS countries. I can say that all of our partners are happy to do business with us here. Verny Capital is an active partner, and not just an investment partner. We participate intensely in the strategic management of each of our investments.

Can you elaborate on the most recent iconic project you have been involved in?

Currently, it is the Talan Towers, a 30-story mixed-use building with two towers with offices and a hotel plus luxury apartments in the second tower. The hotel is the Ritz-Carlton. In between will be a three-level luxury retail gallery, two levels of underground parking, and a large ballroom. The project is running well, the first phase (offices) should be finished by 2015, and the hotel and retail gallery should be completed by the end of 2016. The launching and start-up operations will commence at the beginning of 2017. Between the commissioning of the building and the opening, there is the so-called pre-opening period for the hotel. The real estate development business is not purely a private equity business. Most private equity companies are looking for opportunities to acquire distressed and undervalued companies, in order to bring in value and increase their capitalization.

Do you have any specific targets set for the end of 2015? What is your strategy to achieve your goals?

We have a number of strategic goals in each particular company that we own. I have already mentioned Talan Towers, and we also have goals for our gold mining company, Raygorodok. We are planning to finish 70% of the exploration work. In telecoms, we take a part in the management of Beeline, which is part of VympelCom Group, in Kazakhstan and Kyrgystan, where there is strong competition, and we wish to raise our market share with a goal of increased capitalization. By the end of 2015, we have to achieve substantial changes in our economic university as well. Our goal is to execute some exits and restructure our new portfolio because there is a cycle to our work. We are thinking about new partnerships. We have some plans to build grain and wheat processing plants in the pipeline, and we are also working on other mineral resource opportunities. We are considering food industries as well. In the short term, we are interested in finding partners in the wheat and grain segment. In addition, we are looking to get into transportation. We are hoping to extend our partnerships. We are open to new partnerships with global players in different industries. We know how to do business here, and we know which opportunities are present. We can brief and guide potential partners through all of the prospects in Kazakhstan, and we consider Verny Capital to be an experienced and reliable partner.