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Russia’s isolation also brings opportunities

The final example is the private women’s and children’s healthcare company MD Medical Group, which is benefitting from tax incentives to use private alternatives to public healthcare.

“MD Medical Group has acquired significant market share and are regarded as one of Russia’s leading private healthcare providers. The company is benefiting from the growing trend amongst middle and upper class Russians to pay privately for healthcare,” said Levy, who expects it to benefit both organically and through acquisitions from a growth perspective.

A lack of payouts

There are some, however, that aren’t quite as enamoured with Russia’s rising stars.

As Kirill Yankovskiy, director of equity sales at Russian bank Otkritie Capital International, points out: “None of these companies pay dividends”.

While the economy continues to recover, he says, the easy ‘land grabs’ have happened. And, he points out “these ‘new Russia’ companies need to compete with Google.”

However, he does concede that while that is the case, “They are domestically oriented, and chances are Russia will be going thorugh a renewed period of consumption.”

With regards to the risks always inherent when investing in Russia, Levy said these are “already reflected in the valuations.”

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