KIT Finance, a Russian investment bank founded in 2001, is opening an office in London this week and plans to raise €675 million ($1 billion) with an initial public offering in Moscow and London this year.
The bank, which has 50 offices in Russia and Eastern Europe, wants a London presence to compete with rival Russian banks, such as Renaissance Capital and Troika Dialog, for equity-capital-market deals.
"Having a London hub will improve the service we offer to Russian clients that want to list in London and sell to European investors," said Sergey Grechishkin , KIT Finance's deputy chief executive.
Renaissance Capital has 156 bankers based in London, while VTB Bank Europe, the investment-banking arm of OAO Bank VTB, has about 170, with plans to hire 15 structured-products experts this year. KIT hopes to have 10 staff members in London by the end of this year. Mr. Grechishkin, who is responsible for investment-banking operations, will oversee operations from Moscow.
KIT Finance plans to use the proceeds of the initial public offering for further expansion, particularly in Western Europe.
In addition to KIT Finance, 11 Russian companies have announced plans to float this year, but just one is scheduled for the London Stock Exchange, according to data from Thomson Financial.
Altimo, the telecommunications-industry investment business of Russia's Alfa Group, will make a decision whether to proceed with a London listing by the end of this year. The deal is expected to value the business in excess of $30 billion, nearly double its valuation just a year ago. Russian lender OAO Sberbank has said it could list $1.5 billion of global depositary receipts in London as early as next month.
Last year, 13 Russian companies raised $17.2 billion through initial public offerings on the LSE or its junior Alternative Investment Market. A further seven Moscow-listed issuers raised $3.1 billion through follow-on issues on the two exchanges, according to data provider Dealogic.