Stock buyers from the U.S. and Europe made up the largest group of purchasers during the Russian toy retailer Detsky Mir’s initial public offering (IPO) on the Moscow Exchange in early February 2017.

The IPO raised USD355 million for the toy retailer. Vladimir Yevtushenkov’s Sistema company and the Russia-China Investment Fund (RCIF), created by the Russian Direct Investment Fund (RDIF) and the China Investment Corporation, sold a portion of their stakes in Detsky Mir and played a significant role during the IPO. The IPO’s order book closed on February 7, 2017.

In the words of Anton Malkov, who serves as head of capital markets at Sberbank CIB, Detsky Mir’s IPO represented a capital markets transaction of the type often seen in pre-crisis years. The offering attracted over 80 bids from investors coming from all corners of world. Buyers from the United Kingdom bought 35 percent of the stock. U.S. investors accounted for about 25 percent, while stock buyers from continental Europe for about 20 percent. Investors from Russia bought about 10 percent of the shares of stock during the IPO. The offering was oversubscribed.

According to Mr. Malkov, a critical aspect of the transaction was that the deal included the Russia-China Investment Fund that sold a considerable share of its own holdings in the company and attracted many investors.

Representatives of the RDIF indicated that equity funds from the Middle East participated in the IPO and that their share in the total stock purchase may have been as much as 10 percent.

Detsky Mir’s successful IPO is likely to motivate numerous firms on the Russian market to explore public placement possibilities. As Mr. Malkov of Sberbank CIB stated, investor confidence in Russia is on the rise. Sberbank CIB worked on putting the transaction together along with foreign banks. The listing of Detsky Mir constituted Russia’s first IPO with an emphasis on foreign buyers in a three-year timeframe.