Nikolay Nesterenko

PRINCIPAL OF FORTIOR CAPITAL

Ukraine 2021  I  Infrastructure  I  Interview

Nikolay Nesterenko FORTIOR.png

BIOGRAPHY He graduated in 1998 at Donetsk National University and studied at Insead. Previously, he was part of the management of major companies in Ukraine such as Keramet Invest, Esta Holding, Corum Group, Lemtrans, Portinvest and SCM. He is the Managing Partner of Fortior Capital since January 2020.

“FOR INVESTORS WHO ARE MONITORING EMERGING MARKETS AND ARE INTERESTED IN INVESTMENT IN UKRAINE, I WOULD RECOMMEND TAKING A CLOSER LOOK NOW. IT'S THE RIGHT TIME REGARDLESS OF WHICH INDUSTRY YOU ARE IN.”

FORTIOR CAPITAL HAS MULTIPLE SUCCESSFUL INVESTMENTS IN THE COUNTRY. CAN YOU GIVE US AN OVERVIEW OF YOUR MAIN ACHIEVEMENTS?

 

Well, we already have a few investments and projects we can be proud of. As an example, Latifundist, our media holding, is already a well-established company with more than 10 years of history. It's a profitable business and the main independent media platform for the agricultural sector in Ukraine. The full team includes more than 80 managers, journalists, and others. They are the main source of information about the industry: news, latest data, and great in-depth research & analysis.

 

Latifundist being the market-leading platform also allows us a lot of unique opportunities. We have access to the main stakeholders, information, and pipeline of investment projects in the industry. Being able to see the market, talk to the most important players, and see real investment opportunities, that’s how some of our investments first came across our radar and then were added to our portfolio. For example, together with our German partner we launched a farming business, called the Grano Group, with a focus on two regions in Ukraine: Chernigov and Rivne which have become more and more attractive recently due to stable humidity levels and suitability for corn production.

 

Another example is our agricultural venture fund AgTech Farm. The Fund consists of thoroughly selected agrotech-focused start-ups. Some of them are already well known among industry professionals, like the project Feodal (feodal.online), which allows farmers to control their leased and owned land, from the legal perspective or the second-largest farm management system in Ukraine or market place for logistic services for grain producers Zernovoz (zernovoz.ua) or FarmForesight (farmforesight.com) business simulator which can be used in educational programs or as part of a business plan scenarios analysis processes. Some of them are still quite young, but definitely, they are on the right track.

 

Apart from our investment activities, we support our partners and clients through the M&A process, where we have demonstrated a number of successful projects. To give you some examples, we advised on the merger between two major Ukrainian players in the grain storage sector, or the acquisition of the large fleet of grain hoppers, or an acquisition of NPL portfolio for US-based investment fund, or complex banking acquisition and few others.

“I GAINED A RATHER UNIQUE EXPERIENCE IN

THE UKRAINIAN TRANSPORT INFRASTRUCTURE

MARKET. THIS EXPERIENCE, ALONG WITH THE ESTABLISHED CONTACT BASE, ALLOWED

FORTIOR CAPITAL TO EXECUTE A NUMBER

OF SUCCESSFUL PROJECTS IN THIS

SECTOR AS WELL.

RECENTLY YOU HAVE DECIDED TO CONCENTRATE 100% OF THE CAPITAL OF THE COMPANY MAKING IT READY FOR NEW INVESTMENT OPPORTUNITIES. WHAT IS YOUR STRATEGY FOR 2022 AND ARE YOU CONSIDERING INTERNATIONAL PARTNERS AS PART OF YOUR INVESTMENTS?

 

Our strategy remains unchanged. Fortior Capital is an investment company focused on effective investments in the Ukrainian market. We are present in all segments and across several industries and we provide investment banking services, like advising on M&A transactions or M&A opportunities, asset management and the private equity landscape. Even though our company as a separate legal entity has been set up only two years ago some of the businesses in our portfolio have been successfully operating much longer.

 

Our main assets however are our people. Professionals with deep understanding of the local market, knowledge and experience. For almost 20 years I worked for the biggest Ukrainian investment company, managing complex and large-scale projects in different industries including real estate, machinery building and financial services. The last decade of my career I have devoted myself to the transportation & logistics sector. Through my work on the boards of the largest private railway operator in Ukraine, Lemtrans, and the sea port forwarding operator PortInvest.

I gained a rather unique experience in the Ukrainian transport infrastructure market. This experience, along with the established contact base, allowed Fortior Capital to execute a number of successful projects in this sector as well. Our company will be focused on the areas of our expertise (transport infrastructure projects, agriculture, real estate and the financial sector). We also consider them the most promising and dynamically developing industries in Ukraine. We do want to work with international companies who are ready to explore opportunities in Ukraine and those that want to embark on this promising journey with us. Among our current partners are both national and international corporate, institutional and private investors from the US, Great Britain, Germany, Kazakhstan and others.

YOU HAVE EXTENSIVE EXPERIENCE IN THE INFRASTRUCTURE AND AGRIBUSINESS SECTORS, BOTH AMONG THE MOST SUCCESSFUL IN THE COUNTRY. WHAT IS YOUR PERSPECTIVE FOR THESE SECTORS AND FOR UKRAINE’S ECONOMY?

 

We understand the potential and importance of agriculture in the Ukrainian economy. The country is already well known for its agricultural achievements and leading positions in crop production. There are about 41 mln hectares of agricultural land in Ukraine (including more than 29 mln hectares of cultivated land), and the average size of farms is around 2’500 hectares. As you can imagine, this creates unique opportunities for investment, development, and implementation of new technologies.

 

It is also important to understand that one of the main ways in which we can boost economic growth in Ukraine today, is the development of transport infrastructure. Ukrainian businesses feel and deal with this challenge every day. Some of the industries are limited in their growth by capacity of transport infrastructure, which are huge itself, and extends all over the country but very often it is deeply worn-out and has bottle-necks in operating capabilities. They further do not meet the requirements of a fast developing business environment. Because of this gap, a large number of government programs are aimed specifically at this sector.

 

Roads, railways and sea port infrastructure are becoming very promising areas where state and private capital can combine their efforts. This needed infrastructure investment is a large market, where international investor participation is not only welcomed, but also supported with an implemented legislature to allow public private partnerships to work effectively and bring about the needed changes to the Ukrainian economy.

WHAT WOULD BE YOUR MESSAGE TO FOREIGN INVESTORS INTERESTED IN UKRAINE?

 

For investors who are monitoring emerging markets and are interested in investment in Ukraine, I would recommend taking a closer look now. It's the right time regardless of which industry you are in. There are a ton of interesting projects and opportunities especially if you have the right local partner. We are always interested in bringing world leading expert knowledge and smart capital to Ukraine, making our country, our economy and investors that invest in Ukraine not only business savvy, but also making a positive impact. At Fortior Capital we would be happy to support and navigate you through this journey.