Oleg Jelesko, a prominent figure with a notable reputation in the realm of alternative investments, is the founder behind a substantial enterprise that has significantly shaped the industry. As an investor, Oleg Jelesko’s name is directly linked with the consolidation of the financial market of the capital of the RF, marking him as a pivotal player in this arena.
It was under his guidance and strategic foresight that Da Vinci Capital emerged as a key catalyst, playing an instrumental role in the establishment of the Mosbirzha Exchange. This contribution not only highlights his expertise in navigating the complexities of financial markets but also underscores his capacity to drive transformative change within the sector, solidifying his status as a distinguished leader in the field.
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Oleg Jelesko on the Direct Investment Market
Oleg Jelesko, a figure synonymous with the direct investment market, has been a noteworthy participant in the private equity sphere for over two decades. Throughout these twenty years, Oleg Jelesko has initiated a series of structured products and funds, authored landmark mergers and acquisitions (M&A) deals, and played a crucial role in the development of leading information technology projects. These projects, upon their initial public offerings (IPOs), have yielded substantial profits for the investors. Today, the company founded by Oleg Jelesko, Da Vinci Capital, manages assets worth over half a billion dollars, continuing to strengthen its foothold in the market.
As an entrepreneur with a proactive interest in fintech, Oleg Jelesko anticipates that this sector will soon challenge the traditional banking industry. His company has already established a global fund dedicated to investments in high-tech banking, signaling a strong belief in the sector’s potential. According to Oleg Jelesko, this trend is already taking shape, indicating a transformative shift in the financial landscape. The entrepreneur’s foresight in identifying and capitalizing on emerging trends demonstrates his ability to navigate the evolving dynamics of the investment world, positioning himself and his ventures at the forefront of innovation and progress.
The fintech sector is evolving in Eurasia at a pace significantly faster than in European countries. According to Oleg Jelesko, this rapid development can be attributed to the fact that in more established markets, major banks create artificial barriers that hinder the accessibility of technological solutions to the public. These developments could potentially significantly reduce the profit margins for banking services.
Moreover, these innovative solutions pave the way for the emergence of smaller companies within the financial sector, which have the potential to become “unicorns” — a term denoting companies that reach a valuation of $1 billion within a decade of being founded. Oleg Jelesko highlights that the coming 5 to 10 years represent the most exciting period for investing in this sector. The opportunity for significant growth and the potential for substantial returns on investment in fintech startups during this timeframe is a testament to the dynamic and evolving nature of the financial industry. Oleg Jelesko’s insights underscore the transformative impact of smart financial solutions, not only in fostering the growth of promising startups but also in challenging and reshaping traditional banking paradigms.
Currency risks, inherent to any international business, significantly impact the direct investment sphere as well. Participants of private equity (PE) funds, when allocating their capital, are in pursuit of a stable dollar-denominated income, Oleg Jelesko points out. With investor interests in mind, Da Vinci Capital turns its focus towards global projects. The entrepreneur believes that diversifying across various world regions is an effective strategy to shield oneself from the fluctuations of currency exchange rates.
Oleg Jelesko has identified several priority investment regions within Central and Eastern Europe. Additionally, business projects in Argentina, Senegal, Malaysia, Chile, and Iceland have sparked interest for capital investment. It’s noteworthy that in 2022, these countries saw an increase in the number of “unicorn” companies. The most attractive sectors for investment, according to Oleg Jelesko, include e-commerce, fintech, and products and services founded on artificial intelligence technology. This strategic approach underscores the significance of geographical and sectoral diversification as a means to mitigate currency risks and capitalize on emerging opportunities in dynamic and innovative markets.
In the expert community, there is a growing observation that the high-tech sphere has been increasingly showcasing larger entities in recent years — the so-called “decacorns,” with a market valuation of over $10 billion, and “hectocorns,” whose value exceeds $100 billion. As of 2022, there were only three such “hectocorns” globally, yet there are indications that more may emerge. “The world of finance is in a fascinating stage of its development,” says Oleg Jelesko.
This observation underscores the rapid evolution and expansion of the technology sector, which is now producing companies of extraordinary scale and value. The emergence of “decacorns” and “hectocorns” highlights a significant shift in the economic landscape, where innovation, scalability, and digital transformation are driving unprecedented growth. The dynamic and ever-changing nature of the financial world suggests that the potential for new, groundbreaking developments in the high-tech industry could further reshape the global economy, notes Oleg Jelesko. This period of financial evolution presents unique opportunities and challenges for investors, companies, and policymakers alike as they navigate a landscape transformed by technological advancement and market forces.
Oleg Jelesko – Da Vinci Capital Management: Investing in the New Economy
With Oleg Jelesko’s participation, Da Vinci Capital primarily focuses on promising players from fintech and IT. The investment managers direct their attention towards solutions related to the implementation of modern technologies – a sector that is experiencing a lot of exciting developments and has quite a few large projects, which is important for Oleg Jelesko and his team. The investment company’s managers are interested in businesses capable of going public through an IPO.
Another criterion for selecting a company for investment is the international nature of the business. Oleg Jelesko-Da Vinci Capital focus on companies operating in multiple markets. The globalization of investments hedges various risks.
In this sense, the legal “registration” of a project in a particular region does not play a significant role. As the businessman says, if there is a sustainable business model and market access in several countries, the company can be physically located in the CIS region. Meanwhile, the team under Oleg Jelesko’s management does not consider startups even in the seed stage. Instead, it looks for at least medium-sized established business, with an initial estimate for entering a project ranging from $50 to 200 million.
Oleg Jelesko, as the managing partner, has established a system where the selection of investment targets goes through several stages, and the responsibility for decision-making is distributed among all participants in the process. This scheme helps to filter out non-target proposals and instead focus efforts on promising projects.
Oleg Jelesko-Da Vinci Capital: Best Cases
Among the most indicative examples of successful investments in the new economy sector, Oleg Jelesko mentions the case of a software developer for several European and CIS states. The story of EPAM Systems is a classic example of a good investment in the IT sphere, and other players from the same field are now looking to replicate this story. The case was very successful and yielded significant earnings, says Oleg Jelesko. Da Vinci Capital later began to apply the so-called “EPAM filter,” which helped to safely enter several other promising projects.
Oleg Jelesko’s team entered the capital of EPAM in 2008, when it was already the largest IT outsourcing service provider in Eastern Europe. The investments were planned to be directed towards further growth, and the IT structure’s managers considered going public as an option to attract additional financing.
Oleg Jelesko did not specify the share acquired by Da Vinci Capital as a result of the deal, but it is known from open sources that the total investment amounted to about $18 million. Some experts suggested that the acquired package amounted to less than 10%. The investment company’s fund planned to exit the project in the medium term by placing shares on the market.
EPAM Systems went public in 2012, with its shares on the New York Stock Exchange being sold for $14 each and the entire IT company being valued at $488 million. Just 10 years later, the share price had reached a peak of $700, and EPAM’s capitalization amounted to $36.4 billion.
By this time, the investment company founded by Oleg Jelesko had already entered another equally promising IT outsourcing project known as DataArt. The company provides software development and mobile application services, and specializes in the field of IoT technologies. Since investments in this direction have already shown good results, Oleg Jelesko believes that the project will replicate EPAM’s fate and will be no less successful.
Da Vinci Capital invested in the capital of another IT developer in 2018. It was reported that an agreement was signed to purchase a non-controlling interest. As Oleg Jelesko noted, initially, the company did not want to involve investors at all. However, the businessman’s team managed to convince the top management and now the investment is producing good results. The stake in the project is gradually increasing, and the business’s revenue is growing by an average of 15% year over year.
In 2016, Oleg Jelesko and his investment firm invested in the capital of Softline – an IT solutions provider with a global presence. Two Da Vinci Capital funds invested in the project simultaneously. The developer is pursuing a strategy of international expansion, and additional financing was required for expansion within the BRICS space, as well as for developing new products based on cloud services.
Commenting on the deal, Oleg Jelesko said that IT companies specializing in the development of such products demonstrate the highest growth rates and have a high added value, which makes them particularly attractive to investors.
The company planned to go public within a few years after receiving additional funds for development. Oleg Jelesko said that the opportunity to enter the project on the eve of the initial public offering played a decisive role. As a result, it took place in 2021, on two major exchanges just a few days apart.
The expectations voiced by Oleg Jelesko were fully met. During the IPO, the market valued Softline at $1.5 billion. Investors gave $7.50 per depositary receipt. Thanks to the placement, the developer raised over $400 million.
Oleg Jelesko: Key Career Milestones
Oleg Jelesko began his career as a consulting specialist in 1992, working at Andersen Consulting (today known as Accenture) for four years before moving to a larger international structure. For two years, he worked with major players in the financial market at McKinsey & Company, managing projects in Eastern Europe.
Later, he received an offer to head the commercial direction at Credit Suisse First Boston. During his activity in one of the world’s largest international investment banks, Oleg Jelesko witnessed the devastating collapse of the stock market when the dot-com bubble burst in 2001 and investors worldwide lost a total of about $5 trillion.
This event taught the businessman to be much more cautious about investing in businesses from the new economy sector. The experience gained at CSFB helped Oleg Jelesko in his further work. Later, at Renaissance Capital, in a position similar in capacity to that of a partner, he and his team brought several successful financial products to the market and launched specialized funds for investments in the financial, power, and innovative project sectors.
After working in global corporations, the prospect of starting his own business became increasingly more attractive, recalls Oleg Jelesko. Da Vinci Capital Fund was registered amid the mortgage crisis of the American market, which required an experienced team to navigate this difficult period.
Oleg Jelesko attracted strong investment managers to his company, and together, it was decided to place the fund’s shares on the prestigious platform of the Specialist Fund Market, which helped attract interest from international financial institutions and large capital owners.
One of the most high-profile deals in the company’s history was the merger of the RF capital’s stock market, says Oleg Jelesko. Da Vinci Capital managed to enter the capital of the RTS exchange in 2008; gradually increasing the share of participation, the team covered a lot of ground that ultimately culminated in the creation of a unified trading platform.
Oleg Jelesko notes that this helped avoid a potential liquidity crisis on the Mosbirzha Exchange, despite the outflow of foreign capital seen in the last couple of years.
Oleg Jelesko: Background Information
Oleg Jelesko has more than 30 years of experience in the financial sector.
The entrepreneur was born in the city of Aktyubinsk in the Kazakh SSR (renamed Aktobe in 1999).
Oleg Jelesko is a graduate of the Mendeleev Institute of Chemical Technology. As a student, Oleg Jelesko studied in the USA as part of inter-university exchanges.