LetterOne

LetterOne Group
Private
Industry Investment
Founded (2013 (2013))
Headquarters Luxembourg
Key people
 Mikhail Fridman, Chairman
Website www.letterone.lu

The LetterOne Group (LetterOne) is an international investment business based in Luxembourg. Its investments are focused on the telecoms, technology and energy sectors through its two main business units, L1 Energy and L1 Technology. Businessman Mikhail Fridman set up LetterOne in 2013 as part of a broader new investment vehicle using the proceeds from the sale of TNK-BP.[1]

Major assets

As of 31 December 2014 assets managed by LetterOne amounted to approximately $25bn. The sources of these assets are funds from the sale of TNK-BP, but also from assets invested in prior to the L1 Group’s formation. These include VimpelCom, Turkcell and private equity investments. The company has announced plans to invest in global oil, gas, telecoms and technology sectors.[2]


On 4 March 2015, the Secretary of State for Energy and Climate Change, Ed Davey, gave Fridman a one-week deadline to convince the UK government not to force him to sell the newly acquired North Sea oil and gas assets.[3]A senior western oil executive said the UK was entering “uncharted territory” by intervening publicly in a corporate transaction over fears of the effect of future sanctions against Russia.[4] In October 2015 LetterOne sold its North Sea Oil fields to Ineos, the chemical company, for an undisclosed sum.[5] The Financial Times has since reported that LetterOne has been told in a letter from a senior Government official that the previous Energy Secretary’s decision to require the sale of the North Sea fields ‘is not a judgement on the suitability of LetterOne’s owners to control these or any other assets in the UK.[6] On 14th October LetterOne Group announced that it had agreed a deal to acquire German utility Eon’s interests in three producing Norwegian fields, located in the North Sea. Norway’s oil minister said that approval would be handled ‘in the usual way’[7]

Sectors and Investment

The two main business units, L1 Energy and L1 Technology are supported by L1 Treasury Services, which managed the group’s liquidity and financial investments, including private equity holdings. LetterOne currently invests through strategic equity holdings in listed companies, or through the ownership of private companies. Lord Browne is the Executive Chairman of L1 Energy.[8]

L1 Energy

L1 Energy is an oil and gas investment company controlled by the Russian billionaire Mikhail Fridman, through Alfa Group, and chaired by Lord Browne.[9] On 2 March 2015, it was announced that Lord Browne was the Executive Chairman, and would be renouncing his other roles to build a major new oil and gas company from scratch.[10] L1 Energy will run RWE DEA, the purchase of which was announced in March 2014 that DEA for €5.1 billion. L1 Energy are seeking to build a global oil and gas company through the acquisition of platforms in Europe, North America and South East Asia.

L1 Technology

L1 Technology is LetterOne’s portfolio of mobile technology businesses, which they are growing in Europe, and the wider world. L1 Technology currently owns a 47.85% voting stake in Vimpelcom and 13.22% in Turkcell, Turkey’s leading telecoms operator. L1 Technology states that its aim is to target three main areas for acquisitions; existing businesses where it can add value, the acquisition of technology companies and access to customers through its global portfolios and the targeting of adjacent technologies which provide the opportunity to capitalize on. L1 Technology currently has an existing customer base of over 290 million, across the telecoms networks it is involved in.[11]

L1 Treasury Services

L1 Treasury Services manages the liquidity and financial investments of LetterOne. L1 Treasury’s mandate is to maximize returns on its financial investments within agreed constraints of liquidity and volatility that are tailored to the Group’s overall business strategy. To meet its competing objectives of returns, liquidity and volatility, L1 Treasury invests across a wide range of instruments and strategies. In particular, L1 Treasury combines a portfolio of liquid fixed income securities with higher yielding investments such as direct loans and real estate and with active trading in the financial markets, both direct and via hedge fund investments. L1 Treasury has the ability to enter into financing arrangements to further enhance its liquidity or returns.[12]

Private equity

Pamplona Capital Management

LetterOne invests extensively via its participation in Pamplona private equity funds.[13] Pamplona is a specialist investment manager that provides an alternative investment platform across private equity, fund of hedge funds and single manager hedge fund investments. They manage assets for a variety of clients including public pension funds, international wealth managers, multinational corporations, family offices and funds of hedge funds.[14]

Board of directors

The board of directors of the L1 Group is the company’s highest decision making body and is responsible for setting the investment strategy and making investment decisions.

References

  1. ↑ "Fridman may sell North Sea assets". The Times.
  2. ↑ "Fridman's Alfa Group sets up energy fund, to invest $20 bln". Reuters.
  3. ↑ "Russian oligarch Mikhail Fridman given North Sea deadline". BBC.
  4. ↑ "Downing Street behind challenge to Mikhail Fridman’s North Sea deal". Financial Times.
  5. ↑ "Billionaire Jim Ratcliffe snaps up North Sea oil fields".
  6. ↑ "Ineos targets further North Sea assets in wake of $750m deal". Financial Times.
  7. ↑ "Russia’s Fridman spends $1.6bn on Norwegian oil and gas fields". FTinancial Times.
  8. ↑ "Lord Browne to chair Russian tycoon's energy group".
  9. ↑ "Browne makes dealmaking comeback". Financial Times.
  10. ↑ "Ex-BP boss aims to build major energy industry player from scratch". The Guardian.
  11. ↑ "L1 Technology". LetterOne Group.
  12. ↑ "L1 Treasury". LetterOne Group.
  13. ↑ "A Russian American invests in Europe".
  14. ↑ "Company Overview of Pamplona Capital Management LLP".
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