Here’s how Goldman is gambling on Russian fitness
Gym investment is seeing Goldman Sachs raise the bar when it comes to deals it makes in Russia.
The bank has upped its investment in an upmarket chain of fitness clubs, World Class, which was founded by a Russian former fencer, reports Reuters.
It’s Special Situations Group (SSG) has been bagging modest deals in the country, supporting entrepreneurs who are seeking to make the most of a growing middle class.
SSG already owned 12.5 per cent in the chain. The deal will see it and Russian bank VTB buy out a stake owned by Alfa Capital Partners – an investment arm of Mikhail Fridman’s Alfa Group. They will jointly own 50 per cent of the business.
Despite economic slowdown, the investment bank has been wagering a rise in lifestyle spending. World Class membership costs about $2,500 (£1,520) a year.
Maxim Klimov, head of Goldman's European SSG in Russia commented: "We like the business, it is an established platform – one of the most well-known brands in Russia and it operates in the premium segment", says Reuters.
Klimov believes that a loyal customer base will give World Class durability in a waning economy:
Consumer demand may be [slowing down], but this doesn't … change the investment thesis – it just makes the bar a little higher and we're still bullish on the long-term picture across the cycle.