RUSSIAN-AMERICAN ENTERPRISE FUND ISSUES FIRST ANNUAL REPORT -- Fund Commits Approximately $12 Million In 5 Transactions -- New Investments In Leading Russian Financial Services Company And Recently Privatized Russian Construction Company.

MOSCOW AND NEW YORK, Feb. 27, 1995--(BUSINESS WIRE)--The Russian-American Enterprise Fund ("RAEF") announced today that it has issued its first annual report, which summarizes the fund's investment activities since its establishment in September 1993. RAEF also announced that it has entered into two new investment agreements in Russia, including the proposed acquisition of a 20 percent ownership interest in Financial Center Grant ("Grant"), a premier financial services company in Russia, and an $800,000 financial package for a Russian construction company, Marigrazhdanstroy.

The Russian-American Enterprise Fund is a private U.S. corporation that promotes the development of small and medium-sized Russian businesses by making loans to and investments in qualified enterprises, as well as providing them with technical assistance. Including the agreements announced today, RAEF's disbursements and commitments total approximately $12 million in five transactions.

In announcing the two latest transactions, A. Robert Towbin, President and Chief Executive Officer of the Russian-American Enterprise Fund, said: "These investments demonstrate RAEF's unwavering commitment to supporting small and medium-sized private businesses in Russia. They also contribute to RAEF's well-balanced and diversified investment portfolio."

Grant is a financial services company established in Moscow in 1992. It was one of the pioneers of the Russian privatization process and participated in the establishment and implementation of the Russian mass privatization program. It was one of the first Russian companies to be granted a broker's license and has participated in more than 200 auctions of Russian state-owned companies. It is widely regarded as one of the best Russian financial services companies.

The Russian-American Enterprise Fund will acquire a 20 percent equity interest in Grant and will have two seats on the company's Board of Directors. In addition, RAEF's nominee will chair an advisory committee that will establish internal governance and compliance procedures that will facilitate the company's activities and interaction with Western investors and clients.

Marigrazhdanstroy is a recently privatized construction company in the Mari-El republic of the Russian Federation located on the Volga River. Its majority-owned subsidiary established for the purposes of this project will receive financing from RAEF and Marigrazhdanstroy to acquire a new line of cement block producing equipment from a Western manufacturer. The new equipment will allow the company to substantially increase production using local natural resources and energy-efficient technology. The output of the company will be used for the fast-growing private construction market in Russia.

Three Previous Projects

As noted in its annual report, in recent months the Russian-American Enterprise Fund has financed three other projects. It participated together with EBRD, Russian Vneshtorg Bank and a German export credit agency, DEG, in the first Western-style project financing of a Russian- managed company, Zapsibinvest, involved in the wood processing industry in the city of Archangel.

RAEF also financed a small private women's garment manufacturing company by acquiring a 25 percent equity interest and extending a three-year line of credit to a company located in the town of Podolsk, south of Moscow. In addition, as part of a larger transaction, in December 1994 RAEF extended $1.2 million in bridge financing to Dieselprom, an engine manufacturing company in the city of Cheboksary in the Republic of Chuvashia.

In addition to its direct investments, the Russian-American Enterprise Fund also operates the Small Business Lending Program in partnership with Russian banks. Through the program RAEF makes loans of up to $100,000 to small businesses, sharing the returns and risks with its partner Russian banks. The program is currently operating through eight banks in four cities and will be expanded in the months ahead.

The Russian-American Enterprise Fund, which is governed by an independent Board of Directors composed of prominent American and Russian private citizens, was initially capitalized by the U.S. Congress through grants from the Agency for International Development (AID) which eventually will total $340 million. RAEF focuses on the support of economically viable Russian private enterprises and actively seeks corporate and financial partners from the U.S., Russia and elsewhere.

CONTACT: Russian-American Enterprise Fund

A. Robert Towbin Phone: [phone]

President and Chief Executive Officer

Fax: [phone]

OR

Roman Pipko Phone: [phone]

Senior Managing Director - Fax: [phone]

Direct Investments

OR

Paul DiLeo Phone: [phone]

Chairman and Chief Executive Officer -

Fax: [phone]

Small Business Lending Corp.