Pamplona Capital Management is moving to cut ties with Russian investment group LetterOne after its founders were sanctioned by European Union (EU).

The private equity firm, which manages $3bn of LetterOne’s money, said it will return the LetterOne’s investment in its private-equity fund, according to a Bloomberg report.

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LetterOne was founded in 2013 by Russian oligarch Mikhail Fridman and Petr Aven. 

Both Fridman and Aven resigned from the board of the investment group this month after they came under EU sanctions in the wake of Russia’s invasion of Ukraine.

Pamplona said it plans to conduct the redemptions in ‘an orderly manner’ in line with regulatory and counterparty consent.

The move is expected to help the firm shield itself from direct or indirect exposure to any Russian capital.

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Pamplona said in a statement: “While Pamplona has received clear guidance that LetterOne is not a sanctioned entity, the ongoing crisis in Ukraine makes such relationships increasingly challenging for our portfolio companies, their management teams, customers, employees, and counterparties throughout Europe and the rest of the world.”

Commenting on the development, LetterOne told Bloomberg: “We sincerely wish to cooperate constructively with Pamplona and we will continue to focus on protecting the jobs our investments support while distributing the $150m of aid we have pledged for relief for the victims of the war in Ukraine.”

Pamplona, which oversees $11bn in assets, invests majorly in Europe and North America with a focus on mid-market deals.

Dutch convenience food company Signature Foods, Danish IT components distributor EET Group, and British pest control specialist Pelsis are amongst some of the major companies controlled by the firm, according to a report by Reuters.