Half of Russia's Richest People Are Planning to Cash Out
It’s been a quarter century since the fall of the Soviet empire triggered one of history’s greatest wealth transfers. Now bankers are preparing for another as Russia’s first generation of capitalists makes way for the next.
Confidential surveys of dozens of millionaires and billionaires conducted since European and U.S. economic sanctions began last year show Russia’s wealthy are finding little support within the country’s legal framework to pass down businesses. A majority say they’re taking the issue of succession seriously for the first time.
“Owners of major enterprises are basically hostages,” said Alena Ledeneva, a professor of politics at University College London, who has studied the workings of power networks in Russia for two decades. “They can suggest their kids as hostages to take their place, but only Putin’s system will decide whether to incorporate them or not.”
Family DynastiesThe result could be a surge in transactions for Russian businesses in coming years, according to Phoenix Advisors, a Moscow-based investment firm that helps entrepreneurs navigate succession and transition planning challenges.
Half of the respondents to a PricewaterhouseCoopers LLP study released in 2014 said they plan to sell their holdings, more than double the global average. More than half the respondents to a survey from the Moscow Skolkovo School of Management Wealth Transformation Centre that was released in February believe that "large Russian companies will not become family dynasties."
The PwC study surveyed 2,484 executives and directors in 40 countries, including 57 in Russia. The Skolkovo survey surveyed 39 Russian business leaders. The center is based in a tech and educational hub in Moscow championed by Prime Minister Dmitry Medvedev and supported by billionaires Viktor Vekselberg, Roman Abramovich, Alexander Abramov and Petr Aven, who are part of its affiliated experts group.
President Vladimir Putin’s spokesman Dmitry Peskov didn’t respond to requests for comment....MORE