Roman Abramovich’s London empire unravels as sanctions bite

The oligarch is also unable to sell his stake in Evraz, his biggest listed asset before the conflict. Shares in the company, which was sanctioned by the UK in May, had slumped 87 per cent this year before being frozen soon after he was put on the government’s list.

Abramovich now has a net worth of about $US10.7 billion, a drop of 40.5 per cent this year, according to Bloomberg’s wealth index.

Rebuild elsewhere

“Even in the unlikely scenario that sanctions are lifted, it’s going to be very difficult for him to find a way back into the UK and European Union,” said Liana Semchuk, a Eurasia intelligence analyst at advisory firm Sibylline in London. “He may need to rebuild his empire elsewhere.”

Abramovich began acquiring his London investments in the early 2000s after amassing a fortune from the sale of privatized assets acquired from the former Soviet Union, including oil giant Sibneft.

He set up the London branch of his family office, Millhouse, in late 2001 and sent his children to school in England. He also acquired a London penthouse, a Sussex estate and Belgravia homes. His UK visits grew more frequent after buying Chelsea in the same year he sold the bulk of his aluminum assets to fellow oligarch Oleg Deripaska.

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“He revolutionised football because he was the first overseas owner to get involved in a football club as a trophy asset,” said Kieran Maguire, a lecturer in football finance at the University of Liverpool. “He set the tone for what’s followed.”

Outside of the UK, Abramovich’s assets include homes in France and Russia as well as superyachts and private jets, which are now the subject of a legal fight in the US over alleged sanctions violations. In addition, he provided most of the $US6 billion behind Concord Management, which he used to invest in more than 100 hedge funds and private-equity firms that are struggling to offload his capital.

The US Securities and Exchange Commission and the Federal Bureau of Investigation have been probing Concord, focusing in part on how Abramovich’s associates used offshore shell companies to make those investments, the New York Times reported on Tuesday, citing people close to the firm. The separate inquiries are in early stages and no charges may result, the newspaper said.

Safer waters

Abramovich moved two of his yachts to Turkish waters after the invasion to avoid possible asset seizures in Europe. He’s also been house hunting this year on Dubai’s exclusive Palm Jumeirah, people familiar with the matter have said, while his private jets have remained in Dubai or Moscow since March.

Early in the war, Abramovich met with Putin and got the president’s approval to pursue peace talks, two people with knowledge of the situation have said. Abramovich was said to have been initially optimistic about prospects for an agreement, despite suffering a suspected poisoning attack after discussions in Kyiv in early March.

The talks subsequently stalled, though the countries have moved forward on some diplomacy, reaching a deal last month to help shore up global food supplies.

“The role he took in the peace talks showed how much he had to lose in the UK and Europe for his investments,” Semchuk said. “It was risky at the same time as it did confirm he had close links with Putin because he was one of the trusted individuals to take part in the talks.”

Abramovich built up investments over the past decade in smaller London-listed businesses, including clean fuels technology companies Velocys and AFC Energy.

World citizen

He began unwinding some of those bets after he faced delays renewing his British visa in 2018. Abramovich obtained Israeli citizenship that year and shelved plans for a new Chelsea stadium. In 2021, he became a Portuguese citizen under a law offering naturalisation to descendants of Sephardic Jews who were expelled from the Iberian Peninsula. Portugal has opened an inquiry into the decision.

Back in London, his appearance at Chelsea matches became less frequent, with the club having no record of Abramovich using corporate hospitality boxes from 2018 to 2021.

“I think he initially thought owning the club would be a bit of fun,” Maguire said. “It was noticeable how the relationship changed in the past four or five years.”

Meanwhile, Chelsea has moved on without Abramovich, defeating Everton 1-0 on Saturday in its opening match of the English Premier League season. It will have its first home game at Stamford Bridge on Aug. 14.

“He is now even more dependent on Putin as the sanctions are re-routing him back to Russia.”

Abramovich acquired his mansion in Kensington Palace Gardens — near the Duke and Duchess of Cambridge’s official residence — for about £90 million pounds in 2009. He’s since carried out extensive renovations to what was once a Soviet embassy, including filling in its underground swimming pool to create more space for staff.

On a recent weekday afternoon, there were few signs of activity at the house, other than a gardener in green overalls watering flowers near the entrance. No vehicles were parked along its sweeping stone drive. Unlike neighbouring properties, all of its curtains and blinds were fully closed.

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“The sanctions were meant to create discontent among oligarchs like Abramovich and make them put pressure on Putin,” said Sibylline’s Semchuk. But with London closed off to him, “he is now even more dependent on Putin as the sanctions are re-routing him back to Russia.”

Bloomberg

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