Roman Abramovich’s very bad year of losses, forced sales and moored superyachts

Those impacted, such as LetterOne founders Mikhail Fridman and Petr Aven, held significant portions of their wealth outside of Russia, including in private equity or property. The declines go beyond just money.

Loading

“The influence that these elites once had abroad is waning, and their options regarding where to park their wealth have become increasingly more limited,” said Liana Semchuk, a Eurasia intelligence analyst at advisory firm Sibylline in London. “The haven that many European jurisdictions offered no longer exists in the same way, and ultimately this means that their wealth is no longer so safe outside of Russia — where it has always largely been at the mercy of the Kremlin.”

The declining fortunes of Russia’s elite highlights the squeeze they’ve largely faced from Western nations and their allies.

But the reality is nuanced. Some of the losses are smaller than those suffered this year by tech billionaires including Elon Musk or Mark Zuckerberg.

Russia’s richest person, Vladimir Potanin, the biggest shareholder of mining giant MMC Norilsk Nickel, has expanded his empire in 2022, snapping up Rosbank from Societe Generale.

Over the year, his fortune has barely been dented. He was sanctioned by the US earlier this month, but the Treasury Department didn’t place restrictions on Nornickel, the world’s largest producer of refined nickel and palladium, in an effort to maintain stability in the metals market.

Potanin, worth $US28.5 billion, fared significantly better than Oleg Tinkov, who in April published an expletive-filled post about Russia’s “insane war” on his Instagram page.

Tinkov told The New York Times that after the post he was forced to sell his family’s stake in Tinkoff Bank for just 3 per cent of its real value. The buyer: Potanin’s Interros Capital.

While Tinkov said criticising the war caused him financial harm, it’s unclear sanctions on billionaires are having an impact on Putin more than 10 months after the invasion.

Loading

“The war has definitely not weakened the state’s control over the oligarchs,” Semchuk said. “Their influence over Putin continues to be largely overestimated by the West.”

For Abramovich, life now revolves around the Gulf, Turkey, Moscow and Israel, where he holds citizenship. This year, he was reportedly house hunting in Dubai and Turkey, and his superyachts — the Solaris and Eclipse — are parked off the Turkish coast.

While the crackdown from sanctions has chilled their global lifestyles and investment opportunities — Fridman, who was worth about $US14 billion before the war, said this year he essentially had no cash — Russia’s billionaires remain incredibly wealthy.

“Taken as a group, these guys are down,” David Lingelbach, professor of entrepreneurship at the University of Baltimore, said about Russia’s super-rich. “But they’re far from out.”

Bloomberg

The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.