Mikhail Prokhorov, the country’s wealthiest man, will pool funds with three other billionaires into his MFK Bank to chase distressed banks and firms, creating an unusual war chest for some of Russia’s most aggressive portfolio investors, the lender said Tuesday.
MFK said it would get three new shareholders: Suleiman Kerimov, a co-owner of Polyus Gold; Alexander Abramov, a co-owner of Evraz Group; and Viktor Vekselberg, a shareholder in United Company RusAl and TNK-BP.
The combined wealth of the four tycoons was estimated at about $19 billion by the Russian edition of Forbes magazine earlier this year, and some of this money is real cash.
“Active work on solving Russian firms’ debts and offering help to the state to restructure the national banking system have a special place in our new strategy,” MFK’s chief executive, Alexander Popov, said in a statement.
Prokhorov, also a stakeholder in RusAl, is worth $9.5 billion, down from $22.6 billion in 2008, according to Forbes.
While many of his Russian peers sought state bailouts, Prokhorov, also a former banker, is flush with money after cashing out of assets in 2008 before the global crisis.
Kerimov was one of the top investors in state-run banking and energy majors, such as Sberbank or Gazprom, but later reduced his stakes to buy into Western banks — just before the crisis wiped out most of their value.
Ranked Russia’s 13th-richest man, with $3.1 billion, Kerimov has also never asked for a direct state bailout like his peer Vekselberg, whose empire also includes large stakes in Swiss technology group Oerlikon and Swiss engineering group Sulzer. He is worth $1.8 billion.
The only one of the four who has received direct state funding during the crisis is Abramov, whose Evraz has already repaid part of a $1.8 billion loan to the state. Forbes rated Abramov sixth in May with $4.4 billion.
Sources close to the bank said the billionaires planned to turn MFK into a top Russian private banking player.
“Should the deal materialize, it will open the doors wide for a flood of new clients. New shareholders are also likely to partly move their financial operations to the bank,” said one source, speaking on condition of anonymity.
MFK also said in a statement that Prokhorov had invited Sergei Chemezov, head of state corporation Russian Technologies, which owns assets in the defense and auto-making sectors, to join the board of directors.
“We will invite people able to bring additional unique expertise in corporate management and work with distressed assets into the board,” the bank said.
Prokhorov started the banking business last year, just before the country’s worst financial turmoil in a decade. He has said he aims to build a private-banking business with $10 billion under management within three years.
Analysts estimate the private banking market in Russia, currently dominated by international players, at between $15 billion and $30 billion. They said the country’s rich are now more optimistic about pouring their money back into equity markets.
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