Renaissance Capital Reveals Global Wealth Management Ambitions

Wealth Briefing

June 12, 2007

Jason Corcoran in Moscow


Renaissance Capital, the Russian investment bank, is planning to open offices in Dubai, Singapore and Hong Kong to service its fast growing wealth and asset management business.

Its expansion overseas is underpinned by a conviction that Russian private investors will want to diversify their portfolios and invest more abroad amid uncertainty ahead of next year's presidential election.

The move to set up operations in Asia and the Middle East follows the opening of an operation in Geneva, as revealed by WealthBriefing in April.

Stephen Jennings, the chief executive of Renaissance Capital, said the push overseas stemmed from existing Russian and CIS clients demanding access to international financial markets.

In an exclusive interview with WealthBriefing, he said: "Clients within Russia and CIS want international assets, international custodian and wealth management services. As we go into other geographies, we will sell those same products to local clients in those markets also. It's about giving really tailored wealth management products to high networth Russians, Ukrainians, Kazakhs and so forth."

Renaissance's fund arm Renaissance Investment Management is Russia's market leader with almost $4.5 billion in assets under management. Jennings said more than half of assets were accounted for by high net worth clients.

Domestically, Mr Jennings welcomed the arrival of global wealth management players but suggested their strategy might not hit the mark.

He said: "UBS and Credit Suisse are tailored towards a global business. They would say otherwise but their product is quite standardised. What we are dealing with in Russia is a completely new class of wealthy people. They are used to exceptionally high levels of service in other areas of their lives. They are not getting that highly tailored and high-end service from someone who is a generic wealth provider."

Mr Jennings argued Renaissance can provide a both high end service to its clients and the best products through white-labelling.

He added: "It's not a option for us to give people anything but Rolls-Royce service. International products are all available through white-labelling and open architecture so there is nothing by way of product that an international bank can provide that we can't. What we can do that is different is the tailoring of products, including domestic products, the location of service and the whole nature of the relationship."

Renaissance said it provides clients with a high level of service, an individual approach and flexibility in the management of their investment such as a no redemptions fee policy.

The company targets the top segment of the market and clients with a minimum investment size of $1 million. Actually, the average account size is in excess of this, at over $6 million, while the largest single account is just above $100 million.

Mr Jennings left CSFB to launch Renaissance Capital in 1995 and took control of the firm in the turmoil following the Russian debt crisis in 1998.

He has since transformed Renaissance into Russia 's first full service western-style investment bank and it has since gone from strength to strength, riding the wave of foreign investor interest in the country.

Mr Jennings, who has a controlling stake in the business rumoured to be worth $2 billlion, has rebuffed interest in his business from Western banks and state-owned VTB. He has said selling out would ruin the bank's reputation for providing clients impartial and independent services.

Renaissance recently launched its investment bank in Sub-Saharan Africa. Asset management and wealth management services will follow in time, according to Mr Jennings.

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