Sunday, 31 May 2009

Troika Dialog Managers Leave Firm; Layoffs on Tap


May 29, 2009


Two senior managers have left Troika Dialog after a tumultuous nine months for the Moscow-based financial group that included a collapse in Russian stock prices and the sale of a stake to Standard Bank Group Ltd. in March.

The chief executive of Troika Dialog's U.K. business, Howard Snell, has resigned. Giedrius Pukas, the managing director of Troika Capital Partners, the group's alternative-asset-management division, is leaving with a senior team to launch his own firm, according to the bank.

Mr. Snell resigned from Troika this week but will remain on the board of directors of the U.K. business for a couple of months. He said he would take the next months off to assess his options. Two people close to the situation said his departure wasn't connected to a Troika program to reduce its head count.

Mr. Pukas, who is leaving along with two colleagues, joined Troika in early 2004 and said he was leaving with a senior team to set up an investment and private-equity firm called Quadro Capital Partners.

His responsibilities as managing director and chief investment officer of Troika Capital Partners are to be divided between Mikhail Broitman, managing director of the strategic-projects division, and Kanako Sekine, who joined as chief operating officer last year.

A spokeswoman for Troika Dialog said, "Troika Capital Partners initiated a separation with Giedrius Pukas. As a result of a semiannual performance review of staff, a number of Troika Dialog group employees were terminated as well."

She added that following the review, performed from March to April, the bank had separately decided to make a "small number" of cuts and will announce several senior appointments in London and New York imminently. At the start of the year Troika revealed plans to cut 25% of its total head count, although the bank now says the layoffs are likely to reach 30%.

Troika Dialog entered a strategic alliance with Standard Bank in March after selling a 33% stake for $200 million and is reorganizing its business lines to integrate it with the South African bank's Moscow-based operations. It is still awaiting regulatory approval before it can work as a joint team. Standard Bank has its own private-equity team in Moscow, to be integrated with Troika Capital Partners, which has about $2.3 billion in funds under management in private equity and venture capital.

Monday, 25 May 2009

Goldman Banker Makes Exit as Hiring in Moscow Picks Up

Wall Street Journal Europe

May 22, 2009


MOSCOW -- Goldman Sachs Group Inc.'s head of mergers and acquisitions for oil and gas in Russia has become the second senior executive this month to quit the bank's Moscow business, as resurgent rivals in the country start rehiring.

William Donovan is leaving Goldman Sachs to join Deutsche Bank AG in Russia for a similar role. Mr. Donovan joined Goldman Sachs in 2007 having spent more than seven years at U.S. brokerage AG Edwards, which is part of the Wells Fargo banking group.

Goldman trimmed its headcount in Russia by 10% last year after the financial crisis spread.

A spokesman for Deutsche Bank in Russia confirmed Mr. Donovan had joined recently to take up a similar position covering the energy sector. Deutsche Bank said it was "hiring selectively" and had never put a freeze in place unlike many other banks in Moscow.

However, investment-banking hiring has picked up in Moscow with Russia's VTB Capital, part of VTB Group, leading the way. Morgan Stanley, Nomura, Barclays PLC's investment-banking arm Barclays Capital and Troika Dialog are actively hiring or trying to fill selected positions, according to local headhunters who have been tapped for executive searches.

A Goldman Sachs spokeswoman in London couldn't be reached for comment.

Thursday, 21 May 2009

Renaissance Investment's Remaining CEO Is Departing

Wall Street Journal Europe

May 20, 2009


Rod Barker, the U.K.-based chief executive of Renaissance Investment Management, is quitting the Russian fund manager at the end of the month.

Mr. Barker's exit from Renaissance follows the departure of his Moscow-based co-chief executive, Andrei Movchan, in February following a disagreement with RIM's parent, Renaissance Group, over the firm's strategic direction.

Mr. Movchan had been sole head of the division from its inception in 2003 to 2007, when Mr. Barker was hired from London-based hedge fund RAB Capital to take up the role of co-CEO. Mr. Barker is to be succeeded by Brian O'Callaghan, chief operating officer of RIM UK.

"I'm leaving with effect from the end of May to pursue other opportunities," Mr. Barker said. "I'm not yet in a position to disclose what I'll be doing."

Renaissance confirmed Mr. Barker's immenient departure.

The exit of Mr. Barker, a regular on London's television social circuit, coincides with a clearout of its top executives. The Renaissance Group, which includes RIM and the investment bank Renaissance Capital, has cut its staff by 40% since the banking crisis hit Russia late last year. Staffing in their London office had been cut to 71 at the end of April, from 151 a year ago.

Mr. Barker, previously head of prime brokerage of Credit Suisse First Boston, was responsible for building RIM's international distribution and the development of funds focusing on the Middle East, North Africa and South Asia.

RIM, which focused on high-net-worth clients, had built up assets under management to $6 billion by early 2008. Those assets have since fallen due to client redemptions and a drop in stock prices. It managed It had $3.7 billion in assets as of January 1 2009, according to the group's Web site.

Sunday, 17 May 2009

JP Morgan names Russia investment banking chief

Financial News

Jason Corcoran in Moscow
15 May 2009

Jeffrey Costello, chief executive of JP Morgan in Russia, has taken over as head of investment banking in Moscow following the surprise departure of Natalia Tsukanova to take up a role as an adviser to the Kremlin.

JP Morgan said Costello had taken over Tsukanova’s duties temporarily following her departure last month to advise the Russian government on it foreign acquisition plans.

Investment banking sources said Tsukanova had been tapped by Igor Sechin, deputy prime minister and energy giant Rosneft chairman, to advise the government on foreign acquisitions in the oil and gas sector.

“Tsukanova was with JP for 12 years and wanted to try something new. This was an offer she felt she couldn’t refuse,” said a banker close to the situation.

A Moscow spokeswoman for JP Morgan said Costello was taking over until a suitable replacement could be found. It was too early to say whether internal or external candidates will be sought.

Tsukanova’s investment banking team has had a good run over the past few years. Its bankers acted as joint bookrunner on the $10.7bn (€7.9bn) flotation of Rosneft and was one of the two international placement agents for Sberbank’s $8.8bn flotation. It has traded leading M&A adviser status in Russia with Credit Suisse over the past three years.

Russia’s capital markets have quietened down this year compared to the boom in mergers and acquisitions last year. JP Morgan is the second leading adviser for the year to date, having advised on two deals worth $7.5bn. In 2008, JP Morgan advised on eight deals during the entire year worth a total of $18.1bn.

Costello was hired in March last year as JP’s first Moscow chief executive. He spent five years as chief executive of UBS' Moscow-based investment banking joint venture UBS Brunswick until taking time out of the banking industry in 2004.

Medvedev makes his mark

The Guardian

Comment is free

A year after his arrival, measures from the Russian president suggest a power shift in the Kremlin, and an era of glasnost-lite

By Jason Corcoran

Comments (31) Tuesday 12 May 2009 20.30 BST

A new era of glasnost sponsored by the Russian president, Dmitry Medvedev, is casting light into some of the darkened corridors of the Kremlin. Medvedev has recently made a string of striking public outreach gestures and this week signalled he could ease political restrictions imposed by his predecessor Vladimir Putin.

Some of the measures hark back to the late 1980s when then USSR president Mikhail Gorbachev first announced a policy of glasnost, which translates as openness or transparency. Gorbachev's policy of glasnost, along with his restructuring of the economy and the political system, ushered in a momentous period of change and turmoil, which ultimately led to the break-up of the Soviet Union. Many of the post-Soviet freedoms were subsequently rolled back during Putin's eight-year reign.

A year on from his inauguration, the substance of Medvedev's presidency is beginning to synch with the mood music.

Earlier this week, Medvedev said the 7% threshold for political parties to win seats in the State Duma may be lowered.

Putin had introduced the threshold in the wake of the 2004 Beslan hostage massacre arguing the need to preserve the integrity of the state. The ruling meant that only four political parties – none of them opposed to Putin – surpassed the 7% threshold in the parliamentary elections of December 2007.

Like Gorbachev, Medvedev is a trained lawyer and his pledge last May to eradicate "legal nihilism" no longer seems utterly hollow.

Federal and regional politicians, along with and security figures embroiled in scandals over the last few months, are actually being held to account. Under Putin's reign, many scandals were raked over and the figures would be allowed to carry on as if nothing happened, as long as the party line was toed.

For example, when photos surfaced of a January helicopter crash in Siberia that appeared to involve government officials on an illegal hunt, wildlife campaigners assumed the Kremlin would hush up the incident. Yet state-run media covered the story, a senior official in the region resigned and federal prosecutors investigated.

Another example last month was a decree by Medvedev dismissing Police Colonel General Vladimir Pronin, head of the Moscow directorate of the interior ministry. Pronin had described a police major guilty of a drunken killing spree in a supermarket as "a good professional".

In politics, there is a mountain to climb before Russia's centralised and authoritarian system of "sovereign democracy" breaks down like its Communist forerunner.

Opposition candidates suggested that local officials had fixed the recent mayoral elections in Sochi, the venue of the 2014 Winter Olympics. The Kremlin-backed candidate Anatoly Pakhomov won a landslide victory. Challengers had little space to campaign; local television blacked out news coverage and advertising of opposition candidates. Seven candidates were disqualified due to clerical errors, but at least liberal leader Boris Nemtsov was allowed on the ballot. Opposition figures couldn't get on the ballot during last year's presidential elections.

In the courts, the former head counsel of Yukos, Svetlana Bakhmina, was released on parole in April after being locked up as a young mother years earlier. In the trial of her former boss, Mikhail Khodorkovsky, spectators were surprised when Kremlin opponent Gary Kasparov appeared and publicly blasted the prosecutors. Khodorkovsky's fate, however, is likely to be another stretch for the same tax evasion and fraud charges that he was charged with in 2004.

Gorbachev allowed human rights dissident Andrei Sakharov to return to Moscow in 1986 from his forced internal exile in a move that showed the world that the regime had changed. It would be unthinkable for Medvedev to make such a move as long as Putin remains sitting on his shoulder as the all-powerful prime minister.

There are signs though in the Kremlin that the balance of power could be tipping more to the liberal faction and away from the statists and secret service henchmen. Charges against deputy finance minister Sergei Storchak of embezzling $44m in state funds have been dropped in a case widely perceived to be politically motivated and part of a power struggle between finance minister Alexei Kudrin and Igor Sechin, deputy prime minister and chairman of oil giant Rosneft.

Kudrin, the leader of the liberals, triumphed in the battle over the country's purse strings having argued for steep budget cuts as Russia readjusts its spending plans amid falling oil revenues, which is at odds with the security services' desire for increased funding for defence-related industries.

Russia's small liberal press and its NGOs are enjoying something of a revival under the new regime. Medvedev recently gave a full press interview to liberal paper Novaya Gazeta, his first one-on-one interview to any Russian newspaper. Another departure has been regular meetings with the leaders of Russian NGOs and human rights activists, with the full transcript of meetings and occasional critiques of Kremlin's policies published on the president's site.

Nobody knows how far this glasnost-lite will go. It may just be for the timeline of the crisis or until his mentor Putin decides Medvedev's usefulness has expired.

VTB puts recruitment back on the cards

Financial News

Jason Corcoran in Moscow
14 May 2009

VTB Capital, the investment banking arm of Russia’s state-controlled VTB Bank, has put hiring back on the agenda, recruiting two senior sales executives from Deutsche Bank and Goldman Sachs after putting in place a recruitment freeze last year.

The bank has hired Andrey Yumatov from as Deutsche Bank as head of fixed income and deputy head of fixed income trading, while Michael Capone has joined from Goldman Sachs in Moscow as executive director of equity sales.

At the end of 2008, VTB introduced a hiring freeze across the group and a number of cost-cutting measures, including the postponement of the move to new headquarters and headcount reductions in some VTB businesses.

A Moscow spokeswoman for VTB Capital said the investment bank was hiring selectively and the move to its new offices in the emerging business district of Moscow City was back on the cards.

Yumatov was head of global debt capital markets and financial sales at Deutsche. He was previously a member of the board at UniCredit Bank supervising financial markets and investment banking services. Capone had been an executive director at Goldman Sachs since December 2007 and had also spent three years at Deutsche Bank in Moscow as a vice-president in equity sales.

VTB also recently boosted its research team by hiring Wiktor Bielski as global head of commodities research from Morgan Stanley, where he was head of European metals & mining research.

In late March, VTB took a 20% stake in Moscow brokerage Otkritie, on which it might now try to build. Data provide Dealogic last year ranked Otkritie ninth among the largest M&A advisers by volume of transactions in Russia and Eastern Europe. In 2008, the company advised on 49 deals worth of $12 bn in the region.

Yuri Soloviev, global chief executive of VTB Capital, said the investment bank had claimed a strong position in fixed income trading over the past year.

VTB Capital was launched in April last year as a full service investment bank and grew quickly to over 500 employees by the end of the year.

Its three main hubs operate from Moscow, London and Singapore while new sales and representative offices have been opened in Dubai and New York.

Ryan scales back Deutsche duties for VC firm

Financial News

Jason Corcoran in Moscow

05 May 2009

Charlie Ryan, one of the highest profile bankers in Moscow, has scaled back his duties as chairman of Deutsche Bank Russia after joining a new venture capital firm Almaz.

Ryan, who founded one of Russia’s first investment banks, UFG, in 1994, has been focusing on managing private equity since stepping down last year as country head and chief executive of Deutsche Bank in Russia. Ryan had stayed on as non executive chairman following the arrival of Igor Lojevsky in August last year to replace him.

Deutsche Bank said Ryan continued to hold the position as non executive chairman despite his commitments to Almaz and UFG Asset Management.

Almaz, which has offices in Moscow and Silicon Valley, is backed by technology group Cisco Systems and UFG Asset Management, which Ryan co-founded with Boris Fedorov in 1996.

Almaz, which raised a $60m fund with Cisco as the anchor investor, had made its first two investments in an internet telephony firm Apollo Project and computer software provider Parallels. Ryan is a partner and works in its five-member investment team.

A Deutsche Bank insider said Ryan commutes from Philadelphia in the US and concentrates on UFG’s private equity and venture capital investments. Ryan remains a chairman at UFG, which has about $1bn (€750m) in assets under management.

In 1998, UFG sponsored an early-stage technology investment company called ru-Net Holdings, which invested in Yandex, Russia’s leading search engine and Ozon, the of Russia.

Ryan is believed to have made the biggest personal fortune of any foreign banker in Russia. He masterminded the 40% sale of UFG investment bank for $70m to Deutsche in 2004, and the remaining 60% for a reported $600m in 2006. Last year, Ryan and Fedorov collected about $65m following the sale of a 40% stake in UFG Asset Management to Deutsche.

Ryan told Financial News two years ago that his role of integrating the Russian economy with the west was “God’s work”.