Saturday, 19 September 2009

Renaissance Investment founder raids firm for new venture

Wall Street Journal Europe

September 4, 2009

By Jason Corcoran

Andrei Movchan, the founder and former chief executive of Russian fund manager Renaissance Investment Management, has recruited 20 personnel from the firm he launched to help set up a new wealth management business.

The firm name, Third Rome, alludes to Movchan's previous roles at Renaissance and Troika Dialog and also to what he describes as Russia's third cycle following the 1998 default and last year's banking crisis.

In an interview with Financial News, Movchan said the firm had hired a total of 30 personnel and had already won $200 million in client assets from Renaissance.

He said: ???In the private client world, the conversion rate is usually 100% because people like to stick to advisers they trust. There will be hurdles but expect we will have a very high ratio of clients defecting to us from Renaissance over time."

Movchan had been sole head of RIM from its inception in 2003 to 2007, when Rod Barker was hired from London-based hedge fund RAB Capital to take up the role of co-chief executive alongside him.

Movchan quit in February this year after the disagreement with the founder of parent group Renaissance Capital Stephen Jennings over the strategic direction of RIM. Jennings had wanted RIM to become a diversified asset manager involved in retail, institutional and international funds while Movchan wanted to focus on the high net worth segment.

Third Rome will focus exclusively in discretionary asset management accounts for high net worth clients and will steer clear of mutual funds and pension fund management, which Movchan believes are negligible. Clients will require a minimum of $1 million to invest.

"We are going to focus on discretionary management accounts rather than setting up funds. Clients want liquidity rather than additional legal structures. We will set up funds at a later stage," Movchan added.

Danilo Lacmanovic and Alexander Granovski have both been hired as senior partners of new firm. Lacamanovic worked at Renaissance for almost five years and latterly as a director advising high net worth clients and corporates, while Granovski worked at Renaissance for third years on discretionary client programs for high net worth individuals.

Other arrivals from Renaissance include business development director Dmitry Zhuk and Max Yanpolsky, who has joined as chief operating officer and chief technical officer.

RIM, which focused primarily on high net worth client referrals from Renaissance Capital, had built up client assets to $6 billion by early 2008.

Those assets have since fallen due to client redemptions and a fall in equity valuations. It has assets of $3.6 billion as of January 16, 2009.

Renaissance declined to comment.

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