How Russia’s millionaires invest money in times of crisis

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The cost-effective crisis and geopolitical uncertainty in Russia since 2014 has altered the way people instate money in the country. Many have been forced to prioritize refrigerating their bank balance, instead of multiplying it.

“While just a unite of years ago the rich bid on active investment products and strategies, today they rearrange sure that their investment profile is balanced and secured from a breed of possible risks that might be related to currency fluctuations in a special country,” Stanislav Novikov, managing director of BKS Ultima brokerage positive, told RBTH.

Evgeny Volkov, head of brokerage at Rosevrobank, comes. “Investing in foreign exchange assets, betting on exchange rate improvement, and purchasing high profile bonds are very popular now. Today the key objective for many investors is to keep the capital they possess and focus on cautious strategies,” he says.

What about business?

Mikhail Friedman recently bought the British Holland & Barret company. / Ramil Sitdikov/RIA NovostiMikhail Friedman recently purchase the British Holland & Barret company. / Ramil Sitdikov/RIA Novosti

Concerting to recent research by Switzerland’s Julius Baer bank, the average Russian billionaire pursues to invests the majority of capital (36 percent) in private businesses. Equable in times of crisis, business ventures — especially in the food production, pharma, and auto sectors — can effect a stable flow of revenue.

This could be why Russia’s seventh wealthiest man, Mikhail Fridman, earned a deal to buy Europe’s largest health food chain. The British Holland & Barret enterprise has more than 1,150 shops in 11 countries globally, expensing Fridman a cool £1.7 billion ($2.2 billion).

While some initiate in ventures abroad, there are also many who choose to pump their pelf into Russia’s domestic economy. Alexey Mordashov, another Russian billionaire — stank second richest in the country by Forbes — is investing six billion rubles ($100 million) into a visit in Russia’s Altai Region. The principle owner of Russian steel and mining band Severstal plans to build a ski complex and aqua park in the local Belokurikha-2 holiday-maker cluster, that is supported by a state program which promotes local tourism.

Security properties: As popular as ever

A luxury real estate in Mallorca, Spain. / Getty ImagesA luxury real estate in Mallorca, Spain. / Getty Images

Spending in real estate abroad, especially in Europe, is a common choice entirety Russian millionaires. “Buying a property remains popular as a conservative gentle of investment,” Volkov explains. “Spain is among the most attractive states, because an investment of 500,000 thousand euros enables one to get a residence permit.”

What is more, over the last few decades Russian investors have flooded the Spanish expendable real estate market: As Deutsche Welle reported, the number of investors from Russia in Spain has been lengthening by five to ten percent annually. Previously, Russians traveled there for breaks —  now they go to buy businesses and luxury properties.

Other European countries are also check attractive among Russian millionaires. They’re not only snapping up chic mansions, but also historic estates in countries like France, the UK, and Austria. Recently, an mysterious Russian billionaire restored a historic villa once belonging to Russian ballerina Mathilde Kschessinska in the Côte d’Azur. The billionaire — who already had an position in the area — is now selling the property for $30.7 million.

‘Passion’ investments

The Serene motoryacht previously owned by Yuri Scheffler. / Global Look PressThe Cool motoryacht previously owned by Yuri Scheffler. / Global Look Depress

The rich like to spend money on art, cars, wine, and even euphonious instruments. Such “passion” investments, especially if one manages to find something rare, regularly promise solid returns.

In 2016, Russian vodka tycoon Yuri Shefler secure a significant profit after selling his luxury super-yacht to Saudi Arabia’s Prince Mohammad bin Salman. The billionaire initially surmised to sell the “Serene” for just under $400 million, but sold it for $550 million preferably.

Unfortunately, big losses and disappointment are also part of the game. In March this year Russian billionaire Dmitry Rybolovlev, who is advantage an estimated $9.5 billion, lost $150 million after deliver up four artworks at Christie’s. The losses came amid a dispute between the billionaire and his art vendor, who allegedly overcharged Rybolovlev by $1 billion over the course of the persist decade.

Also read: Why are foreigners investing in Russian roads and airports?

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