“I am looking at how my father talks with other people,” Mikhail Yakobachvili said at the family’s headquarters, where the pair have neighboring offices.
This attempt at a succession strategy is out of step with most moneyed Russians. When asked to identify the critical challenges to their businesses, 61 percent of owners cited “government and regulation,” almost double the average in PwC’s survey. Limiting property rights is a defining characteristics of “Putin’s system,” according to University College London’s Ledeneva.
There are some 60,000 business owners who will grapple with the transfer dilemma over the next several years, according to Ruben Vardanyan, chairman of the expert council for the Skolkovo center. Vardanyan, who sold Troika Dialog investment bank to state-run Sberbank for more than $1 billion in 2011, created Phoenix Advisors this year to help entrepreneurs navigate ownership changes.
“Few Russian business owners are thinking of transferring their assets to the next generation, so selling is on their agenda,” Phoenix Advisors Managing Director Alexey Stankevich said. “We expect this to trigger a surge in M&A.”