Russia’s wealthiest have held an iron grip on their assets since the Soviet Union’s collapse, defending their fortunes from rivals or bureaucrats.
Now they face pressure to cede some control as they prepare for a transfer to the next generation and executives running their businesses push them to professionalize the management of their wealth.
“Even five to seven years ago, the main task was to protect assets rather than effectively manage them,” said Confideri co-founder Marat Savelov, who’s based in Singapore and works with families from Russia.
Today, there are about 100 single family offices in Russia and as many as 20 multi-family offices, according to data compiled by Bloomberg. Such firms typically tend to investments, taxes, estate planning and even personal needs such as travel and education. Dozens of new ones will be created in the next five years, said Andrey Narutskiy, managing director of Cyprus-based Leon Family Office, which was set up in 2013 and caters to ultra-high net worth clans.
‘A Mess’
Some of the wealthiest Russians have already created the institutions. Ruben Vardanyan, chairman of the expert council of Skolkovo Wealth Transformation Center, was a trailblazer with Quinta Capital Partners in 2002.
Russian tycoons -- almost all of them men -- have focused on accumulating assets and often don’t separate personal property from their core business in terms of management or corporate structure.
“Very often there is a mess,” said Confideri co-founder Olga Raykes.
Little thought has been given to transferring wealth to the next generation, which isn’t surprising given that these fortunes have only been created since the collapse of the Soviet Union. In Western Europe and the U.S., some families have been managing their wealth through family offices for multiple generations. The Rockefeller family set up one of the earliest version in the 1800s.
Russia has enjoyed it’s own version of the gilded age in the past two decades.
The 23 Russians on the Bloomberg Billionaires Index, a ranking of the world’s 500 wealthiest people, are worth a combined $253 billion. At least 189,500 ultra-high net worth individuals live in the country and control about $1.1 trillion, according to Capgemini estimates.