Prokhorov’s RenCap Touts Frontier Status Amid Russia Deals Slump

Renaissance Capital Ltd., the Moscow-based investment bank owned by billionaire Mikhail Prokhorov, is looking outside Russia after sanctions over Ukraine triggered a slump in local deals.

Russia accounted for one in 11 deals in 2014, with Kenya, Georgia, Nigeria and Uganda among markets making up the rest, according to the investment bank’s data. A year earlier, 78 percent of 27 deals were done in Russia, it said.

U.S. and European Union sanctions, imposed to penalize Russia for its alleged role in the conflict in Ukraine, have created “an atmosphere of fear,” Chief Executive Officer Igor Vayn said in an interview. The ruble tumbled 46 percent last year, the most among major currencies worldwide, and stocks had their worst year since 2008 after the penalties and tumbling crude prices drove the economy toward recession.

“It was a year full of challenges,” said Vayn, 48, in Moscow. “I spend more time abroad now than in Russia.”

Vayn returned to RenCap in 2012 after Prokhorov wrested control of the bank from its founder, Stephen Jennings. Prokhorov, who owns the Brooklyn Nets basketball team and who ran against Vladimir Putin for president three years ago, saw his fortune shrink last year as investments in companies such as OAO Uralkali, the world’s largest potash producer, took a dive amid the rout in commodities and the ruble.

Outside Russia, RenCap is focusing on hiring in the Sub-Saharan, Middle East and North Africa regions, almost a year after opening an office in Dubai. It’s also interested in Saudi Arabia as the country prepares to open its equity market to foreign investors.

Beefing Up

The company is beefing up its Russian fixed-income team after hiring former JPMorgan Chase & Co. banker Dmitry Gladkov to head its debt capital-market products team in November. The country’s bonds and the ruble had the world’s best rallies in the first quarter as oil stabilized and Putin helped reach a cease-fire in Ukraine, reducing tension in a geopolitical standoff between Russia and its former Cold War foes.

“We have the ability to go to clients and talk about the financial sector in Russia and Africa -- be it Nigeria or Kenya -- and in Turkey and in the Middle East,” Vayn said. “That’s how we made our clients interested.”

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