Why Russia Can Afford to Jail U.S. Investors
Michael Calvey founded Baring Vostok, a major private equity fund in Russia, but the Kremlin doesn’t need people like him anymore.
Michael Calvey, founder of private-equity firm Baring Vostok Capital Partners, sits during a hearing at the Basmanny District Court in Moscow, Russia, on Saturday.
Photographer: Andrey Rudakov/BloombergThe arrest of Michael Calvey, a U.S. citizen and one of the biggest private equity investors in Russia, sends two messages to foreign investors: The rules of the Russian business jungle apply even to those who do things by the book – and neither foreign citizenship nor a stellar investment record are grounds for an exemption. The Kremlin appears happy to underline both.
Calvey founded Baring Vostok Capital Partners in 1994. Among its most notable investments was Yandex, Russia’s most popular search engine. The private equity firm paid $5.3 million for a 36 percent holding in 2000, a stake that was valued at about $2.9 billion when the internet company went public in 2011.