Most expensive toys of Russian moneybags
According to Swiss Appraisal, the current economic crisis affected the shopping spree of Russian moneybags to some extend – but still hasn’t suppressed their passion for expensive purchases, especially abroad.
In 2014 domestic deep pockets had spent on foreign real estate $2 billion, while in the first quarter of 2016 – only $199 million. Today the average cost of foreign properties purchased by wealthy citizens of Russia is some $308 thousand. Some acquisitions of domestic oligarchs are pragmatic or even have a social aspect, while others are nothing more than expensive toys.
In 2015 a company belonging to Mikhail Fridman, the Chairman of the Board of Directors of LetterOne Holdings and the Chairman of the Board of Alpha-Group, has purchased Pure Student Living chain consisting of five luxury hostels in London. In total, the chain has 2,100 suites and the annual cost of living there is up to £22 thousand (some 1.8 million rubles). For this money, students are offered exclusive space and beautiful design. The selection of suits would fit every taste: from studios with the living space of 17 square meters and all necessary amenities (including microwave and heated floors) to penthouses with scenic London views. Investments into British hostels are very profitable: their owners normally get 4% to 7% per annum. The current wealth of Fridman is estimated at $13.3 billion.
The former Governor of the Chukotka Autonomous District and owner of Evraz steel making and mining company had been surprising ordinary mortals by his original purchases more than once. In 2004 he bought a Boeing 767-300 at the cost of some $1 billion. The interior of the aircraft was decorated with ebony and mahogany and incrusted with gold; its equipment was comparable with that on the airplane of the US President. In 2010 Eclipse motor yacht with the length of 164 meters and cost of $1.2 billion has been built. It includes a helicopter pad, submarine bay, 16-meter open swimming pool, concert hall, wine cellar, etc. In 2011 the oligarch has purchased a home on Kensington Palace Gardens – the London boulevard of billionaires – for $140 million. The last acquisition has been made by Abramovich not for himself, but for his Chelsea Football Club (which cost him £140 million back in 2003): in 2015 he bought Stamford Bridge stadium in order to perform its reconstruction. The project includes inter alia an increase of capacity from 41 to 60 thousand seats; its cost is estimated at $650 million; and its preliminary duration is three years.
Andrey Melnichenko, the main owner of EuroChem, Siberian Coal Power Company (SUEK), and Siberian Generating Company (SGC), is a big fan of sea vessels . His A sailing yacht with the length of 142.8 meters has passed the sea testing in 2015. It is slightly smaller than the yacht of Abramovich, but its finishes and equipment are every bit as good: a helicopter pad, car garage, 3 swimming pools, water taps worth $40 thousand, and silver stair handrails. Earlier Melnichenko had a yacht with the same name – although a little bit shorter (only 119 meters) – but equipped with a rotating bed and suits for 14 guests. According to some sources, currently the billionaire is selling it. The cost to refuel the new yacht is some $500 thousand. According to Forbes, the wealth of Melnichenko is $8.2 billion as of 2016.
Sports, especially based abroad, is a popular hobby of Russian moneybags. Mikhail Prokhorov, a former candidate for the Russian Presidency, wanted to become a basketball player when he was a child – but this has not happened. To fulfil his dream, he has tried another tack. Back in 2012 Prokhorov has purchased a share in the Brooklyn Nets NBA club, and initially he used to sign up stellar players regardless of their cost. Still, Brooklyn Nets failed to become the champions. In February 2016, the businessman wrote in his letter to club fans that this purchase has helped him to understand many things – in particular, that “not everything can be bought for money” and “all people make mistakes”. Still, in 2015 his Onexim Group has acquired 100% of shares of the Brooklyn Nets NBA club and the Barclays Center, its home arena (earlier Prokhorov had owned only 80% of shares in the Brooklyn Nets and 45% of shares in the Barclays Center).
VIY Greater Europe Hospitality Fund managed by Andrey Yakunin, son of Vladimir Yakunin, the ex-President of Russian Railways, has acquired an estate in the Italian province of Umbria with the Antognolla Castle dated the 11th century. A five-star hotel with 76 suites and a residential complex of 77 premises will be created here. In addition Yakunin plans to offer the guests a 560-hectare golf course, tennis courts, conference halls, and swimming pools.
In 2014 Andrey Goncharenko, a former top manager of Gazprom Invest Yug Closed Joint Stock Company, has purchased the most expensive at that time home in the UK – Hanover Lodge located in exclusive Regent's Park and earlier owned by Conservative peer Lord Bagri. According to Daily Mail, the Russian businessman promised to spend at least £1.2 million gutting the 3,000 square meter townhouse built in 1827. By the way, the previous owner had already renovated it at huge expense and even hired Quinlan Terry, the favorite architect of the Prince of Wales, to transform it into a palatial home. Goncharenko plans to supplement gold walls, chandeliers, and floor-to-ceiling windows with a spa, with steam room, sauna, water jets, massage room, gym and yoga room, and a cinema. In the last three years, Goncharenko has also acquired three homes in prestigious parts of London: 50 St James Street, Mayfair, which sold for £70 million; a mansion in Lyndhurst Road, Hampstead, sold for £41 million; and 102 Eaton Square in Belgravia, sold for £15 million. Goncharenko has made his fortune back in the 1990s; he was involved into development business, freight services, and forestry. He had been working in the Gazprom subsidiary company for 11 years – since 2002 and up until 2013. The Investigation Department of the Ministry of Internal Affairs of the Russian Federation has initiated a criminal case against him due to a fact of extortion of more than 3 billion rubles from construction companies performing major contracts for Gazprom and an attempted illegal takeover. However, the results of this investigation are unknown.
In 2015 Valeriy Kogan, the member of the Supervisory Board of Domodedovo International Airport, has acquired a lot of 11 thousand square meters in Caesarea located at the Mediterranean shore of Israel. The cost of the purchase was $17 million; additional $100 million have been spent by Kogan to build a villa instead of five mansions standing there earlier. The villa will consist of two buildings with the total space of 5 thousand square meters – a home and a recreation center (swimming pool, exercise room, and Turkish bath). Kogan also plans to build a private tennis court. Benjamin Netanyahu, the current Prime Minister of Israel, will be a neighbor of Valeriy Kogan. Forbes values him at $2.5 billion.
In August 2016 Novaya Gazeta (The New Paper) has published an article “Secret of Princess Olga” stating that Olga Sechina, wife of the President of Rosneft, uses a yacht worth some $100 million. Igor Sechin has become the President of the company only in May 2012 (earlier he was a Deputy Head of the Presidential Administration and Vice Prime Minister of the Russian Federation). His annual salary at that period was $25 million. However, as early as in 2013, Oceanco, a Dutch builder of custom superyachts, has floated out an 85-meter yacht: steel hull, interiors created by famous Italian designer Alberto Pinto, swimming pool transforming into a helicopter pad, Jacuzzi, and spa. The name of its owner remained unknown for a long time, but then Novaya Gazeta journalists have traced strange similarities between pictures taken by Olga Sechina on a yacht and the route of St. Princess Olga luxury motor yacht. Igor Sechin has filed an anti-defamation lawsuit against the journalists. Olga Sechina had filed similar lawsuits several times in the past, but every time the court declined to examine those.
In 2015, NR Holding AG belonging to Kharitonin has acquired 99% of shares of Nürburgring, a motorsports complex located in Germany, west of Koblenz. The cost of the purchase was over $87 million. The legendary motordrome built in 1927 was on the verge of bankruptcy in 2014 – and Viktor Kharitonin saved it by purchasing 80% of its shares initially and then – additional 19% of shares. The motorsports complex includes hotels, exhibition and concert halls, repair bays, and, of course, a Grand Prix race track with the length of 5.1 km. Last time Nürburgring hosted Formula One in 2013. Kharitonin plans to return the championship to the legendary track. By the way, the Chairman of Board of Directors and Executive Director of Pharmstandard, a leading Russian pharmaceutical company, is not only a fan of motor racing, but also a participant of such events. For example, in May 2014 he participated in Mille Miglia, an open-road endurance race of retro cars in Italy, driving a black vintage Mercedes-Benz built in 1935. According to Forbes, the wealth of Kharitonin is $1 billion.
Billionaire Viktor Vekselberg has repaid loans in the amount of $1 billion taken from the Western banks. Earlier, his Renova Group had received state support from Promsvyazbank. Renova representatives say they have repaid the loan with the company’s own funds.