In town for the Russian Economic Forum earlier this week, Ruben Vardanian, chief executive of Troika Dialog, the Russian investment bank, is a model of relaxation concerning the controversy surrounding the event – from which Russian business leaders and officials abruptly pulled out, apparently on Kremlin orders – and about the prospects for Troika in the years to come.
As far is he is concerned, he’s happy to go to conferences and forums in Moscow, St Petersberg, London, New York, and probably anywhere else to promote Russia as a place to do business.
Notwithstanding the mounting political risk ahead of elections at the end of this year and into next, rising disposable incomes and increasing investment in infrastructure have prompted renewed interest in doing business in Russia – with the large investment banks returning to the country, in some cases after a long absence.
When asked about Troika’s position, often flagged up as a takeover candidate for a bank looking to buy expertise and a ready-made business in Russia, and beset by increased competition as western banks rebuild their presence in the the country, he is equally laid back. He points to the bank’s rare regional presence – with offices in 12 major Russian cities – and strength in private banking, adding “of course, we have some threats, some competition…but for the next 5 years I feel very comfortable.
“Maybe we’ll buy someone; maybe someone will buy us,” he says, adding that an IPO within the next two years is also under consideration as a means to raise capital and to up the company’s visibility and profile. “You need to be open for all decisions….the biggest happiness of a person is to have freedom of choice.”
Mr Vardanian describes the behaviour of the western banks now scrambling to make their mark in Russia as “crazy” – namely accepting close to zero per cent in fees for transaction such as IPOs, “just to get a mandate, just to get market share,” says Vardanian. “It’s part of the global competition we are now facing. We’re not doing that. We compete and try to show clients that it is better to pay and get good service.”
The traffic, though, is not just from west to east. A steady flow of Russian companies have listed, or are hoping to list, in London – prompting concerns about standards of corporate governance, especially for those joining the market though a regulation-lite listing of GDRs.
Troika was one of the banks that walked away from the London IPO of Cherkizovo, a Russian meat producer, last year. That was an isolated case, says Vardanian – the bank’s withdrawal coming after disagreements over the company’s valuation. But he expresses wider concerns that Russian companies are looking to the London market unnecessarily, in the hope of a higher valuation – and that companies may be eyeing the public markets prematurely.
“They think an IPO is the end of the story; actually it’s just the beginning of the story. They want to go to the market without realising [they] have to be ready for it.”