The US-owned private equity giant Blackstone is “giving up on Russia,” cancelling its future plans in the country and firing its in-country consultants, it has been revealed.
Blackstone’s Russian ambitions appear to be the latest casualty of sanctions placed by the US and Europe on Russian nationals with close links to the Kremlin. These measures have included a number of state-backed banks and industrial groups, halting many Western interests.
The firm’s co-founder, Stephen Schwarzman, joined the $10 billion government-backed Russian Direct Investment Fund three years ago, but has so far failed to make headway with deals in the country – even after Blackstone hired former ING head of investment banking Dmitri Kushaev as a senior adviser.
The ongoing diplomatic crisis, combined with Russia’s complex legal system and widespread corruption, mean that investors are increasingly shrinking from pursuing opportunities in the country. Even the European Bank for Reconstruction and Development, which has helped to launch a number of successful private equity groups in Russia over the past 30 years, has suspended its investments.
“In the good times, Blackstone couldn’t find anything to do and in the bad times, Blackstone can’t imagine doing anything,” an insider told the Financial Times.
