Ruben Vardanian, former Troika Dialog CEO: a grumbling optimist

Jack Farchy
©Anton Belitskiy

For a man once called the poster boy of Russian capitalism, Ruben
Vardanian is remarkably relaxed about the crisis erupting around him.
Sitting in his office in one of Moscow's premier office complexes,
which he also owns, surrounded by deal trophies and other symbols of
his success, Mr Vardanian's response to the rouble's collapse and the
slide towards recession is typically Russian: it has been worse.

`It's all relative,' he says, before counting off a list of Russian
economic crises of the past quarter century since the collapse of the
Soviet Union. `Looking back for 25 years being in this country I can
tell you, there are always challenges.'

The 46-year-old Mr Vardanian knows that better than most. The former
chief executive of Troika Dialog, one of Russia's leading investment
banks for the past two decades, has had a front-row seat for each of
the country's economic crises.

To some extent, Mr Vardanian can afford to be laid back. Troika was
sold in 2011 to state-owned Sberbank, Russia's largest lender; he
later stepped down from day-to-day work at the company, although he
remains an adviser to Sberbank's chief executive.

Some of his former colleagues and competitors may envy his timing:
anal - ysts expect a sharp decline in investment banks' revenues in
Russia in 2014 as equity and bond issuance has all but ground to a
halt amid western sanctions and a tumble in valuations. Many western
banks are relocating staff out of Moscow.

But Mr Vardanian rejects the idea that Russia has become a wasteland
for investment bankers.

As in 1991, when the break-up of the Soviet Union triggered an
enormous political and economic upheaval in Russia, the country is now
at another such inflection point, he says.

He remembers 1991 well, as a young man just in his twenties: `Sitting
in Moscow, I said [to myself], I have two options. One, the Soviet
Union will stay, we will go back and I will emigrate. The second
choice is that Russia would build capitalism. This is a huge

`Now 24 years later I am sitting with you and we're talking about the
same thing.'

Just as he did in 1991, Mr Vardanian is backing Russia to choose the
market-friendly path.

`Yes there will be ups and downs, yes there will be situations where
people will be upset and nervous, like happened many times in the
past, but in the end it is unstoppable [?.?.?.?] in 20 years' time
there will continue to be a market economy in Russia.'

That may seem like optimism to some in Moscow at the moment. Vladimir
Putin's return in 2012 to a third term as president has coincided with
a sharp rise in the influence of the state in Russian business.

The trend that has only been exacerbated by the latest economic
crisis, with Vladimir Yevtushenkov, one of the country's wealthiest
men, being arrested late last year and his oil company seized and
renationalised. Even though Mr Yevtushenkov was recently released, the
case has sent a chill through Moscow's business circles.

Many Russians of Mr Vardanian's generation, who came of age in the
1990s and surfed the wave of Russia's great opening up to the west,
are moving to Europe or North America. `Some of my friends want to
leave the country, some of them send their kids outside,' he concedes.

Slipping into Russian for the first and only time in our interview, he
describes himself as a vorchashcy optimist ' a grumbling optimist.

There would be no comfort in saying that the country had no future and
then being proved right, he says, as the whole world would be affected
in such a scenario. The idea that one could emigrate to Italy or Spain
and `drink good wine' free from the stresses of home would only be a
`big illusion'.

For all that, the path he has chosen suggests a recognition that the
boom times for Russian capitalism of the late 1990s and early 2000s
are unlikely to return.

Having run Troika for more than a decade before selling it, emerging
with a fortune estimated at $850m by Forbes, Mr Vardanian is throwing
his considerable energies and charm into the world of charity.

Just as he was in Russian investment banking in the 1990s, he is also
a pioneer in Russian philanthropy.

`Today in Russia is the first generation which has wealth, which needs
to leave something for the next generation?.?.?.?It's the first time
for 100 years. In 1917 it stopped, and basically you didn't have
anything to leave for your kids.'

Official statistics, he points out, say there are 230,000 Russians
earning more than $1m a year. `It's not ultra-oligarchs but if you
have a million dollars it's already big money. Do you want to spend
this money now, or do some charity? It's a challenging question.'

As with investment banking, Mr Vardanian has jumped into the world of
charity with both feet. He is providing education and services for
wealthy Russians who are wondering what to do with their millions,
setting up a business to provide services to charities as well as
engaging enthusiastically in philanthropy. He bridles at the word,
though. `Philanthropy usually means you're giving money and forgetting
about it. I am quite actively involved in the management decisions.
It's like capitalism .?.?.?Keeping all this pressure, being a tough
investment banker, but delivering results for charities.'

He has only so much time for the pledge made popular among
billionaires by Bill Gates and Warren Buffett to give at least half
their wealth to charity. It recently received its first Russian
adherent in Vladimir Potanin, CEO and part owner of Norilsk Nickel.

Mr Vardanian believes that, in a country like Russia, it is not enough
to wait until after you die to hand over the money, as the pledge

`In our case I believe some of the people need to spend this wealth
now, to make a dramatic transformation. Because in our countries we
need these changes much more dramatically compared to more developed

His four children will inherit only property. He and his wife will
spend the rest of their wealth on charitable projects during their
lifetimes, he says.

Many of his projects focus on Armenia, the country of his childhood
and parents ' although he is quick to say that he does not hold an
Armenian passport and has no political ambitions.

He is spending an estimated $80m to build what he says is the world's
longest cable car to the ninth-century Tatev monastery in southern
Armenia, as well as to restore the monastery. He has built a school in
Dilijan in the north that he hopes, as a member of the United World
Colleges network, will help open up the world to young Armenians.

He is planning a project to commemorate the 100th anniversary of the
1915 Armenian genocide by paying tribute to the people and
organisations that helped to save Armenian lives.

Mr Vardanian tells a story of how his grandfather as a child was saved
from the genocide by American missionaries who ran an orphanage.

`I became successful and today I can have a discussion with you about
my wealth because 100 years ago four missionaries went to a crazy
place where there was a war and saved 150 kids,' he says. `Now I'm the
rich person, I want to give back.'