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Ruben Vardanyan, former Troika Dialog CEO: a grumbling optimist

Ruben Vardanyan Troika Dialog Moscow School of Management SKOLKOVO UWC Dilijan College, Armenia Revival of Tatev (Armenia) Manager

Source: Financial Times

Author: Jack Farchy

For a man once called the poster boy of Russian capitalism, Ruben Vardanyan 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 Vardanyan 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 Vardanyan 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: analysts 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 Vardanyan 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 opportunity.

“Now 24 years later I am sitting with you and we’re talking about the same thing.”

Just as he did in 1991, Mr Vardanyan 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 Vardanyan’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 Vardanyan 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 Vardanyan 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 Vardanyan 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 allows.

“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 countries.”

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 Vardanyan 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.”

Second opinion

Ronald Freeman was head of banking at the European Bank for Reconstruction and Development in the 1990s after the break-up of the Soviet Union when he first worked with Ruben Vardanyan; in 2000, he became an adviser to Troika Dialog.

He says Mr Vardanyan’s interpersonal skills have underpinned his success as a liaison between Russia and the west, describing him as “patient and tolerant of any foibles that those he does business with may have”.


Born May 25, 1968 in Yerevan, Armenia


Degree in economics from Lomonosov Moscow State University; postgraduate courses and programmes at various institutions, including INSEAD and Harvard Business School


2013 – present Founding partner of investment boutique Vardanyan, Broitman and Partners

2006–11 President of Moscow School of Management Skolkovo

2002–4 CEO of insurer Rosgosstrakh

1992–2012 Executive director and then president, CEO and chairman of Troika Dialog

Family Married with four children

Interests Reading and travelling