From crisis caused by the pandemic coronavirus, the dollar millionaires in Russia could be less by 10-15%, according to estimates, “Renaissance Capital” and Knight Frank. Reason — revaluation of ruble assets, the value of the property and losses in instruments with high risk.
According to Credit Suisse, at the end of 2019 in Russia, there were 246 000 dollar millionaires. Of these, about 3 000 — with assets of more than $50 million, But the March drop in the markets and emergency braking of the economy in April has gone through all of the States.
This Forbes gave the head of a direction on work with private clients “the Renaissance the Capital” Grigory Sedov.
“it Can be assumed that the majority of millionaires — the so-called “border” millionaires, that is people with assets of $1-2 million, We expect that up to 15% of the total number of millionaires in Russia could lose this “status” after the event”, said Forbes.
The Knight Frank estimates are slightly more optimistic — according to managing partner of Knight Frank Russia Alexei Novikov, this status could lose about 10% of millionaires. But he also emphasizes that this is a subjective assessment.
the causes of the losses of the vast state could be the revaluation of the exchange rate if the asset was in the ruble zone, and impairment of the value of the business, explains Grigory Sedov. “We also saw examples of investors engaging in high-risk instruments in the portfolio, which was badly damaged in the spring of the collapse in the markets,” he says.
Millionaires might lose some money on real estate, says Alexei Novikov of Knight Frank. According to the analysis by Knight Frank, the property is in average to 22% of the portfolio of Russian clients with assets more than $1 million, “Russian property — denominated asset, where the dollar has increased by 10-15% relative to the pre-crisis time. If you evaluate the wealth of millionaires on the part of the portfolio which is in real estate, then in its selling and converting money into dollars, millionaires might lose some money on this part of the portfolio,” — said Novikov.
However, he noted that only about 18% of the portfolio of wealthy Russians usually kept in cash or currency deposits, and the money lost its value. “What happened to the rest of the portfolio is guesswork, it’s hard to tell who lost and who won,” concludes Novikov.
Forbes Interviewed managers of family offices said that their clients have lost their status as millionaires is not. But the reason may be that companies do not see the loss of their clients in the business.
“As private banking we work with individuals and evaluated only liquid assets, and are unable to estimate the loss of business of our customers,” saidand press service of the savings Bank.
Among the clients of the family office of UFG Wealth Management those who have lost the status of a dollar millionaire, either, said the Director of the investment Department Wealth Management UFG Alexey Potapov. To disclose the dynamics of the pool of customers and the amount of capital managed by the company, he did not.
Trend in the decline in the number of millionaires do not see in the VTB. In the first five months 2020 total funds under management of VTB Private banking increased by more than 200 billion rubles, exceeding 2.4 trillion rubles, said Forbes senior Vice President, head of Private banking VTB Dmitry Breitenbecher. “Although, perhaps, we are also not in the market trend is our performance reflects the trend of advancing the development of our Private Banking”, — he assumed.
In some sectors of the economy, the situation turned out to be very complex, recognizes Breitenbecher and some customers now have to solve the problems of support of operations of their companies. “Sometimes they use personal funds or loans secured with personal assets to keep your business, its survival. But the amount of such payments in the overall portfolio is not very large — about 30 billion rubles since the beginning of the year,” he said.
“In some degree it gives them the opportunity to cover the losses of the real sector”, — says managing Director, BCS Ultima Private Banking Andrey Revenko.
Citibank wealthy investors with more aggressive portfolios, where the share of the shares significantly exceeds the share of bonds since the beginning of the year lost an average of 7.5%, says the head of Department on work with financial assets of the Department for work with private clients, Citibank Mikhail Znamenskiy.
Investors-conservatives from the beginning of the year earned an average of 4.3% in foreign currency, and investors with an average risk level of the investment portfolio — most of their clients earned 0.7 percent in foreign currency, said the sign.
Lyudmila Petukhova
