As a billionaire Oleg Boyko created the largest empire in Europe

Today, Boyko is only interested in fintech - he dreams of building a global leader in this industry.
13.02.2018
Forbes
Origin source
American actress Sharon Stone was furious. Arriving at the Cannes Festival, she discovered that her villa, reserved a year ago, was given to some Russian oligarch. A public scandal broke out in which the businessman put an outrageous point by launching a small plane into the sky with an inscription insulting for the actress. This story happened in 1995, the "Russian oligarch" was the banker Oleg Boyko. In September 1996, in Monaco, he returned to the villa from the beach and found that he had lost his keys. Boyko tried to get inside through the balcony, but fell from the second floor and broke his spine. But he himself did not break.

Forbes assesses the state of Boyko at $ 1.2 billion, on a state-of-the-art automatic chair, he makes dashing bends in the corridors of the skyscraper City of Capitals, where the office of his investment holding Finstar is located. Zhovialnost and love of extravagant antics did not leave him. At the table in Boyko's office there is a baseball bat, Finstar's employees tell how a billionaire can rush along the corridor, swinging and knocking on the floor with a sporting projectile, when the IT department's employees set something up incorrectly. Friends call him a joker and the soul of the company. Boyko himself assures me that he is long and absolutely happy: "I do not even have a bad mood."

Russian roulette

Hardly a good mood was constantly accompanied by Boyko in 1996, when in France he moved from one hospital to another. A serious blow for the businessman was the collapse in Russia of his trading network "OLBI" and the bank "National Credit", which at the time the license was revoked by the National Sports Fund. One of Russia's richest people lost everything and for a long time disappeared. Return to business helped dating. Boyko had a small restaurant in the center of Moscow, which visited the whole color of Russian business. There Boyko got acquainted with Alexander Abramov, in 1999 they began to buy up debts of metallurgical enterprises, and after consolidating their assets - so the company Evraz appeared. In 2004, Boyko sold his share of 25% for $ 600 million. He says that his mission at Evraz at that time was over, and it was already uncomfortable to stay in the cycle metallurgical industry for a long time. In addition, there was a risk that a major asset obtained through bankruptcies and corporate wars would attract undue attention of the state.

In 2005, Abramov took Evraz on an IPO, today the capitalization of the metallurgical giant is $ 6.5 billion. "We joke that the best investment for Boyko would be to do nothing with Evraz and rest on the Canaries," says a former Finstar employee. "And still he would be richer than now." The businessman himself with this idea hardly agrees. On his yacht, 44-meter Blade, he begins to get bored after a couple of days. And the most successful investment is buying for $ 6 million in 2002 gambling network "Vulcan" with a couple of dozens of rooms.

Under the leadership of Boyko and his partners, Vulcan turned into the largest gambling holding of Eastern Europe Ritzio Entertainment with annual revenues of about $ 1 billion. Boyko remembers that the business had a fantastic margin: the profit could reach $ 800 million. "It was a good money machine," says he. "And then they turned it off." President Vladimir Putin personally turned down himself by signing in 2006 a law that banned gambling in Russia everywhere except four special zones. In 2009, a similar ban was introduced by Ukraine, and Ritzio's revenue in 2010 fell to $ 154 million. "It's a shame," Boyko admitted then. "They created the largest company in the world in its format, even managed to sign a mandate for an IPO ..." Ritzio still has gambling halls in Germany, Italy, Romania and Croatia, but for Boyko this is already "an insignificant part of the business."

On the ruins of the gambling empire, Boyko tried to build a new business. In the halls from which slot machines were handed out, lotteries and bookmakers were launched in 2007-2009. Finstar invested in the product retailer "Smak" and the chain of jewelry stores "Juvelux". Almost all projects were unsuccessful. However, one more time the businessman managed to repeat the success, as with "Vulcan", but on a more modest scale. In 2007, he bought 75% of the St. Petersburg perfume chain "Riv Gosh" from a couple of entrepreneurs from Larissa and Pavel Karaban. By August 2012, "Riv Gosh" has become the second largest seller of perfumes and cosmetics with 190 stores throughout Russia. Then Boyko sold control in the network to the ex-owners of "Lenta" August Meyer and Dmitry Kostygin. Boyko's acquaintances say that on this transaction he could earn up to $ 200 million.


Profitable managed to sell and the last major gambling asset - the American manufacturer of slot machines Cadillac Jack (CJ). Boyko bought the company in the mid-2000s for $ 16 million, invested $ 50 million in development and sold in 2012 for $ 177 million. The buyer was David Baazov, the creator of the little-known Canadian company Amaya, owner of the online poker table. Boyko says that he was fully satisfied with the price offered by Baazov, and he did not see any growth prospects for CJ. But I saw the Baazov: after a couple of years he resold CJ for $ 375 to the Apollo Global Management fund.

The purchase of CJ was financed by the Blackstone fund. The deal with Boyko helped Baazov establish relations with the credit department of the fund. After that he spent a year and a half persuading Blackstone to enter Amaya's capital by buying back shares with a huge mark-up. The partner needed Baazov to fulfill his old dream and become the owner of the company Rational Group, which owned the world's most popular online gaming site PokerStars with 89 million registered users. The deal seemed impossible: Amaya's revenue, even after the purchase of Cadillac Jack, was $ 140 million, and PokerStars brought $ 417 million of net profit only to its owners for $ 1.13 billion. But Baazov managed to persuade Blackstone, as well as a number of funds and banks, to finance the deal, and in August 2014 year Amaya bought PokerStars for $ 4.9 billion.

"Fantastic deal," says Boyko. "Baazov showed himself to be a businessman capable not only of management, but also of building partnerships." Boyko's acquaintances say that he prompted Baazov how to design the transaction, the head of Finstar himself admits that part of the money from the sale of CJ invested in a small - about 5% - Amaya package. Ex-managers Finstar say that Boyko had ambitions to participate in the management of PokerStars, but nothing came of it, the purchase of shares remained a financial investment. After the purchase of PokerStars, Amaya was renamed the Stars Group, in 2014 its shares soared three and a half times.

In March 2016, the Canadian securities market regulator accused Bazov of insider trading and manipulating the securities market, in August the creator of Amaya was dismissed from his post as CEO. "While the judicial history has not ended, I do not have any negative feelings about Baazov," Boyko said. "In America, it is quite strict regulation, the courts of the regulator with the company are quite common practice." A few months ago, he sold the package Stars Group, fixing profits "more than a hundred million dollars."

Ocean of Finance

One summer evening in Jurmala, Oleg Boyko surrounded on the embankment a crowd of girls in tight T-shirts and short shorts. Arrived in the city for the next festival "New Wave" charismatic billionaire could not drive past the sexy beauties who celebrated the hen party and collected money from passers-by in exchange for various trifles. He gave the girls a few bills.

The interests of Boyko in Latvia are not limited to music festivals and beach adventures. He actively invests in Latvian real estate, and in 2011 bought a stake in the local microfinance company 4finance. Vendors, he says, were made by two influential Latvian businessmen, Uldis Arnikans and Edgars Dupats. The latter is married to the daughter of former Latvian Prime Minister Andris Shkele. A Arnikansa one Latvian businessman characterizes in a conversation with Forbes as an active investor with interests in the oil and aviation industries, as well as politics.


Boyko does not disclose the amount of investment, but the source at 4finance says he invested more than € 100 million in the company. 4finance issues online loans in almost two dozen countries, including Mexico and Argentina. Arnikans and Dupats are still partners of Boyko, they own 25.5% of 4finance, the share of the Russian billionaire is registered with a family trust. Source Forbes says that Shkele and his entourage no longer have much influence in the country, but the former prime minister maintains good relations with the local financial regulator, which in some way can contribute to the development of 4finance business. With 4finance, other influential people of Latvia are also connected, for example, the former Vice Mayor of Riga Andris Ameriks invests in the company's bonds.

Why did Boyko invest in the Finnish company? He jokes that he was carried away by the fintech in the USSR. In 1988, he and his friends earned the first money to sell computers and software to state enterprises. For the equipment, buyers paid by bank transfer, and withdraw money from the bank account was possible only with an impressive commission of 20%. Then the partners came up with a scheme: they sent their cooperatives a floppy disk with software cash on delivery. The co-op paid a check, and the sender received cash, paying a commission of 2%. "On this difference between 2% and 20% we lived," Boyko jokes.

Now the scale of the business is different. Finstar actively invests not only in 4finance, but also in other fintech companies. For example, in 2016, together with Holtzbrinck Ventures, he invested € 31.5 million in the German service for small and medium business financing Sportcap and in the P2P-site for on-line lending for individuals Viventor, which also operates in the Spanish and Polish markets. Investments were made in Rocket10 and Billfront services, engaged in online marketing.

All companies, in which the holding invests, exchange experience and services. Boyko dreams of building a global finteh leader. "The segment in which we operate is the largest blue ocean in the world," the billionaire believes. - I can not imagine the second such industry, where there is no serious competition. We work with people who are now excluded from the financial services sector: we make a product for those who either do not pass bank scoring, or are dissatisfied with the quality of services - underbanked and underserved, as we call them. All their needs can be met with existing technologies, the main thing is to link them to the correct mosaic. " In order for the mosaic to develop, Boyko is ready to spend up to $ 150 million, he is interested in companies in the field of payment systems, marketing, data processing and credit risk management.

Are there already results? "Finstar has a large set of assets, which reflects the strategy - to develop lending in different countries," says Mikhail Lobanov, partner of Target Global Venture Fund. "When you work in 30 markets, maybe it does not work very well for you, but Finstar shows very good results for most countries." Lobanov notes that Spotcap is one of the largest sites for P2P-lending to small and medium-sized businesses in Germany, where it successfully competes with one of the European leaders Finding Circle.


4finance in 2016 received € 63 million in profit and is now growing at an impressive rate: from 2012 to the third quarter of 2017, the company's loan portfolio grew by 650%, to € 720 million, not least due to the acquisition in 2016 of TBI Bank operating in Romania and Bulgaria. "4finance has done a tremendous job in recent years," argues Mikhail Lobanov. - She shifted her business model from PDL (pay-day-loan - loans to paychecks) to the issuance of loans with a longer maturity and a lower rate for the borrower. 4finance rates are still higher than those offered by, for example, the oldest company in the online lending market of Zopa, however, the target segment is different. 4finance is the undisputed leader of European alternative lending, and in general it is a unique case for virtually all financial indicators, significantly surpassing competitors in consumer lending. " Boyko expects that in the medium term, business will grow by 20-25% annually due to new types of loans, as well as access to Latin American markets.

Unsuccessful movie

Hollywood stars Mickey Rourke, Bruce Willis and Jessica Alba posed for photographers at the premiere of the film "Sin City 2: A Woman for Which You Should Kill". Director Robert Rodriguez in a black cowboy hat touted his new tape: "A stunning selection of actors. Go, look what we did, we'll be back with the third movie soon. "

Expectations did not coincide with reality. The collections of the first "City of Sins" almost quadrupled the $ 40 million invested. The sequel, which was released in August 2014, failed and collected only $ 39.4 million with a budget of $ 65 million. And after a few months, Rodriguez filed to the Supreme Court of Los Angeles, Angeles lawsuit to the spouses of Sergei and Marina Bespalov, who owned the production company Aldamisa Entertainment, which funded the shooting of "City of Sins." The director accused the producers of the fact that they did not refund to him about $ 7.7 million, which he spent on shooting from his own pocket. Bespalov threatened the director with a counterclaim of $ 50 million, and Rodriguez declined the charges.

Not only the director lost money on the second "Sin City". One of the film's investors was Oleg Boyko, he was attracted to Bespalov. Boyko came to Los Angeles, lived there for six months and got acquainted with the Hollywood public. Boyko said that he made the rating of the most successful directors and found that among them there is not one world-famous name, and a commercially-safe option is cheap horrors. Now he recalls this experience as a great adventure, but apparently he does not want to repeat it. Even during the filming of "Sin City" Boyko had to act as the main investor of Scarlett Johansson's directorial debut "Summer Cruise", but the project never started.

Now, Boyko looks with interest towards biotechnology. Affected by the professional experience of the mother - she is a biologist. Boyko interesting projects in the field of increasing life expectancy. He is sure that the market lacks an investor who could combine the achievements made by laboratories that work in numerous narrow directions. Investments in such a project - if not invest in the studies themselves - he estimates in the "tens to hundreds of millions of dollars."

But these are all plans for the future. In 2000, Boyko led several projects simultaneously, now he spends all his energy on finteh. "He wants to know everything, all questions pass through him, he constantly calls and asks how this or that project is progressing," says a former Finstar employee. - Sometimes there are bottlenecks: the question can hang and can not be solved for a long time, because Boyko does not have enough time for everything. "

Head Finstar creates a company that could, by analogy with Ritzio, become for him a mechanism for uninterrupted earning money. In a few years, the business could be brought to an IPO. How exactly it is possible to group the disparate Fintech businesses of Finstar, it does not yet speak.

Boyko repeatedly built successful businesses, but none of them did not bring to the IPO, although he planned. In the case of "Riv Gosh" prevented the crisis, with Ritzio - a ban on gambling. Will he get it this time?

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