"The most correct thing is not to make sudden movements"
- What is the proportion now of Alfa Group's business between Russian and foreign assets? It seems that the Russian market interests you less ...
- Today, taking into account all those aspects that we are all well aware of, the opportunities on the Russian market are not large. But this is only on the one hand. On the other hand, as investors, we want to somehow develop. We believe that in Russia we have already made a lot of interesting investments, and we would like to try ourselves internationally - to build some kind of infrastructure that will allow us to make the same successful projects, but outside of Russia.
We do not have any dogmatic canons with respect to these shares of business distribution, of which you are asking me. Rather, we still maintain an opportunistic approach: if we see interesting opportunities, we try to implement them.
- Internal recent events - the arrest of the Magomedov brothers, an increase in the role of the state in business; does this mean that there is another change in the rules of the game between the state and business? Businessmen from various industries say that there are fewer and fewer places for business in Russia.
- It seems to me that it is less for the first time because of a significant outflow of Western investments. The tendency of strengthening the role of the state - it rather goes unconsciously, it is such a natural defensive reaction to all sanctions things that affect the economy.
The reaction to the above-mentioned arrests is small, although, of course, for us as a whole, this is an unpleasant event. We also increase the share of the state. And, for example, in the banking segment the attitude to this is twofold. On the one hand, unscrupulous banks are being removed from the market, and their clients are trying to build new relationships with other banking institutions, including Alfa-Bank: the client base is growing due to these turbulent movements on the market. On the other - certainly, in general, the trend for us as for private investors does not look the best.
- You are not only a Russian investor, but also an international investor, and you have come to the famous "Kremlin list" among other Russian well-known businessmen. All this sanctioning history complicated for you the relationship with foreign partners?
- Of course, we have experienced and are experiencing a number of difficulties. It's no secret that we were forced to sell our British assets in the oil and gas segment, there are a number of other issues that we faced [because of sanctions]. But in general, we are trying to continue to work and work.
I do not recall that we had any sharp fluctuations [in our relations with foreign partners]. It seems to me that it is necessary to clearly separate private investors and private partnership and the position of certain state bodies. Officials are officials all over the world: this category is guided by a more formal approach.
- But any, for example, a foreign private bank is part of the state system.
- On the one hand, of course. But on the other - any bank is interested in maintaining normal relations with its customers. This is such a difficult facet, not simple, both for us and for them. We are still trying to find reasonable and reasonable compromises. Naturally, all these [sanctioning] things are extremely unpleasant. But we do not yet feel any significant negative impact on our business and our investments in the West.
- For your part, did you have to change the style of communication with Western partners? Have you hired special lawyers or consultants for these tasks?
- No. It seems to me that in such situations the most correct thing is not to make sharp movements, do not change anything dramatically: neither style, nor structure, do some global financial transfers.
- When did you learn that you can potentially enter a certain list with some consequences? There was no fear?
- Fears, probably, some internal ones were, but it is almost impossible to predict such things. This is like predicting the price of oil or the movement of comets. I think that those who compiled this list, they probably also at the last moment made some decisions, in what configuration and what to publish. But as a result, they simply took Forbes's list plus the government's telephone directory and published it.
- That is, the employees of the US Treasury were hooliganized?
"I do not know if they were scraping or not, but this is not a sanction list." It's just some kind of list. List of influential Russian businessmen and politicians.
- Some of his figurants called their inclusion into it literally a recognition of merit on the world level.
"Well, it seems to me that they exaggerate a little about recognition." About myself [I can say] - some unpleasant feeling was, I do not like to get into any lists at all. An unpleasant feeling was due to the fact that there was no understanding of what the consequences would be. But then, after some time, they received comments, sorted it out, and, in fact, everything.
- How much is this healthy situation for business: first the state creates conditions in which businessmen suffer, then they also help? I mean Viktor Vekselberg and Oleg Deripaska. The
- It seems to me that there are no clear logical explanations for what sanctions were sent and why they were introduced against the same Oleg [Deripaska] or Viktor [Vekselberg]. It's unclear, I would say, goal-setting. What we see now is a move towards nationalization. It is clear that the state, providing financing, lending, does so not on a grant basis. This is interest, a system of some guarantees. And already through this [gets] and influence on some decisions that in this business should be accepted. This is the same as any bank, when it issues a loan, receives a certain security system. And again, the bank is trying to control its investment, that is, trying to monitor what is happening in this business. And if he sees that something is happening that contradicts his interests, it can somehow influence this. This is a clearly pronounced tendency. I can not comment on whether it is conscious or it is simply the consequences of actions, which are again carried out by the officials. Officials in all countries are not always guided by purely pragmatic logic.
- But such a situation - the exchange of support for influence, obviously, is not good for business. Is the state able to understand business processes? The
- And what is the benefit for business? From the point of view of different people, good are different things. I am a supporter of private entrepreneurship and believe that the less the state influences the business, the more the state has the opportunity to receive from the business certain positive things in the form of taxes, the development of the economy as a whole.
"While we do not observe buyers"
- Will Alfa Bank remain private?
"Well, he's private now, yes."
- So what is next?
- What will happen next is hard to say: the bank is developing, there are plans, quite a lot of different ideas, directions in which it is necessary and possible to move. Our plans do not exactly include its transformation into the state structure.
"Do you have a sales plan?"
- At the moment there are no sales plans. But we always say that we are ready to sell everything at any time, a question of price.
- Given the developments in the banking sector, this industry has not lost its investment attractiveness?
- Attractiveness is primarily due to the presence of buyers. The more buyers, the better. While we do not see the buyers.
- Given that the state's share in the banking sector, according to various estimates, is now 75-80%, do you compete in such conditions?
- The results of the bank as a whole are quite good. And I think that there is still room for growth, despite changes in the configuration in the banking sector.
"Big players are valued in oil and gas business"
- Do you keep plans to merge the assets of your DEA with Wintershall, owned by BASF, which was announced in December 2017? The closing date for the transaction is the second half of 2018, do you confirm? The
- We have these plans, we confirm them. Now we are actively working on due dilligence, and we hope that this transaction will be finalized. The
- How much do you estimate the value of the company? According to Bloomberg estimates at the end of 2017, it was € 10 billion.
- As you know, the cost of oil and gas companies is directly related to the market situation. We think that the combined company can cost roughly in the region up to € 20 billion. But this is our vision.
- Is it still assumed that LetterOne will have 33% in the combined company?
- How will the LetterOne share decrease after BASF transfers the gas transportation assets to the incorporated company, including 15.5% of Nord Stream, through which Gazprom delivers gas to Europe? At 2-3%?
- Yes, it is insignificant.
- Why did you decide not to retain control over the oil and gas asset? Is it uninteresting for you?
- No, it's not that. In the oil and gas business, big players are valued, which have greater stability in terms of influence, conjuncture and the ability to solve some geological problems that a company may face in a particular field. Therefore, the advantages of a large player - he has significantly more opportunities for development, to enter new regions. The oil and gas business is quite politicized, it is always some kind of connection with the state, these are licenses, these are competitions, this is interaction with large oil and gas companies. Therefore, for us as a whole, this is a logical continuation of the chain of our successive steps. Such a configuration [ownership], with certain rights of the owner and the rights of the investor, opportunities to enter the IPO allows us to position ourselves and this company as a large international player.
- What new markets do you plan to go to?
- We see quite a lot of development opportunities in Mexico, Brazil, again in Russia, where Wintershall has a good position thanks to cooperation with Gazprom (Wintershall owns shares in two operating gas projects of Gazprom - in the development of the first block of Achimov deposits in the Urengoy field and in the Yuzhno-Russkoye field. - RBC). The
- examines whether the possibility of joint oil and gas projects in Russia and abroad with the participation of Russian private companies such as Novatek and Lukoil? Or are you not interested in the Russian market?
- No, why? We still know this market well, that is, there is potentially the possibility that we will implement some projects here. But here the logic is the same as in other businesses of Alfa Group: Wintershall DEA has management, they will look and offer some investment, based on an agreed strategy. We, as investors, will either support them or not.
"We primarily think, of course, of Russia"
- At the last St. Petersburg Economic Forum, you announced in attracting investors Rosvodokanal: your partner can become Russian Direct Investment Fund (RFPI) and the French company Veolia. Let's from the very beginning - who came to whom and how was the configuration of such a consortium formed?
- We discussed the partnership with RFPI and tried to build it about seven or eight years ago, when the fund was just formed and they were looking for different directions related to possible co-investment in various business segments, including housing and communal services. Then we conducted quite intensive negotiations, but you know that the RFPI rule is co-investment: they implement projects only together with some foreign investors. And then such an investor, who would be interested, did not exist, and this construction did not work out.
Approximately six months ago, Veolia began to show interest in Rosvodokanal. We held a number of consultations with them, and literally a few weeks before the St. Petersburg Economic Forum we had an important meeting. On it, we recorded Veolia's interest in entering the capital of Rosvodokanal. The same meeting was attended by representatives of RFPI. The result of the meeting is the readiness to fix the possibility of creating such an alliance.
- It's not quite clear why the RFPI is here? If the French came to you directly, you are interesting to them, why another partner?
- RFPI is a financial investor, a state fund, therefore, taking into account all those difficult aspects with which companies working in the housing and communal services periodically collide on the Russian market, its participation is quite important and significant. In addition to money, it is also the recognition that public-private partnership is an important strategic direction in the development of relations between private business and the state.
- That is, analysts say that one of the possible reasons for the deal is that companies operating in the industry do not work in the simplest conditions, that we have an ambiguous state policy in the sphere of housing and communal services and so on. RFPI is also some support of the state?
- Of course.
- To you, Rosvodokanal in principle, why did you need partners? Is this the need for financial leverage, the desire to scale business and enter foreign markets?
- We primarily think, of course, of Russia. Today in Russia there are unlimited opportunities in this segment of the business and the market is practically not occupied, growth opportunities are not limited by anything. Veolia is interesting for us because of the presence of international experience, technologies, managerial decisions, as a strategic partner, which can shorten the distance of studying the features of the market and pass this way faster. Well, plus, of course, we are thinking about a serious global expansion - and this is the main idea of our presence in this business.
What is Alfa Group?
The history of the consortium "Alpha-Group" began in 1989, when Mikhail Fridman and his institute friends and partners in the cooperative activities, German Khan, Alexei Kuzmichev, Michael Bezelyansky Andrew Shelukhin and Oleg Kiselyov established a Soviet-Swiss Joint Venture "Alfa-Eco ". Later they were joined by Peter Aven and Andrei Kosogov. At the first stages, the company set up exports of artificially aged carpets from the Transcaucasian republics of the USSR, import of cigarettes, then switched to commodity trading and investment activities. Today, the group operates various businesses in the financial services sector (ABH Holdings SA, «Alpha Insurance" MC "Alfa Capital», Alfa Asset Management SA), investment (investment A1), retail (X5 Retail Group), and water (Rosvodokanal ), production of mineral water (IDS Borjomi International), etc.
«Альфа-Групп» не имеет единого юридического оформления. Альфа-банк через несколько компаний контролируется зарегистрированной в Люксембурге ABH Holdings S.A., которая принадлежит Михаилу Фридману (32,8632%), Герману Хану (20,9659%), Алексею Кузьмичеву (16,3239%), Петру Авену (12,4018%), Андрею Косогову (3,6716%), а также UniCredit S.p.A. (9,9%) и фонду исследования онкологических заболеваний The Mark Foundation for Cancer Research, зарегистрированному на Каймановых островах (3,8736%). АО «АльфаСтрахование» принадлежит ООО «ЮНС Холдинг» (99,9%) и миноритарным акционерам, а ее конечным владельцем является люксембургская CTF Holdings S.A. ООО «УК «Альфа-Капитал» принадлежит в равных долях двум российским компаниям, которые, в свою очередь, учреждены иностранными юрлицами — люксембургской Alfa Capital Investments Holdings S.A. и Alfa Asset Management Holdings Limited с Британских Виргинских островов. Из отчетности компании следует, что конечными ее бенефициарами с долей владения более 15% являются Михаил Фридман, Герман Хан и Алексей Кузьмичев. X5 Retail Group по состоянию на конец 2017 года на 47,86% принадлежала CTF Holdings S.A., а также Intertrust Trustees Ltd (11,43) и миноритарным акционерам с владением менее 3%. Инвестиционная компания A1, по данным СПАРК, принадлежит гибралтарской Logford Investmants Company Limited (99,99%), а также Александру Файну.
Alfa Group does not have a single legal design. Alfa-Bank through several companies controlled by Luxembourg-registered ABH Holdings SA, which belongs to Mikhail Fridman (32.8632%), Herman Khan (20.9659%), Alexey Kuzmichev (16.3239%), Peter Aven (12.4018% ), Andrey Kosogov (3.6716%), as well as UniCredit SpA (9.9%) and The Mark Foundation for Cancer Research, registered in the Cayman Islands (3.8736%). AlfaStrakhovanie is owned by UNCS Holding (99.9%) and minority shareholders, and its ultimate owner is Luxembourg's CTF Holdings S.A. LLC "MC Alfa-Capital" belongs in equal shares to two Russian companies, which, in turn, are established by foreign legal entities - Alfa Capital Investments Holdings S.A. and Alfa Asset Management Holdings Limited from the British Virgin Islands. It follows from the company's reports that its final beneficiaries with a share of more than 15% are Mikhail Fridman, German Khan and Alexei Kuzmichev. X5 Retail Group as of the end of 2017 was 47.86% owned by CTF Holdings S.A., as well as Intertrust Trustees Ltd (11.43) and minority shareholders with less than 3% ownership. Investment company A1, according to SPARK, belongs to Gibraltar's Logford Investmants Company Limited (99.99%), as well as to Alexander Fain.
"First of all, we are investors, not managers" - one of the principles of the investment philosophy of the group.
"We always welcome competition"
- Another sector, where significant changes began and where there are assets of Alfa Group, is retail. Recently, top managers left X5 Retail Group, for example, the head of the Pyaterochka network Olga Naumova. And she went to your main competitor - the "Magnet" network, which after the change of ownership stated that it would regain its leadership. In connection with all these events, what task do you now put before the management of X5 Retail Group?
- We always welcome competition, because we believe that the presence of strong competitors allows us to develop. Therefore, we will follow with interest how the "Magnet" will try to regain its first place.
If we talk about the tasks, they are the same: to develop business, to try to remain a leader in key key indicators. The company is growing quite strongly - both organically and through M & A transactions, this is a balanced configuration.
- In general, Alfa Group and A1 in their time were very active in the consumer market. Now about new projects can not be heard, their number is reduced. Are you disappointed in the consumer segment?
- It only means that we do not yet see interesting price offers for entrances. As I said, we have an opportunistic approach. We enter when we see opportunities, and we go out when there are proposals.
- Over the past year, you twice changed the team A1: Alexander Vinokurov left, Andrei Tyasto took his place, but he was replaced by Andrey Elinson. What is the reason for this?
- I would say that he changed once - Andrei Heavy performed duties. We watched and tried it on the first position, but due to different circumstances we came to the conclusion that we need to look at someone else.
- The task for the team of Elinson changed or did it remain - to look, what is interesting in the market? The
- It is hardly possible to fundamentally change the task. We are not trying to change our approach to this business, we are trying to build it now on the principle of partnership with the management team. When many years ago we, as owners, directly led the company, took part in the decision and implementation of projects, the results were generally better. So now we are bringing this important element into the relationship with management.
- Is it possible to single out now three branches, to which there is interest in terms of potential investments?
- We do not have branches. The strategy of A1 is to deal with transactions of so-called special situations. And they can be in different industries. In general, it is an investment company whose goal is to buy assets, positions at a discount, taking on increased risks, based on the availability of special situations, to solve these special situations. Due to this, to raise fundamentally the quality of assets, to carry out certain activities related to attracting quality management, to form a management system. Again, due to this, creating an additional value and selling.
"We have everything about money"
- Recently, rumors appeared again on the market that VEON could sell Russian business - VimpelCom. Do they have a reason?
- First, they have no relation to reality. Secondly, it is quite a big expensive asset, and the buyer yet.
- In principle, the technology market is interesting to you? You had deals on it - you, for example, went to Uber. Are technology companies still in focus?
- In order to engage in investments in high-tech companies, we must thoroughly understand this. If you talk personally about me - I do not understand anything about it, so for me investments in traditional industries are much more understandable and comfortable. Of course, we are trying to make some steps in this direction, but how successful they will be, how far we will move in this direction, we still have to decide. Although the investment in Uber - it was about money, because we have everything about money. We do not take trial steps simply out of love for art.
- That is, did not participate in ICO Telegram, did not buy bitcoins?
"We did not buy."
"Do you believe in blockade technology?"
- I do not understand what it is.
- How long is the history with the common disease of digitalization? The new government created a digital ministry. Is this all for the good?
- I believe that this, of course, fundamentally changes whole industries and improves efficiency, manageability, and saves the cost of bones. But no one knows where the border and the right balance between traditional industries, traditional business principles and digital technologies.
Any industry is people, organizations. And if the introduction of a digitalization or digitalization starts suddenly ...
- Which threaten their work.
- It is quite true that as a result, a certain reduction from 10 to 15% will result. And all this organization, which has already built this whole definite internal hierarchical system, starts to struggle with it. And this happens, as a rule, unconsciously. It's not that someone is negotiating with someone. This is not a conspiracy. It's just resistance to something new. This resistance occurs always, everywhere.
- Are you an investor, your fellow investors, do you see a threat in technologies? Technology will somehow change the approach to investing?
"They will definitely change everything, but it's not a threat." This is not a threat, it is good, because it increases efficiency, it develops the industry, and it develops us. We are interested, so we believe in it.
- But this does not reduce the importance of personally your competencies, your influence, does not reduce your cost?
"My value depends on the value of my assets, not my personal participation in certain decisions, so I will easily transfer all my powers if this is directly proportional to the increase in capitalization. I have no problems with this.
- A little more, and the Forbes list will be "moved apart" by new crypto-millionaires. Are not you afraid of competition with them?
- We are not afraid of any competition. It will be extended - excellent. We have already seen actually ups and downs. He will move closer - then he will move. We are not trying to live in an illusion or in an analysis of where we are on the Forbes list. I practically do not read it and do not react to it in any way. It does not matter what place. It is important how you feel, what pleasure you receive from life and from work and how much you are internally balanced. That's all.
- Are you completely satisfied now? Balanced?
"You can never be completely satisfied." I am in the stage of finding balance after our exit from the oil and gas business, to which I devoted a lot of my personal time and after the sale of the company (in March 2013, Alfa and partners sold 50% of TNK-BP to Rosneft) , of course, arose a certain niche. If not a complete vacuum, then a significant part of the free time, which in principle there was nothing to occupy. Now slowly in these five years we have created our Western business, where I take the feasible part, where we have changed the configuration in relations with companies inside Russia. I worked at the board of directors quite actively. That suits me perfectly.
- A few weeks later, the World Cup starts, and Alfa Bank is its partner. Do you plan to watch the championship yourself?
- No. I do not like football, I do not plan to watch the championship.
- Then from the point of view of business. Why did Alfa-Bank decide on partnership? This is quite an expensive story.
- Again, the decision was made by the management of the bank. In my opinion, despite the fact that this is an expensive story, it has a completely pragmatic meaning from a financial and economic point of view. And from the point of view of positioning, from the point of view of advertising, from the point of view of ticket sales, attendance of stadium visitors and so on, that's why I am sure that it is not a charity action in its pure form.
"So how much did you pay?"
- I dont know. Honestly I do not know. I was not even interested in this question.
- Another big project, in which Alfa Bank participates is the Alfa Future People festival. Is it about money or for the soul?
- I think that this is more attraction of clients, work with a certain segment, with young people. The
- You, as an investor, probably analyzed, on what generation is it worth to bet now?
- Of course, the rate should always be made on youth.
- Young people are also different. You can work with those who are not 18, and gradually accustom them to their products. Someone works with category 25+. Who should I bet on?
- I think, on those and on others, but with different concentration of efforts.
Six facts about Herman Khan
October 24, 1961 he was born in Kiev, after school he worked as a fitter at the Kiev experimental plant of non-standard equipment.
1978 - entered the Kiev Industrial and Pedagogical College. After graduation, in 1982, he began his studies at the Moscow Institute of Steel and Alloys (MISiS) at the Faculty of Casting of Ferrous Metals. During my studies I met my future partners Mikhail Fridman and Alexei Kuzmichev.
1989 - created a cooperative "Alexandrina", which was engaged in the sewing of jeans and their sale in the capital's Riga market.
1990-1992 - headed the wholesale department in the Soviet-Swiss joint venture "Alfa-Eco", where he was partnered with Friedman, Kuzmichov, Oleg Kiselev and two other graduates of MISIS, Mikhail Bezelyansky and Andrey Shelukhin. "Alfa-Eco" (in 2004 it was renamed A1) became the first structure of the future Alfa Group.
1996 - from that moment Herman Khan was concentrated on managing the oil business of Alfa-Eco. During the period when he headed Alfa-Eco (1996-1999), the company together with Renova Viktor Vekselberg and Leonard Blavatnik bought at auction 40% of shares in Tyumen Oil Company (TNK) for $ 810 million, after which the partners consolidated 99 , 9% of shares. Subsequently, the company merged business with British BP, resulting in the emergence of a joint TNK-BP - in 2013, its partners in Alfa Group sold for $ 14 billion.
June 17, 2013, led the company L1 Energy, created by the consortium "Alfa Group" for investment in the international oil and gas sector.
He is fond of hunting, married, and has four children. The state of Herman Khan, according to Forbes, is $ 9.8 billion (152nd place among the richest people in the world and 12th among Russians).