The story of how Russia inclined Theresa May to a tough variant of Brexit, received an unexpected sequel. British parliamentarians accused of cooperation with Russian intelligence Christopher Chandler, a billionaire of New Zealand origin.
Chandler is an ideal candidate for espionage history. Together with his brother, he managed to turn $ 10 million into $ 5 billion, working in Russia, Brazil and a number of other countries. Participated in the corporate war in NLMK and helped "Putin's approximate control over Gazprom, according to The Mail on Sunday. In 2016 he became an EU citizen, having received a passport of Malta. He is extremely secretive, can not stand publicity and even on the list of the richest people in the world Forbes (though, for the last time in 2013 at 1342 place) instead of his photo was forced to put a silhouette.
Everything should be tough
The trouble with Christopher Chandler began last year. When the question of the Brexit scenario was solved, Boris Johnson and Michael Gove made every effort to persuade May into a tough option. They handed her a secret letter with their arguments. In November last year, The Mail on Sunday stated that in fact, another person was involved in writing this letter - Shanker Singham, director of economics at the British think tank Legatum Institute. He allegedly held at least seven secret meetings with ministers and officials responsible for Brexit.
The Legatum Institute was created with the money of Christopher Chandler. In 2016, his budget was 4.4 million pounds sterling. 3.9 million of them were received from the Legatum Foundation, which lists the income from Chandler's business - the investment holding Legatum Limited.
No laws were violated, recognizes The Mail on Sunday. But the story is not pretty. Moreover, senior research fellow at the Legatum Institute, Matthew Elliot, worked as general director of the Gowa and Johnson campaign, campaigning to vote for Brexit. The Mail on Sunday claims that in 2012 Elliott was courted by Russian diplomat Sergei Nalobin and helped him to create the organization Conservative Friends of Russia. And in 2015, Nalobin was deported from Britain on suspicion that he was involved in the murder of Alexander Litvinenko.
Gift on May Day
When Russia celebrated May Day, British Conservative Party representative Bob Sili said that Christopher and his brother Richard were the subject of "interest [of the French intelligence service] DST since 2002 because of suspicion of working for Russian intelligence." He and three other parliamentarians read it in the documents that came to them from the police of Monaco. The case is dated 2005, it describes the events from the mid-1990s. Standing on it the neck of S, according to the deputy, means a high or increased level of threat to France. The reliability of the documents was allegedly confirmed by sources in French, American and British intelligence. But just in case the deputy was insured and, accusing Chandler, took advantage of the law, which gives immunity from lawsuits with the accusation of libel.
"I never dealt with the Russian and any other intelligence," Christopher Chandler said in response. "The essence of their statements is not true. I am not and have never been associated with the Russian state in any form. There is no evidence to the contrary ... The prosecutors refused to provide me with the full text of the report for verification. Calling for an explanation and simultaneously hiding the document is clearly not fair ... <...> We do not have skeletons in the closet. Consequently, critics should fabricate accusations, creating guilt by associations, slander and insinuations. "
Islanders Chandlers
Billionaires Chandlers are from New Zealand. The history of their kind is a story about World War II, friendship and family, which was never sitting in one place.
The first data on Chandler belong to the beginning of the twentieth century, when Christopher's great-grandfather emigrated from Chicago to New Zealand and started advertising business, the newspaper The New Zealand Herald tells. He married his own secretary and died of anaphylactic shock when the youngest of his three children was only a year old. The two older sons chose the career of the pilots, they fought in the World War II on the Spitfireers and both died. The youngest, Robert, served on the trawler of Her Majesty's fleet, returned unharmed and joined the pile business led by his friends, father and two sons of Hillary. By the way, one of them, Sir Edmund Percival Hillary, is known as the first man to conquer Everest.
In 1955, Robert and his comrades went on a round-the-world trip and met his future wife Maria in Croatia, the daughter of a farmer who at one time worked as a mayor and was famous for anti-communist views.
In an interview with FT Maria recalled: "When I moved to New Zealand at age 19, it was a cultural shock. I felt like I was thrown into the primitive society of the Wild West. I was born in a two-story house in Croatia, in the historic city of [Trogir], whose Gothic cathedral is known all over the world and is protected by UNESCO. I was well versed in architecture, opera, literature. No one in New Zealand spoke on topics that I would like to talk to. Only about agriculture, the production of wool and how much lamb and beef were exported. "
How to make the area prestigious
In order not to go insane on the apiary, Maria persuaded her husband to change his occupation. They invested their own 5000 New Zealand dollars (about $ 40,000) and borrowed another 195,000 (about $ 1.6 million). With these funds, in 1972, the couple bought a small dilapidated building in an unmarketable area of Hamilton (New Zealand, about 110 km from Auckland), made luxurious repairs (including a colonnade) and opened a Chandler House boutique. While Robert was looking after the trade, Maria was traveling around Europe and Asia and buying laxtery goods. A little time passed and buyers from all over the country began to come to them. And the area where Chandler House was located, became a prestigious boutique center.
"[Mom] was the most brilliant businessman I've ever met, she taught us the basic principles that we follow in investing," recalled her son Richard in the pages of the journal Institutional Investor. For example, "never buy something until you understand who can sell it" or "buy as much as possible if the product is popular, and the offer is limited; when the competitors run out of stocks, Chandler House will break the jackpot. "
Farewell, London!
Robert and Mary had three sons. The elder, George, became an accountant, went to Canada, where he retired. The fate of the other two, Christopher and born a year before Richard, was much more interesting. Since childhood, sons have helped their parents in everything related to shops, from purchases to sales, including traveling with my mother abroad.
Richard was still trying to invest in New Zealand stocks at school, he told Institutional Investor. In 1979, he graduated from the University of Auckland with an accountant diploma, and two years later received a master's degree, defending a diploma in corporate management. During his training, he sent a questionnaire to all public companies of the island and conducted interviews with 200 directors. He will remain interested in corporate governance for the rest of his life, which then will bring a lot of headache to NLMK, Gazprom and the third-largest South Korean chaebol.
After university, Richard went to London to work for Peat Marwick International (now part of KPMG). He worked in the audit team, advising on acquisitions and restructuring. London struck the New Zealander. He joked that he seemed to have diminished and paced around the playing field of "Monopoly".
But a year has not passed since he was summoned back to his homeland. In 1982, my father became seriously ill, and the family needed help in doing business. My father later became better, but Richard has since worked only for the family. Like his brother Christopher, who graduated from the University of Auckland in 1982 with a law degree and was carried away by programming, he was also called to the aid of his father.
How the Brothers Believed the Communist Parties
Christopher and Richard began to expand the business. They opened a second boutique in Oakland. And then eight more throughout New Zealand and started three factories on tailoring. But the free time was coming to an end, the government increasingly regulated exports and trade. Before the Chandler came the choice: either the international expansion of their boutiques, or a test of strength in another business.
They persuaded parents to sell all the shops and in 1986 moved to Monaco. On the proceeds, less than $ 10 million, the brothers opened the investment company Sovereign, writes The Sunday Times. Their first major investment was the purchase of office buildings in Hong Kong in 1987. Real estate prices that year fell by 70%, as it became known that in 10 years, the UK will give this island to China. But the brothers believed the promise of the Chinese Communist Party that the status quo will continue for half a century. The deal was invested $ 5.8 million of its own funds from $ 27.6 million, the missing borrowed from banks. They repaired offices and leased out to generate cash flow for new deals, writes The New Zealand Herald.
By 1991, fear of China diminished, office space again went up. The Chandlers sold all the buildings for more than $ 110 million. After paying debts, they had $ 40 million left in the fund, some of which was received from other investments.
For example, in Hong Kong brothers not only invested in real estate, but also bought futures for the stock index Hang Seng. More than half of it consisted of securities of real estate companies, so that the brothers believed that their two investments in Hong Kong would show approximately the same yield. But they miscalculated.
In any case, they put the stop-loss. On Friday, October 16, 1987, the broker notified them that the quotes had broken a critical mark. Having burned and conferred, the brothers ordered the positions closed. This proved to be the right decision. On Monday, stock markets around the world collapsed, the Hong Kong Stock Exchange closed for three days. Due to the fact that since the purchase of shares their quotes had managed to grow, the brothers withdrew from this investment with $ 5 million profit. But since then, neither futures nor derivatives have been plodding.
How to convert $ 40 million into $ 150 million
The Chandlers told The Sunday Times that they are investing in companies and assets that are highly undervalued because of the riskiness. They are beckoned by sectors and economies, where information is difficult to access, and standard valuation methods do not work. After Hong Kong, they made the first serious investment in shares. It was in Brazil. It has just opened for foreign investors, and the brothers have become one of the main foreign players. For $ 30 million they bought at the end of 1991 1.5% of the monopolist telephony Telebras and a little more invested in the shares of the energy company Eletrobras. Because of hyperinflation, the yield ratio was absolutely impossible to calculate. But the brothers estimated that Telebras, in the words of Richard, "was the cheapest telecommunications company in the world."
Over time, the Chandlers increased the staff of the Sovereign fund to 20 people, but they themselves remained the main driving force of business. Investment ideas were born in the disputes of the brothers, while they were studying the psychology of the market, global trends, technical analysis, writes Institutional Investor. "I'm analyzing and coming up with a concept," Richard explained. "Then I show it to Christopher and I ask:" Is this madness or not? "Nobody is better than Christopher to predict what will happen to the business in five or 10 years, says Richard.
From January to April 1992, Brazilian assets tripled. And then the stock market collapsed. The brothers were worth a lot of nerves, but they waited until the trend turned around and allowed them to go into profit.
Between 1991 and 1994 The Chandlers invested not only in Brazil, but also in Venezuelan, Argentine, Cuban and Nigerian companies. As a result, with $ 40 million, their fund has increased to $ 150 million.
Chandlers in Russia
After Brazil, the Chandlers switched to Eastern Europe, where, after the collapse of the USSR, there were problems with the availability of information, and with reliable estimates. They bought the shares of the Czech electricity holding monopoly CEZ in a matter of months after the listing of the company on the Prague Stock Exchange in January 1994. Foreigners could not then buy these shares. But along with other companies, the brothers created the GDR program for CEZ and in late 1994 they withdrew from the investment with a modest, on their assurances, profit.
Secret charity
Christopher Chandler does a lot of charity work, but little is known about that either, The Guardian was surprised in 2008, when it suddenly became clear that Chandler had invested $ 50 million in creating a business school in the United States. It creates and develops business ideas that will help low-income countries get out of poverty. On the first stream, The Legatum Center for Development and Entrepreneurship, which is still working at the Massachusetts Institute of Technology in Boston, recruited a dozen students. Including the natives of Rwanda, Nigeria and Pakistan. Ikbal Qadir, the former Wall Street banker, the founder of Grameenphone, supervised the center. The initial business idea is to develop cellular communications in the countryside of Bangladesh, enabling telephones owners to sell minutes of conversation to friends and neighbors. Now Grameenphone is the largest mobile operator in this country. Among the projects of the Legatum center are rainwater harvesting in East Africa, an incubator for mobile start-ups in Pakistan, telemedicine in Nigeria, selling to the West so rare and exotic species of wood that some even have no English names, and even a start-up for the commercialization of South Asian art, opened in the center of London. "We founded, financed, developed and continue to support organizations that have improved the lives of more than 270 million people in more than 110 countries," wrote Christopher on the website of the Legatum Foundation in May this year. - Today, the work of [our charitable] foundation is focused on the de-worming of children (the END fund), the fight against modern slavery and trafficking in human beings (the Freedom Foundation) and the return of tens of thousands of refugees and stateless people to school (the Luminos Foundation).
In late 1993, they began to buy vouchers in Russia, says Institutional Investor with their words and explains that until June 1995, when the RTS opened, there was no classical stock exchange in Russia. By the end of 1994, they were able to accumulate 4% in RAO UES, 11% in Mosenergo, 5% each in Yukos's three main production sites, 15% in NLMK, and a little more in Gazprom the size of the package was not disclosed). The investment criterion was simple: capitalization was less than the value of company assets, the brothers explained. In total, they invested a little more than $ 194 million in Russia and considered themselves to be one of the largest foreign investors.
When in 1996, control over YUKOS moved to the bank "Menatep" Mikhail Khodorkovsky, the Chandlers sold the shares and bought another 10% of NLMK, receiving 25% plus one share. But they had a suspicion that with the help of transfer prices, NLMK products are exported to intermediary exporters belonging to the management of the company at understated prices, they explained to Institutional Investor.
The Chandlers merged with another shareholder, also owning 25% of NLMK, the Sputnik fund, the structure of Renaissance Capital by Boris Jordan. In 1997, they began to sue, trying to bring their representatives to the board of directors. But they were confronted with the Russian realities. As Kommersant wrote at the time, at the NLMK shareholders meeting, candidates for the board of directors from Renaissance Capital, IFC and Cambridge Capital Management "for technical reasons" disappeared from the lists in the ballot papers. The company ignored the requirement of shareholders to conduct an independent financial audit with mandatory disclosure of the audit results. But even before the end of the judicial battles, Sputnik sold its package. In 1999, they withdrew from NLMK and Chandler.
In 1997, Chandlerov became concerned about the system of Russian state short-term bonds. They considered it a pyramid and decided, until things went too far, to get rid of these papers. Sold in that year 4% in RAO UES for $ 700 million and 11% in Mosenergo for $ 300 million in total brought them a profit of 416%, they recalled in a conversation with Institutional Investor.
In November 1997, the first wave of the GKO crisis took place. By February 1998, the brothers decided that the market had already fallen and invested $ 1 billion from the sale of electricity assets to Gazprom, where they became the second largest foreign investor. They had slightly less than 5%, Ruhrgas - slightly more than 5%.
But August 1998 reduced the cost of this investment to about $ 200 million. To upset the brothers did not particularly become. They decided that they hurried with the purchase, but "this does not mean that Gazprom is a bad company; it was a great company, "quotes Christopher Chandler Institutional Investor.
But in 1998, the "great company" showed a loss of $ 7 billion, the next - at $ 2.8 billion. As in the case of NLMK, the brothers decided that all the profits are settled by the intermediaries, and again got involved in the struggle for the quality of corporate governance . They supported the chairman of the UFG, Boris Fedorov, in an attempt to displace Gazprom's chairman Rem Vyakhirev.
The whole business in the Czech Republic on one site: allcz.org. Restaurants, pubs, hotels, resorts, companies, institutions, museums, car services.
The Chandlers regularly received proposals from Gazprom management to sell their shares at a price that would provide them with some profit. Quotes of Gazprom were such that, if they sell the securities on the market, it would be necessary to fix a significant loss. "We only think about [invested] in Gazprom means, we would simply take money," Richard Institutional Investor said. - But it was not about money. In Russia, as we believed, we will be able to destroy the culture of fraud, if everyone follows the lead of the leader, and such a leader was Gazprom.
In July 2000, relying on Sovereign and other minority shareholders, Fedorov was able to become a member of the board of directors of Gazprom. Given that in the 11-seat council five seats belonged to the representatives of the state, this changed the balance of power. The following year, Rem Vyakhirev at the helm was replaced by Alexey Miller. By their merit, the Chandlers were said to have helped to establish "transparency and accountability" in the company, The Mail on Sunday cites.
A source close to Sovereign told Vedomosti that in 2003 the Chandlers decided to sell the stake in Gazprom. This money will bring much more profit, if you invest them in Southeast Asia, the brothers decided. In June 2003, they offered a deal to Miller, but were late. The state has already gained control over the monopoly and did not need additional votes. Sovereign had to sell its shares in the stock market, getting rid of the package by January 2004. For more than four years, the brothers earned only 12.5% on Gazprom, the agency concludes.
Japan and Asia
In November 2002, the Japanese economy fell into recession after a decade of stagnation. The Nikkei 225 index was 78% less than at the peak of 1989. The brothers noticed how cheap the shares of local banks became. They decided that either the Japanese nationalize them, or they will take up the economy, reducing the interest rate. Probably the last, the Chandlers thought, and laid out $ 570 million for 5.1% of UFG Holdings, which a year earlier recorded a loss of $ 9.3 billion. Bought more than 3% of Mizuho Financial Group and shares of other banks, spending a total of about $ 1 billion. They have not lost. In 2003, the Japanese economy began to recover. Nikkei 225 by the summer of next year increased by 50%. Investments paid off with interest.
Large bets
The Chandler strategy is to make few bets, but big ones. As a rule, Sovereign simultaneously held the papers of less than a dozen companies, invested in them for 2-5 years. Preference was given to large companies in large countries. Foreign investors are already looking to them, and then it is possible to resell shares favorably. The ratio P / E ratio should be less than 3, explained Richard Institutional Investor. In 2006, this magazine estimated the profitability of a number of Sovereign investments. SK Corp. in 2003-2005. showed a profitability of 433%, increasing the initial $ 168 million to $ 896 million. The package in Unified Energy Systems in 1993-1997. brought 430%, rose in price from $ 132 million to $ 700 million. Mosenergo (1993-1997) showed 383%, $ 62 million increased to $ 300 million. Shares of Mizuho Financial Group at the time of the interview were not sold yet, but invested in In 2003, $ 600 million turned into $ 2.7 billion. UFG Holdings grew by 156% from 2002 to 2004, from $ 570 million to $ 1.46 billion.
In 2003, the Chandlers decided to invest in South Korea. $ 168 million was given for 14.82% stake in the country's third largest chaebol - SK Corp. Perhaps they would have bought a larger package, but then it would have been necessary to declare the redemption of securities from the remaining shareholders.
Christopher told Institutional Investor: "We have altruistic motives that some investors who are looking for ways of least resistance understand with difficulty. But we do not want to be judged on corporate wars. We are investors using a value strategy with a sense of responsibility, not activists. "
Nevertheless, the corporate war has not been avoided in Korea either. Two years the Chandlers fought for the dismissal of the chairman of the board of directors and CEO of SK Corp. Che Tawona. Only one of the campaigns, under the slogan "Get up, Korea!", Spent $ 4 million.
Efforts were not in vain. In 2004, a number of their proposals were adopted to improve corporate governance. Seven of the 10 seats on the board of directors were taken by independent candidates, the company began to increase dividends, lowered the debt burden, issued a transparent financial report and established a committee that controls transactions with third parties, analysts interviewed by Institutional Investor said. But Che Tawon never gave the reins of government. In 2005, the brothers gave up and left the investment, receiving 443% more than they invested.
Not Mary, but Ana
By 2006, the Institutional Investor Magazine estimated the brothers' fortune at $ 5 billion, Forbes - at $ 2 billion. But that year the brothers decided that it was time for everyone to go their own way, and divided the business. Each, according to their assurances, got exactly half of the assets.
Richard opened an investment company Orient Global. Christopher - Legatum. Prior to the division of property, they were second on the list of the world's richest New Zealanders, behind only the manufacturer of paper and packaging materials, Graham Hart. But, as The Guardian writes, they completely forgot their homeland. The maximum that the New Zealand Herald managed to find out about their connection with the island: Christopher, Richard and their father somehow went to the London stadium "Twickenham" to watch the New Zealand rugby team play All Blacks. The nearest investment to the country was Richard Chandler's investment of 150 million Australian dollars in Tasmanian forest company Gunns, whose shares fell from 4.8 Australian dollars to 9 cents from 2005 to 2012, so the government thought about its salvation.
As the correspondent of New Zealand's Waikato Times wrote: "[The Chandlers] were out of sight. But, even when living [at home], they were very self-contained. "
In 2008, Richard helped his mother to get things off New Zealand. Maria opened a gallery of high art in New York, where she also sold the paintings she painted. But if you do not know, you can not guess that the gallery owner Ana Tzarev is related to the billionaires Chandler. Maria took as a pseudonym the name and surname of her own mother, tells The New Zealand Herald.
Secrecy and once again secrecy
Chandlers literally cultivate an atmosphere of secrecy, wrote The Guardian. Their funds - that Sovereign, that Legatum - invest only their own funds. The absence of outside investors allows them not to disclose information, says The Sunday Times. But Richard explained the Institutional Investor somewhat differently: "Managers need to report to shareholders, which means their inappropriate fear of getting insufficiently good indicators. We invest only our own money. Our investment decisions are motivated by optimism, not fear. " Most managers think where they can make a mistake, instead of looking for what can be done right, Richard added.
Headquarters Legatum is located not in a more traditional financial center, like London, but in Dubai, where in 2012 the fund acquired its own building, said The Sunday Times. But the brothers have an explanation for this. Dubai attracts not only the tax regime, but also that is in the middle between the Asian and European time zones - the two most important markets, explained Richard Institutional Investor. In addition, the brothers believe that you need to invest at a distance. When they invested in Japanese banks, they did their best to avoid traveling to this country, so that personal impressions of the place and people did not affect the investment decision. Therefore, they did not set up their headquarters in London, where they could not avoid contact with colleagues, whose opinion could affect the brothers.
In 2006, the Institutional Investor editor traveled with Christopher and Richard from Monaco through Dubai to Singapore. The publication claims that this was the first interview in the life of each of the brothers. By the way, Richard was speaking mostly, and Christopher was silent.
The site of their main operating unit, the company Sovereign Global Investment, did not even mention their names, writes Institutional Investor. It was streamlinedly written that the foundation was created by "two New Zealander".
Even during the corporate war in South Korea, the brothers did not act publicly, having put themselves in front of the general director of his fund. SK Corp. strongly spoiled the image of New Zealanders, portraying the brothers as speculative investors, only thinking about how to make and escape quickly. The Chandlers even consulted what to do, with an expert in the region, the famous journalist Michael Brin. He urged them to give an interview to the Korean press, informing them of their position. But the advice was left in vain.
Chandler is an ideal candidate for espionage history. Together with his brother, he managed to turn $ 10 million into $ 5 billion, working in Russia, Brazil and a number of other countries. Participated in the corporate war in NLMK and helped "Putin's approximate control over Gazprom, according to The Mail on Sunday. In 2016 he became an EU citizen, having received a passport of Malta. He is extremely secretive, can not stand publicity and even on the list of the richest people in the world Forbes (though, for the last time in 2013 at 1342 place) instead of his photo was forced to put a silhouette.
Everything should be tough
The trouble with Christopher Chandler began last year. When the question of the Brexit scenario was solved, Boris Johnson and Michael Gove made every effort to persuade May into a tough option. They handed her a secret letter with their arguments. In November last year, The Mail on Sunday stated that in fact, another person was involved in writing this letter - Shanker Singham, director of economics at the British think tank Legatum Institute. He allegedly held at least seven secret meetings with ministers and officials responsible for Brexit.
The Legatum Institute was created with the money of Christopher Chandler. In 2016, his budget was 4.4 million pounds sterling. 3.9 million of them were received from the Legatum Foundation, which lists the income from Chandler's business - the investment holding Legatum Limited.
No laws were violated, recognizes The Mail on Sunday. But the story is not pretty. Moreover, senior research fellow at the Legatum Institute, Matthew Elliot, worked as general director of the Gowa and Johnson campaign, campaigning to vote for Brexit. The Mail on Sunday claims that in 2012 Elliott was courted by Russian diplomat Sergei Nalobin and helped him to create the organization Conservative Friends of Russia. And in 2015, Nalobin was deported from Britain on suspicion that he was involved in the murder of Alexander Litvinenko.
Gift on May Day
When Russia celebrated May Day, British Conservative Party representative Bob Sili said that Christopher and his brother Richard were the subject of "interest [of the French intelligence service] DST since 2002 because of suspicion of working for Russian intelligence." He and three other parliamentarians read it in the documents that came to them from the police of Monaco. The case is dated 2005, it describes the events from the mid-1990s. Standing on it the neck of S, according to the deputy, means a high or increased level of threat to France. The reliability of the documents was allegedly confirmed by sources in French, American and British intelligence. But just in case the deputy was insured and, accusing Chandler, took advantage of the law, which gives immunity from lawsuits with the accusation of libel.
"I never dealt with the Russian and any other intelligence," Christopher Chandler said in response. "The essence of their statements is not true. I am not and have never been associated with the Russian state in any form. There is no evidence to the contrary ... The prosecutors refused to provide me with the full text of the report for verification. Calling for an explanation and simultaneously hiding the document is clearly not fair ... <...> We do not have skeletons in the closet. Consequently, critics should fabricate accusations, creating guilt by associations, slander and insinuations. "
Islanders Chandlers
Billionaires Chandlers are from New Zealand. The history of their kind is a story about World War II, friendship and family, which was never sitting in one place.
The first data on Chandler belong to the beginning of the twentieth century, when Christopher's great-grandfather emigrated from Chicago to New Zealand and started advertising business, the newspaper The New Zealand Herald tells. He married his own secretary and died of anaphylactic shock when the youngest of his three children was only a year old. The two older sons chose the career of the pilots, they fought in the World War II on the Spitfireers and both died. The youngest, Robert, served on the trawler of Her Majesty's fleet, returned unharmed and joined the pile business led by his friends, father and two sons of Hillary. By the way, one of them, Sir Edmund Percival Hillary, is known as the first man to conquer Everest.
In 1955, Robert and his comrades went on a round-the-world trip and met his future wife Maria in Croatia, the daughter of a farmer who at one time worked as a mayor and was famous for anti-communist views.
In an interview with FT Maria recalled: "When I moved to New Zealand at age 19, it was a cultural shock. I felt like I was thrown into the primitive society of the Wild West. I was born in a two-story house in Croatia, in the historic city of [Trogir], whose Gothic cathedral is known all over the world and is protected by UNESCO. I was well versed in architecture, opera, literature. No one in New Zealand spoke on topics that I would like to talk to. Only about agriculture, the production of wool and how much lamb and beef were exported. "
How to make the area prestigious
In order not to go insane on the apiary, Maria persuaded her husband to change his occupation. They invested their own 5000 New Zealand dollars (about $ 40,000) and borrowed another 195,000 (about $ 1.6 million). With these funds, in 1972, the couple bought a small dilapidated building in an unmarketable area of Hamilton (New Zealand, about 110 km from Auckland), made luxurious repairs (including a colonnade) and opened a Chandler House boutique. While Robert was looking after the trade, Maria was traveling around Europe and Asia and buying laxtery goods. A little time passed and buyers from all over the country began to come to them. And the area where Chandler House was located, became a prestigious boutique center.
"[Mom] was the most brilliant businessman I've ever met, she taught us the basic principles that we follow in investing," recalled her son Richard in the pages of the journal Institutional Investor. For example, "never buy something until you understand who can sell it" or "buy as much as possible if the product is popular, and the offer is limited; when the competitors run out of stocks, Chandler House will break the jackpot. "
Farewell, London!
Robert and Mary had three sons. The elder, George, became an accountant, went to Canada, where he retired. The fate of the other two, Christopher and born a year before Richard, was much more interesting. Since childhood, sons have helped their parents in everything related to shops, from purchases to sales, including traveling with my mother abroad.
Richard was still trying to invest in New Zealand stocks at school, he told Institutional Investor. In 1979, he graduated from the University of Auckland with an accountant diploma, and two years later received a master's degree, defending a diploma in corporate management. During his training, he sent a questionnaire to all public companies of the island and conducted interviews with 200 directors. He will remain interested in corporate governance for the rest of his life, which then will bring a lot of headache to NLMK, Gazprom and the third-largest South Korean chaebol.
After university, Richard went to London to work for Peat Marwick International (now part of KPMG). He worked in the audit team, advising on acquisitions and restructuring. London struck the New Zealander. He joked that he seemed to have diminished and paced around the playing field of "Monopoly".
But a year has not passed since he was summoned back to his homeland. In 1982, my father became seriously ill, and the family needed help in doing business. My father later became better, but Richard has since worked only for the family. Like his brother Christopher, who graduated from the University of Auckland in 1982 with a law degree and was carried away by programming, he was also called to the aid of his father.
How the Brothers Believed the Communist Parties
Christopher and Richard began to expand the business. They opened a second boutique in Oakland. And then eight more throughout New Zealand and started three factories on tailoring. But the free time was coming to an end, the government increasingly regulated exports and trade. Before the Chandler came the choice: either the international expansion of their boutiques, or a test of strength in another business.
They persuaded parents to sell all the shops and in 1986 moved to Monaco. On the proceeds, less than $ 10 million, the brothers opened the investment company Sovereign, writes The Sunday Times. Their first major investment was the purchase of office buildings in Hong Kong in 1987. Real estate prices that year fell by 70%, as it became known that in 10 years, the UK will give this island to China. But the brothers believed the promise of the Chinese Communist Party that the status quo will continue for half a century. The deal was invested $ 5.8 million of its own funds from $ 27.6 million, the missing borrowed from banks. They repaired offices and leased out to generate cash flow for new deals, writes The New Zealand Herald.
By 1991, fear of China diminished, office space again went up. The Chandlers sold all the buildings for more than $ 110 million. After paying debts, they had $ 40 million left in the fund, some of which was received from other investments.
For example, in Hong Kong brothers not only invested in real estate, but also bought futures for the stock index Hang Seng. More than half of it consisted of securities of real estate companies, so that the brothers believed that their two investments in Hong Kong would show approximately the same yield. But they miscalculated.
In any case, they put the stop-loss. On Friday, October 16, 1987, the broker notified them that the quotes had broken a critical mark. Having burned and conferred, the brothers ordered the positions closed. This proved to be the right decision. On Monday, stock markets around the world collapsed, the Hong Kong Stock Exchange closed for three days. Due to the fact that since the purchase of shares their quotes had managed to grow, the brothers withdrew from this investment with $ 5 million profit. But since then, neither futures nor derivatives have been plodding.
How to convert $ 40 million into $ 150 million
The Chandlers told The Sunday Times that they are investing in companies and assets that are highly undervalued because of the riskiness. They are beckoned by sectors and economies, where information is difficult to access, and standard valuation methods do not work. After Hong Kong, they made the first serious investment in shares. It was in Brazil. It has just opened for foreign investors, and the brothers have become one of the main foreign players. For $ 30 million they bought at the end of 1991 1.5% of the monopolist telephony Telebras and a little more invested in the shares of the energy company Eletrobras. Because of hyperinflation, the yield ratio was absolutely impossible to calculate. But the brothers estimated that Telebras, in the words of Richard, "was the cheapest telecommunications company in the world."
Over time, the Chandlers increased the staff of the Sovereign fund to 20 people, but they themselves remained the main driving force of business. Investment ideas were born in the disputes of the brothers, while they were studying the psychology of the market, global trends, technical analysis, writes Institutional Investor. "I'm analyzing and coming up with a concept," Richard explained. "Then I show it to Christopher and I ask:" Is this madness or not? "Nobody is better than Christopher to predict what will happen to the business in five or 10 years, says Richard.
From January to April 1992, Brazilian assets tripled. And then the stock market collapsed. The brothers were worth a lot of nerves, but they waited until the trend turned around and allowed them to go into profit.
Between 1991 and 1994 The Chandlers invested not only in Brazil, but also in Venezuelan, Argentine, Cuban and Nigerian companies. As a result, with $ 40 million, their fund has increased to $ 150 million.
Chandlers in Russia
After Brazil, the Chandlers switched to Eastern Europe, where, after the collapse of the USSR, there were problems with the availability of information, and with reliable estimates. They bought the shares of the Czech electricity holding monopoly CEZ in a matter of months after the listing of the company on the Prague Stock Exchange in January 1994. Foreigners could not then buy these shares. But along with other companies, the brothers created the GDR program for CEZ and in late 1994 they withdrew from the investment with a modest, on their assurances, profit.
Secret charity
Christopher Chandler does a lot of charity work, but little is known about that either, The Guardian was surprised in 2008, when it suddenly became clear that Chandler had invested $ 50 million in creating a business school in the United States. It creates and develops business ideas that will help low-income countries get out of poverty. On the first stream, The Legatum Center for Development and Entrepreneurship, which is still working at the Massachusetts Institute of Technology in Boston, recruited a dozen students. Including the natives of Rwanda, Nigeria and Pakistan. Ikbal Qadir, the former Wall Street banker, the founder of Grameenphone, supervised the center. The initial business idea is to develop cellular communications in the countryside of Bangladesh, enabling telephones owners to sell minutes of conversation to friends and neighbors. Now Grameenphone is the largest mobile operator in this country. Among the projects of the Legatum center are rainwater harvesting in East Africa, an incubator for mobile start-ups in Pakistan, telemedicine in Nigeria, selling to the West so rare and exotic species of wood that some even have no English names, and even a start-up for the commercialization of South Asian art, opened in the center of London. "We founded, financed, developed and continue to support organizations that have improved the lives of more than 270 million people in more than 110 countries," wrote Christopher on the website of the Legatum Foundation in May this year. - Today, the work of [our charitable] foundation is focused on the de-worming of children (the END fund), the fight against modern slavery and trafficking in human beings (the Freedom Foundation) and the return of tens of thousands of refugees and stateless people to school (the Luminos Foundation).
In late 1993, they began to buy vouchers in Russia, says Institutional Investor with their words and explains that until June 1995, when the RTS opened, there was no classical stock exchange in Russia. By the end of 1994, they were able to accumulate 4% in RAO UES, 11% in Mosenergo, 5% each in Yukos's three main production sites, 15% in NLMK, and a little more in Gazprom the size of the package was not disclosed). The investment criterion was simple: capitalization was less than the value of company assets, the brothers explained. In total, they invested a little more than $ 194 million in Russia and considered themselves to be one of the largest foreign investors.
When in 1996, control over YUKOS moved to the bank "Menatep" Mikhail Khodorkovsky, the Chandlers sold the shares and bought another 10% of NLMK, receiving 25% plus one share. But they had a suspicion that with the help of transfer prices, NLMK products are exported to intermediary exporters belonging to the management of the company at understated prices, they explained to Institutional Investor.
The Chandlers merged with another shareholder, also owning 25% of NLMK, the Sputnik fund, the structure of Renaissance Capital by Boris Jordan. In 1997, they began to sue, trying to bring their representatives to the board of directors. But they were confronted with the Russian realities. As Kommersant wrote at the time, at the NLMK shareholders meeting, candidates for the board of directors from Renaissance Capital, IFC and Cambridge Capital Management "for technical reasons" disappeared from the lists in the ballot papers. The company ignored the requirement of shareholders to conduct an independent financial audit with mandatory disclosure of the audit results. But even before the end of the judicial battles, Sputnik sold its package. In 1999, they withdrew from NLMK and Chandler.
In 1997, Chandlerov became concerned about the system of Russian state short-term bonds. They considered it a pyramid and decided, until things went too far, to get rid of these papers. Sold in that year 4% in RAO UES for $ 700 million and 11% in Mosenergo for $ 300 million in total brought them a profit of 416%, they recalled in a conversation with Institutional Investor.
In November 1997, the first wave of the GKO crisis took place. By February 1998, the brothers decided that the market had already fallen and invested $ 1 billion from the sale of electricity assets to Gazprom, where they became the second largest foreign investor. They had slightly less than 5%, Ruhrgas - slightly more than 5%.
But August 1998 reduced the cost of this investment to about $ 200 million. To upset the brothers did not particularly become. They decided that they hurried with the purchase, but "this does not mean that Gazprom is a bad company; it was a great company, "quotes Christopher Chandler Institutional Investor.
But in 1998, the "great company" showed a loss of $ 7 billion, the next - at $ 2.8 billion. As in the case of NLMK, the brothers decided that all the profits are settled by the intermediaries, and again got involved in the struggle for the quality of corporate governance . They supported the chairman of the UFG, Boris Fedorov, in an attempt to displace Gazprom's chairman Rem Vyakhirev.
The whole business in the Czech Republic on one site: allcz.org. Restaurants, pubs, hotels, resorts, companies, institutions, museums, car services.
The Chandlers regularly received proposals from Gazprom management to sell their shares at a price that would provide them with some profit. Quotes of Gazprom were such that, if they sell the securities on the market, it would be necessary to fix a significant loss. "We only think about [invested] in Gazprom means, we would simply take money," Richard Institutional Investor said. - But it was not about money. In Russia, as we believed, we will be able to destroy the culture of fraud, if everyone follows the lead of the leader, and such a leader was Gazprom.
In July 2000, relying on Sovereign and other minority shareholders, Fedorov was able to become a member of the board of directors of Gazprom. Given that in the 11-seat council five seats belonged to the representatives of the state, this changed the balance of power. The following year, Rem Vyakhirev at the helm was replaced by Alexey Miller. By their merit, the Chandlers were said to have helped to establish "transparency and accountability" in the company, The Mail on Sunday cites.
A source close to Sovereign told Vedomosti that in 2003 the Chandlers decided to sell the stake in Gazprom. This money will bring much more profit, if you invest them in Southeast Asia, the brothers decided. In June 2003, they offered a deal to Miller, but were late. The state has already gained control over the monopoly and did not need additional votes. Sovereign had to sell its shares in the stock market, getting rid of the package by January 2004. For more than four years, the brothers earned only 12.5% on Gazprom, the agency concludes.
Japan and Asia
In November 2002, the Japanese economy fell into recession after a decade of stagnation. The Nikkei 225 index was 78% less than at the peak of 1989. The brothers noticed how cheap the shares of local banks became. They decided that either the Japanese nationalize them, or they will take up the economy, reducing the interest rate. Probably the last, the Chandlers thought, and laid out $ 570 million for 5.1% of UFG Holdings, which a year earlier recorded a loss of $ 9.3 billion. Bought more than 3% of Mizuho Financial Group and shares of other banks, spending a total of about $ 1 billion. They have not lost. In 2003, the Japanese economy began to recover. Nikkei 225 by the summer of next year increased by 50%. Investments paid off with interest.
Large bets
The Chandler strategy is to make few bets, but big ones. As a rule, Sovereign simultaneously held the papers of less than a dozen companies, invested in them for 2-5 years. Preference was given to large companies in large countries. Foreign investors are already looking to them, and then it is possible to resell shares favorably. The ratio P / E ratio should be less than 3, explained Richard Institutional Investor. In 2006, this magazine estimated the profitability of a number of Sovereign investments. SK Corp. in 2003-2005. showed a profitability of 433%, increasing the initial $ 168 million to $ 896 million. The package in Unified Energy Systems in 1993-1997. brought 430%, rose in price from $ 132 million to $ 700 million. Mosenergo (1993-1997) showed 383%, $ 62 million increased to $ 300 million. Shares of Mizuho Financial Group at the time of the interview were not sold yet, but invested in In 2003, $ 600 million turned into $ 2.7 billion. UFG Holdings grew by 156% from 2002 to 2004, from $ 570 million to $ 1.46 billion.
In 2003, the Chandlers decided to invest in South Korea. $ 168 million was given for 14.82% stake in the country's third largest chaebol - SK Corp. Perhaps they would have bought a larger package, but then it would have been necessary to declare the redemption of securities from the remaining shareholders.
Christopher told Institutional Investor: "We have altruistic motives that some investors who are looking for ways of least resistance understand with difficulty. But we do not want to be judged on corporate wars. We are investors using a value strategy with a sense of responsibility, not activists. "
Nevertheless, the corporate war has not been avoided in Korea either. Two years the Chandlers fought for the dismissal of the chairman of the board of directors and CEO of SK Corp. Che Tawona. Only one of the campaigns, under the slogan "Get up, Korea!", Spent $ 4 million.
Efforts were not in vain. In 2004, a number of their proposals were adopted to improve corporate governance. Seven of the 10 seats on the board of directors were taken by independent candidates, the company began to increase dividends, lowered the debt burden, issued a transparent financial report and established a committee that controls transactions with third parties, analysts interviewed by Institutional Investor said. But Che Tawon never gave the reins of government. In 2005, the brothers gave up and left the investment, receiving 443% more than they invested.
Not Mary, but Ana
By 2006, the Institutional Investor Magazine estimated the brothers' fortune at $ 5 billion, Forbes - at $ 2 billion. But that year the brothers decided that it was time for everyone to go their own way, and divided the business. Each, according to their assurances, got exactly half of the assets.
Richard opened an investment company Orient Global. Christopher - Legatum. Prior to the division of property, they were second on the list of the world's richest New Zealanders, behind only the manufacturer of paper and packaging materials, Graham Hart. But, as The Guardian writes, they completely forgot their homeland. The maximum that the New Zealand Herald managed to find out about their connection with the island: Christopher, Richard and their father somehow went to the London stadium "Twickenham" to watch the New Zealand rugby team play All Blacks. The nearest investment to the country was Richard Chandler's investment of 150 million Australian dollars in Tasmanian forest company Gunns, whose shares fell from 4.8 Australian dollars to 9 cents from 2005 to 2012, so the government thought about its salvation.
As the correspondent of New Zealand's Waikato Times wrote: "[The Chandlers] were out of sight. But, even when living [at home], they were very self-contained. "
In 2008, Richard helped his mother to get things off New Zealand. Maria opened a gallery of high art in New York, where she also sold the paintings she painted. But if you do not know, you can not guess that the gallery owner Ana Tzarev is related to the billionaires Chandler. Maria took as a pseudonym the name and surname of her own mother, tells The New Zealand Herald.
Secrecy and once again secrecy
Chandlers literally cultivate an atmosphere of secrecy, wrote The Guardian. Their funds - that Sovereign, that Legatum - invest only their own funds. The absence of outside investors allows them not to disclose information, says The Sunday Times. But Richard explained the Institutional Investor somewhat differently: "Managers need to report to shareholders, which means their inappropriate fear of getting insufficiently good indicators. We invest only our own money. Our investment decisions are motivated by optimism, not fear. " Most managers think where they can make a mistake, instead of looking for what can be done right, Richard added.
Headquarters Legatum is located not in a more traditional financial center, like London, but in Dubai, where in 2012 the fund acquired its own building, said The Sunday Times. But the brothers have an explanation for this. Dubai attracts not only the tax regime, but also that is in the middle between the Asian and European time zones - the two most important markets, explained Richard Institutional Investor. In addition, the brothers believe that you need to invest at a distance. When they invested in Japanese banks, they did their best to avoid traveling to this country, so that personal impressions of the place and people did not affect the investment decision. Therefore, they did not set up their headquarters in London, where they could not avoid contact with colleagues, whose opinion could affect the brothers.
In 2006, the Institutional Investor editor traveled with Christopher and Richard from Monaco through Dubai to Singapore. The publication claims that this was the first interview in the life of each of the brothers. By the way, Richard was speaking mostly, and Christopher was silent.
The site of their main operating unit, the company Sovereign Global Investment, did not even mention their names, writes Institutional Investor. It was streamlinedly written that the foundation was created by "two New Zealander".
Even during the corporate war in South Korea, the brothers did not act publicly, having put themselves in front of the general director of his fund. SK Corp. strongly spoiled the image of New Zealanders, portraying the brothers as speculative investors, only thinking about how to make and escape quickly. The Chandlers even consulted what to do, with an expert in the region, the famous journalist Michael Brin. He urged them to give an interview to the Korean press, informing them of their position. But the advice was left in vain.
Governance
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