Page 44 - bne_March2019_20190306 magazine

44 Opinion bne March 2019
MOSCOW BLOG:
Is the arrest of US fund manager
Michael Calvey a litmus test for Russia?
Ben Aris in Berlin
The arrest of Michael Calvey on February 14 on “large- scale embezzlement” charges sent shockwaves through Russia’s investment community.
One of the best known, most successful and personally well-liked figures in the Russia investment community, Calvey has been both a savvy investor and at pains to keep his head down. He never comments on politics and is known as a straight shooter.
The success of his fund Barings Vostok Capital Partners (BVCP) relies entirely on smart calls and it has made a string of “home runs,” as US citizen Calvey has told me in a string of interviews over the years. He invested in incumbent mobile phone operator VimpelCom at its launch, before it was called VimpelCom, and turned a $5mn investment in Yandex when it set up into a $4bn stake when it eventually IPO’d in 2011, among many other good calls.
News swept the markets
The news of Calvey’s arrest quickly swept the markets in London and then New York. “What in God’s name is going on
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over there with MC?!” a well-known fund manager in New York asked me in an email after she woke up to the news. “Yes – this is a crucial juncture as it will tell everything you need to know by which way it goes.”
The consensus is that Calvey’s arrest is “business as usual” in a Russian corporate dispute. Calvey is in jail accused of illegally
“What in God’s name is going on over there with MC?!”
under-pricing shares in the regional retail bank Orient Express Bank (OEB, aka Vostochniy Bank), in which Baring holds a 52.5% stake. The bank ran into trouble in 2015 following the heavy devaluation of the ruble and was recapitalised by the shareholders in 2018. BVCP is accused of illegally making $37mn from the pricing.
An argument sprang up between Barings and its Russian
Calvey: known for never commenting on politics and as a straight shooter.