Feature
A Tsar is born
by Matt Nippert
How a boy from Taranaki found Russian gold.
Who is New Zealand’s richest man? Billionaire takeover king Graeme Hart? Warriors owner Eric Watson? Fund manager Richard Chandler – or his equally wealthy brother Christopher?
None of the above, says Jules Evans. The Moscow-based journalist recently interviewed Stephen Jennings for the British magazine the Spectator and his subject, a Kiwi expat who runs the Moscow-based global investment bank Renaissance Capital, is described by a fellow banker as the “only foreign oligarch in Russia”.
Evans says Jennings is “a major player in Russian finance, perhaps the leading Russian broker – and Russian finance is very big business”.
Two years ago the London-based weekly paper Financial News, which annually ranks the most influential people in European capital markets, flagged Jennings as a “rising star”. Last year he entered the top 100 in 92nd place: this year he’s 76th.
Renaissance has offices in New York, Geneva, Dubai, Hong Kong, London and Lagos and dominates the Ukrainian sharemarket from Kiev. And this year it began expanding into sub-Saharan Africa.
Having been told by Jennings that his stake in the unlisted business is 80 percent, Evans has calculated that the boy from Taranaki could be worth as much as $6 billion.
If that’s true, then it would make the virtually unknown Jennings – whose name has graced the pages of our leading newspaper, the New Zealand Herald, only three times in the past decade – New Zealand’s richest man.
Last year Hart topped the National Business Review’s Rich List with a relatively modest $2.75 billion. Jennings made his first appearance on the list, at No 28, but information was scant. Lacking even an age for him (he’s 47), NBR noted: “His wealth could be much higher than $200 million, but disclosure from Russian banks is notoriously poor.”
Jennings did, however, rate 21st on Forbes magazine’s Australasian Rich List, published earlier this year. Contributing editor Justin Doebele, who helped compile the list, says Jennings’s overseas experience is typical of high-net-worth New Zealanders – namely, he had to leave the country to get super-rich.
Of the top five New Zealanders on the Forbes list, only two are based in their home country – Hart and Lynette Erceg, the widow of alcopop baron and Independent Liquor founder Michael Erceg. (The Dubai-based Chandler brothers, who recently split their $5.2 billion fortune between them, round out the list.)
Interviews with observers and experts in Russia and London, as well as with former colleagues in New Zealand business and academia, paint an extraordinary picture of Jennings’s rise to the heights of global capital, but the man himself declined, through a Moscow PR representative, to talk to the Listener.
“He’s not a person who would seek or want a public profile,” says Bryce Wilkinson, an economist with Capital Economics who moved in the same circles as Jennings in the late 1980s. “He just gets on and does things. He’s just an unassuming Kiwi, really.”
Born in Waitara, Jennings went to school in Oakura and studied business and economics at Massey and Auckland universities before entering employment in 1984. He worked on deregulation and privatisation, first with Treasury and later with CS First Boston (see box overleaf).
Professor Vernon L Smith spent two months of 1991 working with the Wellington CS First Boston office, and later thanked Jennings in an academic article on New Zealand’s electricity reform.
Now at George Mason University in Virginia, Smith – who jointly won the Nobel Prize for economics in 2002 – remembers Jennings as a “competent, entrepreneurial and energetic actor in the New Zealand privatisation movement”.
After a short spell in CS First Boston’s London office, in 1992 Jennings was sent – along with colleague Boris Jordan – to jointly head up a new Moscow office.
“They made a terrible mistake,” Jennings told the Spectator of the decision to pair him with Jordan. “They put two of the biggest mavericks in the firm next to each other.”
On Christmas Day, 1991, the Soviet flag was flown from the Kremlin for the last time and, once Boris Yeltsin took power, the Russian economy was flung wide open after 70 years of state control. Jordan and Jennings were engaged as consultants with Harvard University’s Russia project, an initiative funded by the US Government and intended to modernise the Russian economy.
Jordan, an American whose grand-parents had fled Russia after the 1917 revolution, told PBS in a revealing interview in 2000 that he and Jennings provided the practical element of a vast privatisation programme.
“The problem lay in that they [the Harvard academics] were largely lawyers and theoreticians who did a fantastic job putting the framework together,” said Jordan, “but to put that into practice, none of them had the experience. That’s why they brought in people with investment banking backgrounds – to show them how to sell the assets.
“My partner, Stephen Jennings, and I were heads of this process.”
Jordan, who was then just 27 – Jennings was 32 – said the Russia project represented the opportunity of a lifetime for a young moneyman.
The privatisation programme called for the distribution of 144 million vouchers to Russian citizens, who could then use them to bid in auctions for state assets. Ideally, this would create a broad base of public ownership.
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