The Money Behind Yevgeny Prigozhin and the Wagner Group

The Funding Behind Prigogine

After the weekend’s turmoil in Russia, global markets were fairly calm on Monday morning. And after Mr. Prigozhin’s march to Moscow was cancelled, neither Russian President Vladimir Putin nor the rebellious military staff officer Yevgeny Prigozhin heard from him.

But experts say the millions of dollars Prigozhin has spent building a multinational corporation, as the Kremlin has put pressure on the man who initiated the biggest challenge to Putin’s authority in Putin’s 23-year rule. I anticipate that they will try to limit the means by which they can finance large scale businesses. .

The incident exposed deep cracks in the Kremlin’s war machine. Unsettled conditions have pushed the ruble down and commodity markets are expected to be in turmoil for months. European natural gas prices surged this morning, and Brent crude oil also rose. (European equities and U.S. futures trading have been mixed.)

“The risk of further civil turmoil in Russia must be factored into oil analysis in the second half of the year,” Helima Croft, head of global commodities strategy at RBC Capital Markets, said in an investor note this morning. Rising commodity prices could put further pressure on central banks already struggling to keep inflation under control.

Who is Mr. Prigogine? Europe and the US have tried for years to shut down Prigogine’s sprawling operations. Prigozhin, who is on the FBI’s most wanted list, is rapidly rising in Putin’s Russia, funding his private mercenary business, the Wagner Group, from the president’s favorite eatery. It has reached the point of winning a large contract. Founded in 2014, Wagner has fought wars and trained militias in politically rebellious countries, making it Putin’s go-to force should military campaigns fail in countries like Syria and Ukraine. .and Wagner’s Internet Troll Farm the goal Western democracy and elections, including the 2016 US presidential election.

Wagner is a ‘brutal’ transnational criminal organization, According to the Ministry of Finance. Ebropolis is a Prigogine-related company that won energy concessions in Syria in exchange for military aid. In Sudan and the Central African Republic, Wagner has stepped up his mining operations to help raise capital.

To evade sanctions and hide his finances, Wagner often demand payment Transportation of gold, diamonds, oil and gas.financial times Estimate Between 2018 and 2021, Wagner generated about $250 million in revenue from its natural resource holdings.

Prigogine also draws on a global network of corporate lawyers. To fend off Western authorities, according to Another FT report. The Treasury Department has identified business partners supporting Wagner’s fight in Ukraine. Two Russian companies, Terra Tech and AO BARL, and the Chinese company Spacety, which provides satellite imagery to the group.

Mr. Putin has been weakened by the rebellion, but what will he do in the future? Bill Browder, a former Russian investor who has become one of Putin’s biggest critics, told Dealbook that the president will do whatever it takes to reassert his authority. “Unless he shows that he is so brutal that everyone needs to deal with him, this is the beginning of the end. Reconstruction will require a massive crackdown,” he said.

Alexander Gabuev, director of the Carnegie Russia-Eurasia Center, told Dealbook that Putin may not be done yet. “This may also be a sign of dysfunction, but he’s very good at adapting and finding ways to survive. His greatest talent is staying in power.”

what is going on here

China’s currency hit a seven-month low against the dollar. RMB is face constant pressure From the slowdown of the Chinese economy decrease in consumer spending. A weaker yuan will help Chinese exporters by lowering commodity prices abroad, but domestic businesses are likely to suffer.

Britain plans to curb ‘grieflation’. The country’s Finance Minister Jeremy Hunt is scheduled to meet with regulators this week to discuss ways to prevent corporate misconduct. raise the price too much. The move signals a change in the government, which has so far been more lenient on reports of profiteering, at a time when Britain is plagued by persistently high inflation.

Wall Street keeps swinging its axe. goldman sachs is in the process of firing 125 managing directors around the world. JP Morgan Chase Bloomberg reports that the firm will cut 40 positions in its investment banking division in North America. The move comes as banks look to cut costs amid a prolonged slump in deal completion.

SpaceX is reportedly pursuing a $150 billion valuation. Elon Musk’s rocket company New round of employee stock sales According to Bloomberg, the deal would lift the company’s valuation from the $137 billion it won in January. This comes amidst SpaceX’s continued success in launching rockets and expanding his Starlink satellite-based internet service.

Ryan Reynolds and Redbird bet on F1

The fusion of Hollywood and motorsport was announced Monday as investment in sports teams heats up. A group that includes actor Ryan Reynolds will acquire a 24 percent stake in Renault’s Alpine F1 team. This is the latest bet on sports team ownership and the massive sponsorship and media rights deals it generates.

Transaction contents: Redbird Capital Partners (which owns shares in Fenway Sports Group and AC Milan), Otro Capital and Reynolds’ Maximum Effort Investments have announced a €200 million (2 18 million). Actors Michael B. Jordan and Rob McElhenney also participated in the investment.

This is the first deal for Otoro Capital, which was spun out of Redbirds to invest in sports teams, and Alec, who previously worked for the NFL’s Dallas Cowboys and then ran business operations for the Cleveland Browns. Led by Shiner. Shiner will join Alpine’s board of directors.

It’s a bet on continued US interest in F1. The sport has skyrocketed in popularity in the United States since it was sold to Liberty Media in 2017. This was largely thanks to the Netflix series Drive to Survive, which pushed the competition’s attendance and overall fandom to new heights.

Renault wants to continue building the Alpine brand. The team, which finished fourth in last year’s F1, is a key showcase for the French carmaker’s EV prowess, which aims to make more than half of its sales from electric vehicles by 2030.

Buyers have had a lot of success profiting from sports teams.

• Redbird purchased 15% of its shares. Rajasthan Royalshas joined the Indian Premier League cricket team in 2021. The Cricket League sold its broadcasting rights for a record price, making the investment worthwhile.

• And in 2020, Reynolds and McElhenney bought Welsh bottom-tier football club Wrexham AFC, turning it into a media phenomenon thanks in part to the hit reality TV series Welcome to Wrexham.

“They looked at us like, ‘Would you like to help us across all the areas where we’re successful in the US: ticketing, hospitality, sponsorships, licensing, merchandising, content?’ I was looking at it,” Shiner told Dealbook.

Law giant closes in on Saudi Arabia

Big Low is looking to capitalize on a flurry of investments in Saudi Arabian oil to boost its wealth as global trading gets stuck in a rut. Among them are now major companies such as Kirkland and Ellis, open a shop in the kingdomwill join the likes of Latham & Watkins and Greenberg Traulig, the Financial Times reports.

However, doing so can lead to unpleasant internal conflicts for some companies.

A major law firm’s foray into Saudi Arabia is a potential conflict between the liberal values ​​espoused by senior officials in the United States and elsewhere, and the human rights situation in Saudi Arabia, where dissidents continue to be imprisoned and homosexuality remains a capital offense. cause conflicts. …

U.S. law firms have come under increasing political pressure to fire certain clients, with attorneys Kirkland & Ellis last year following widespread outrage over the Texas school massacre. , parted ways with two star attorneys who represented the National Rifle Association, a gun lobby group. Other companies have refused to work with anti-abortion groups and opioid manufacturers, and former President Donald Trump and his associates have been turned down by many elite organizations.

Some leading lawyers have defended their firm’s growing ties with Saudi Arabia, stating that “we are committed to the local customs, religious views and beliefs of every jurisdiction and culture we enter.” We don’t judge our values ​​in isolation,” Richard Rosenbaum, executive chairman of Greenberg Traulig, told the FT. We are not in a position to make such judgments. “

“The term ‘ESG’ is misused by the far left and the far right, so I won’t use it.”

— Larry Fink, CEO of BlackRock. Speaking at the Aspen Ideas Festival, Fink, a longtime advocate of factoring environmental and social concerns into investment decisions, said the generic term for the strategy was too politicized. (He reiterated that he has not abandoned the principles of ESG investing per se.)

next week

Inflation data, a gathering of big central bank governors, and the earnings of big consumer-focused companies will be the focus of attention. Highlights include:

Tuesday: The Conference Board will release its latest Consumer Confidence Report. Walgreens Boots reports earnings for the third quarter of the fiscal year.

Wednesday: The European Central Bank concluded that: annual forum in Sintra, Portugal. Central bank leaders, including Fed’s Jay Powell, ECB’s Christine Lagarde and Bank of Japan’s Kazuo Ueda, will discuss monetary policy there. The Fed has set publish the results It is the result of the annual bank stress test and is the first major report on lenders since the Silicon Valley Bank collapse.

Microsoft CEO Satya Nadella and his counterpart at Activision Blizzard, Bobby Kotik, are in the final stages of public hearings related to the FTC’s effort to block the $70 billion deal. I plan to testify to this day.

Thursday: Nike and H&M publish quarterly results.

Friday: Japan and the Eurozone release their latest consumer price index reports. The Department of Commerce will also release an updated report on consumer spending.

speed reading

Information of sale

• Western banks worry that rising tensions between the United States and China will hinder their policy efforts. Syngenta’s Shanghai IPO, an agrochemical giant. (FT)

• IBM agreed Buy Apptiodevelops software for managing information technology for $4.6 billion. (IBM)

• Junk bond sales increase — because the issuer offers potential buyers even more protection. (WSJ)

policy

• Gerson Lehmann GroupThe firm, which connects a network of clients and industry experts, is reportedly laying off employees in China as the Chinese government cracks down on Western consulting firms operating in the country. there is (FT)

• Centrist political group No Labels is calling for West Virginia Democratic Senator Joe Manchin to run for president by a third party, but has not said so. who is funding the effort. (Politico)

best of the rest

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