The super-rich in Russia, ranked among the world's top 500 wealthiest individuals, lost $83 billion according to Bloomberg's Billionaires Index. Amidst severe crashes, the Russian central bank had to halt trading on the stock market yesterday (Monday), indicating that some losses may have been mitigated. Shares of Russian companies listed in London fell, with Novatek's gas production shares and Severstal's steel manufacturing shares dropping over 50% on Monday after the United States, the United Kingdom, the European Union, and other countries intensified sanctions.
In addition to paper losses, the sanctions are increasingly impacting within Russia. Flying on Boeing, Gulfstream, and Bombardier aircraft has become more difficult now that the EU joined the UK on Sunday in banning private jets owned by Russians from its airspace. Moreover, the secret purchases of luxury real estate in London may also become harder for Russians, with fast-track legislation in the UK requiring foreign property owners to disclose their identities instead of hiding behind holding companies.
Losses since the beginning of 2022 have reached around $83 billion. This comes as the EU adopted sanctions on some of the wealthiest individuals in Russia on Monday, including metals magnate Alisher Usmanov and owners of the Alfa Group, Mikhail Friedman, Peter Aven, and steel tycoon Alexey Mordashov. Alongside the sanctions already in place in the US and the UK, this latest round of targeted measures indicates that governments may view the wealthy elite in Russia as another key pressure point while Putin continues his invasion of Ukraine.
Russia's economy, valued at $1.5 trillion, is already suffering from sanctions targeting major banks that may prevent Putin from accessing the bulk of the central bank's reserves exceeding $640 billion. Lukoil PJSC’s president, Vagit Alekperov, experienced a decline in his net worth of approximately $13 billion this year, the largest drop among 22 Russian billionaires on Bloomberg's Billionaires Index. Shares of the British oil company traded in London fell by 62.8% on Monday.
Meanwhile, Gennady Timchenko, one of the first individuals sanctioned by the UK, saw almost half of his net worth evaporate this year, with a loss of $10.6 billion. Leonid Mikhelson, a stakeholder in Novatek, also lost $10.2 billion in wealth in 2022. The Ukrainian crisis has also heightened focus on Roman Abramovich, one of the most well-known billionaires with assets that include a stake in the steel company Evraz Plc and Chelsea Football Club.
Abramovich transferred control of Chelsea Football Club to the charity trustees of the English Premier League club on Saturday. A spokesperson mentioned that Ukraine had also contacted him to help mediate peace with Russia. Besides the football club, which could be valued at over $2 billion, many of his other assets are also located outside Russia or listed on foreign exchanges. He has stakes in Evraz, energy firms Velocys Plc and AFC Energy Plc, while his stake in technology company Yandex is listed in the US. He also owns properties in Israel, where he holds a passport, and France, along with a mansion near Kensington Palace in London’s billionaire row. Property records in New York show that he transferred a massive mansion in the Upper East Side to his ex-wife in 2018.
Abramovich's 55-year-old wife, currently not listed on the UK sanctions list, has a fortune of approximately $13.9 billion, down about $5 billion this year according to Bloomberg’s wealth index. To evade EU sanctions, an Usmanov-owned Airbus A340 departed Munich on Monday, leaving EU airspace.
