Bill Browder, formerly the largest foreign investor in Russia, at one point made an 850% return in 18 months investing in the country. But in an interview with Yahoo Finance, Browder vehemently warned investors against following his lead.
“You don’t just risk losing your money in Russia, you risk dying in Russia,” Browder said. “I don’t say that lightly.”
Browder lost 90% of his investors’ money in 1998 when his assets fell from $1 billion to $100 million following the Russian financial crisis. But that wasn’t the worst thing that happened to him in his ventures.
He went on to rebuild his fund, growing assets from $100 million to $4.5 billion, while pointing out misdeeds from Russian oligarchs. Later, he was detained at the Moscow airport and banned from the country. And the local lawyer he hired to handle his affairs, Sergei Magnitsky, was found to have been tortured and killed. This prompted Browder to lobby for what became the “Magnitsky Act,” which freezes assets and bans visas of Russian human rights violators.
“Sergei Magnitsky, my lawyer, is dead,” Browder said. “They tried to kill the families’ lawyer by throwing him off a fourth floor apartment building. A member of the Russian opposition who’s helped us with the Magnitsky campaign was poisoned within an inch of his life. A whistle blower who came forward died jogging outside his home in Surrey. They kill. And they kill lots of people. And all it takes is one wrong step doing business in Russia and you’re dead.”
“I came from this family of communists and I decided to rebel as a teenager and became a capitalist,” Browder said. “When the Berlin Wall came down, I said if my grandfather was the biggest communist in America, I want to become the biggest capitalist in Eastern Europe.”
While Browder initially thought there would be upside, he now says there is no opportunity and lots of potential danger.
“This place is absolutely completely uninvestible,” Browder said. “I would advise everyone to stay as far away from Russia as possible.”
Meanwhile, sanctions imposed by the Magnitsky Act along with those imposed after Putin’s Ukranian aggression are unlikely to be lifted, Browder explained. For him, this makes Russia even more unattractive as an investment.
“I cannot imagine a scenario given what’s going on where the sanctions will be repealed,” Browder said. “So those investors that are betting on sanctions being lifted are probably making a bet that’s not going to work out.”
Nicole Sinclair is markets correspondent at Yahoo Finance.
More from Bill Browder:
Fund manager explains why he estimates Putin’s net worth to be $200 billion
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