Sberbank Asset Management Jumps to No. 1 on Russia 20

Sberbank Asset Management rockets from seventh place to first on the Russia 20, Institutional Investor’s exclusive annual ranking of the country’s largest money managers. It was the only firm to expand in dollar terms in the 12 months through June; in aggregate, assets under management of the Russia 20 shrank by 22 percent.

Sberbank’s ascension bumps rival VTB Capital Investment Management down a notch to No. 2. Rounding out the top five are Region Group, Kapital Asset Management Group and TransFinGroup Asset Management — firms closely linked to state oil giant Rosneft, private oil power Lukoil and state-owned Russian Railways, respectively.

Transparency and competition are making limited headway against this powerful oligopoly, outsiders complain. “Our real competition is different in-house projects and schemes in real estate and other nonmarket instruments,” says Vladimir Tsuprov, chief investment officer for TKB BNP Paribas Investment Partners, which drops from fifth to eighth place. Tsuprov’s employer’s name became a misnomer this summer when the outfit was acquired by a previously obscure Russian entity called Alor Group. (BNP Paribas refused to provide details of the transaction.) Its exit leaves London-based Prosperity Capital Management as the only member of Russia’s top ten that caters to foreign investors.

Another tarnished bright spot for Russian asset managers has been the local bond market, which has offered impressive nominal returns while avoiding the massive defaults many feared when the West imposed a lending boycott last year to protest Russia’s support for separatists in Ukraine. Corporate bonds rated triple-B or better offer yields in the 12 percent range, and managers straying into junk territory can earn 14 percent, says Aylin Suntay, a Turkish financier who heads No. 7 Gazprombank Asset Management, an arm of the house bank of Russia’s state-owned gas giant. But these gains struggle to keep up with inflation, which hit 15.8 percent in August.

Click on Russia’s Top 20 Money Managers in the navigation table at right to view the full list. Subscribers can access additional data, including details on the firms’ portfolio mixes. For information on how this ranking was compiled, click on Methodology.