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Russian investors take conservative approach to wealth

The number of wealthy Russian investors employing a conservative wealth management strategy has more than quadrupled in two years, according to a report due to be released by Campden Research next week.

Twenty three per cent of participants said their wealth management objective was to preserve wealth, while 42% employed a balanced approach, and 35% sought growth, according to the Russian Entrepreneurship Report 2015.

Two years ago, the figure seeking wealth preservation was 5%.

Russia’s economic outlook has worsened significantly over the last 12 months, with Russia’s finance minister announcing earlier this year that the country’s economy would shrink 3% if oil prices remained low.

According to the report, respondents said they would ideally allocate 25% of their portfolio to real estate and direct investments, and a further 24% to cash. The remainder of their portfolios was split between emerging market equities, alternative investments, developed equities, fixed income, and derivatives.

One investor quoted in the report said the “current situation” had impacted the way they managed their money. “I had to change my investment strategy to become conservative; instead of growth I currently prioritise the protection of the investments and I aim to minimise risks.”

Macroeconomic and geopolitical risks were the most pressing concerns for investors, with those resident in Russia listing cash flow and market volatility as the most significant business challenges.

Corruption, which had been identified as the most pressing challenge in the 2013 study, was at the bottom of the list this year.

Interestingly, the report found respondents considered political stability one of the most beneficial conditions in Russia currently, with 40% describing it as good or excellent.

The report, due to be released 1 April, surveyed 30 Russian entrepreneurs with individual private wealth ranging from $2-50 million up to $1 billion. 

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