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

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.”

The research surveyed 30 Russian wealth holders, with individual private wealth ranging from USD 2-50 million to USD 1 billion. In total, the 30 Russian-national participants in this study represent over USD 2.5 billion of personal Russian wealth, and USD 6.5 billion of business turnover in 2014, reflecting a diverse range of industries.

“While Russian wealth holders are set to maintain business ownership despite the economic downturn, with some opting to move away from Russia in the long term, as a group, Russian wealth holders are becoming more conservative with their private wealth. It is paramount for financial service providers to secure the achievements of this entrepreneurial generation of Russian business leaders,” said Dominic Samuelson, Chief Executive Officer of Campden Wealth.

The Key Findings

• *Investments:* Russian wealth holders are adopting more conservative private wealth investment strategies. Since 2013, the proportion of ultra-high net worth individuals (UHNWI) pursuing preservation strategies with their wealth has quadrupled from five to 20%. Additionally, cash and real estate constitute 49% of Russian UHNWIs’ ideal portfolios. A recent fall in theroublehas improved the acquisition power of Russian UHNWIs, as their primary cash holdings were either in dollars or euros;

• *Banking relationships: *Approximately 79% of Russian UHNWIs are expected toutilisedomestic private banks for wealth management. Many participants in the research remarked on the underdeveloped state of private banking in Russia; in particular the quality of service and range of products offered fall short of international (European and American) standards;

• *Opportunities for growth:* Internal cash flow remains the primary means of funding growth; for Russian UHNWIs looking to expand, there is consensus that opportunities for mergers and acquisitions (M&A) abound, especially as economic recession sets in. Participants expect M&A intensity to increase within the year, anticipating ample opportunities for relatively cheap acquisitions. Seventy-three percent of participants have not accessed business or private credit in the last 12 months;

• *The business climate: *Outlook of current business conditions in Russia has worsened amongst participants in the last 12 months. Cash flow and market volatility are priorities, with participants who control larger fortunes expressing greater concern for political considerations.Political stability is perceived as one of the most beneficial conditions affecting Russia currently, with 40% of participants claiming the political stability in the region is good or excellent. Sanctions pose a new challenge, while corruption remains a divisive and persistent topic of concern;

• *Domicile: *Just over half of participants domesticated in Russia are likely to move abroad, but departure is not imminent; 46% are only likely to move after five years. For many Russian UHNWIs, a momentous disruptive or destabilising event would need to occur to even consider relocating abroad.

To find more on the best recommended ways to invest in Russia, please read our Opalesque 2014 Russia Roundtable here: Source

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