Goldman transferred privately held Russian assets to former employees

Goldman Sachs agreed a deal last year to transfer a portion of its privately held Russian investments to two of the bank’s former employees, part of the Wall Street firm’s efforts to wind down its operations in the country in the wake of Moscow’s war with Ukraine.

Goldman has transferred its ownership stakes in Russian recruitment firm HeadHunter and Cian, a property listing website, to Maxim Klimov and Anton Schreider, according to a person familiar with the matter.

Klimov and Schreider are Russian and were managing directors for Goldman in the country until they left the US bank in July last year. The exact terms of the transaction could not be learned but it was done at a discounted price, the person said.

The deal gives the partners stakes in companies that have remained profitable even as western sanctions against Russia over the war have sparked an exodus of foreign companies and battered markets.

The asset transfer was first reported by Russian news outlet RBC, which said it involved minority stakes.

Many western companies, including McDonald’s, McKinskey, the Big Four accountants and several white-shoe law firms, have divested their Russian assets through buyouts to local management.

The deals are often seen as preferable to selling on the external market, according to bankers, where sweeping western sanctions have proscribed potential buyers and some companies desperate to exit Russia have effectively handed assets away for next to nothing.

Some of the western companies exiting Russia have negotiated buyback clauses in the event the sanctions are lifted and they choose to return to the market, according to people familiar with the matter.

Cian had net income of Rbs2.25bn in the third quarter of 2022, the best financial results in the company’s history.

HeadHunter, which has about 28.5mn monthly visitors to its classifieds website, made Rbs1.4bn in net income in that same quarter, though the total was a 20 per cent decrease year on year.

Schreider did not immediately respond to a request for comment on LinkedIn. Klimov declined to comment. HeadHunter and Cian did not immediately respond to requests for comment.

The stakes in the companies were so-called on-balance sheet investments made with Goldman’s own capital, a remnant of the era when the bank would wager its own funds for investments, rather than through investment vehicles where Goldman manages outside funds.

Goldman Sachs in March announced plans to close down its businesses in Russia, where it has had a presence since 1998, following Moscow’s full-scale invasion of Ukraine. Wall Street regulatory experts have warned that winding down operations in a country can take up to a year to complete.

Efforts by western banks to exit the Russian market have been complicated by a decree signed by Russian President Vladimir Putin in October, which prohibits 45 foreign banks, including Goldman Sachs, from disposing of their Russian assets without his personal approval.

As of the end of the third quarter of last year, Goldman had cut its total credit exposure to $205mn from $650mn at the end of 2021.