Chelsea's Roman Abramovich among Russians hit by UK sanctions

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Britain said on Thursday it had imposed asset freezes on seven Russian businessmen, including Chelsea FC owner Roman Abramovich.

Igor Sechin, Oleg Deripaska and Dmitri Lebedev have also been added to the country's sanctions list.

There can be no safe havens for those who have supported Vladimir Putin’s "vicious assault on Ukraine", British Prime Minister Boris Johnson said.

Mr Abramovich is the billionaire owner of Chelsea football club, Mr Deripaska has stakes in En+ Group, Mr Sechin is the chief executive of Rosneft and Mr Lebedev is chairman of the board of directors of Bank Rossiya.

Abramovich London

A Kensington Palace Gardens house with 15 bedrooms is valued at more than £150 million.

A three-storey penthouse at Chelsea Waterfront bought for £22 million.

Steel company Evraz drops more than 10 per cent in trading after UK officials said it was potentially supplying the Russian military.

Sale of Chelsea Football Club is now impossible.

The UK government said it would enable Chelsea to continue playing matches and engage in other footballing activities after the move to freeze assets.

"The licence will be kept under constant review and we will work closely with the football authorities," the government said.

Described as a pro-Kremlin oligarch, Mr Abramovich was hit with an asset freeze and a travel ban in an updated sanctions list published on Thursday after ministers came under sustained pressure to target him.

The government document says he has had a "close relationship for decades" with the Russian president.

"This association has included obtaining a financial benefit or other material benefit from Putin and the government of Russia," it says.

The sale of Chelsea Football Club has been put on hold after sanctions were placed on owner Roman Abramovich. Reuters.

Culture Secretary Nadine Dorries said Mr Putin’s attacks on Ukraine involved “new levels of evil by the hour” and the government had announced further sanctions “against individuals linked to the Russian government”.

“This list includes Roman Abramovich, the owner of Chelsea Football Club,” she said.

She acknowledged that this would have an effect on the premiership side but that a special licence would enable it to continue operating.

Mr Abramovich has owned Chelsea since 2003 and has always staunchly denied any current political links to Russia’s ruling elite.

The 55-year-old put Chelsea up for sale on March 2 in the wake of Russia’s continued invasion of Ukraine. However, the move to freeze Mr Abramovich's assets means the sale is now on hold, leaving the club in financial limbo.

British billionaire Nick Candy had been the latest high-profile business magnate to throw their hat into the ring for Chelsea’s sale, amid a host of suitors for the Champions League holders.

Swiss tycoon Hansjorg Wyss and American investor Todd Boehly were also in the running, with more than 10 credible parties understood to have been compiling bids.

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”