Diverse Portfolio of Mikhail Prokhorov Assets
Overview of Mikhail Prokhorov
Mikhail Prokhorov, born on May 3, 1965, in Moscow, Russia, is a Russian oligarch, businessman, and politician. His financial success began after the collapse of the Soviet Union, where he acquired shares in formerly state-run corporations. Forbes estimated Mikhail Prokhorov assets at $10.9 billion as of 2014. Co-founding Interros Holding Company, he assumed the role of Chairman of the Board at Onexim Bank in 1993. Capitalizing on the Russian government’s need for immediate loans and the privatization of metal mining and shipping industries, Interros and Onexim Bank flourished.
Prokhorov’s influence spans diverse industries, including metals and mining, banking and finance, and sports. Notably, he was the previous owner of the Brooklyn Nets and the founder of the Moscow-based Onexim Group, specializing in banking, insurance, and real estate. Beyond business, Prokhorov ventured into politics, running for the Russian presidency in 2012 and affiliating with various parties like the Communist Party and the liberal Right Cause party.
An ardent sports enthusiast, Prokhorov engages in activities such as martial arts, skiing, and windsurfing. His lavish lifestyle includes a residence in Villefranche-Sur-Mer, France, ownership of the yacht Palladium, and a private jet. Reports in April 2022 suggest he acquired Israeli citizenship.
Metals and Mining Ventures
Mikhail Prokhorov is actively involved in the mining and metallurgy sectors, with notable interests in Polyus Gold, Intergeo, and a stake in Rusal.
His wealth-building journey took shape in nickel mining, where he acquired Russian state-owned metals assets at remarkably low prices following the Soviet Union’s collapse. In 2008, Prokhorov made a strategic move by selling his 25% plus two shares stake in Norilsk Nickel to United Company RUSAL, controlled by fellow billionaire Oleg Deripaska. This transaction resulted in the acquisition of approximately 14% of Rusal stock, along with a substantial cash amount of US$5 billion and additional payment obligations totaling US$2 billion.
Furthermore, Prokhorov served as the former chairman of Polyus Gold, a prominent player in Russia’s gold production industry. In 2007, he took a bold step by initiating a $17 billion fund dedicated to investing in mining projects, focusing on non-ferrous and precious metals extraction. This venture showcased his commitment to exploring opportunities in the dynamic mining landscape.
Banking and Finance Empire
Establishment of the Onexim Group and its role in Moscow’s financial landscape
In 1992, Mikhail Prokhorov established the Onexim Group, a Moscow-based company delving into banking, insurance, and real estate. The Onexim Group significantly shaped Moscow’s financial landscape, playing a key role in the privatization of Russian metal mining and shipping industries.
Prokhorov, serving as Chairman of the Board at Onexim Bank, seized opportunities arising from the Russian government’s urgent need for loans and the privatization of state-owned assets. This financial strategy, known as the loans-for-shares program, reached its zenith with Onexim Bank’s remarkable success in financing the privatization of Norilsk Nickel.
Prokhorov’s leadership as CEO of Norilsk Nickel from 2001 to 2007 was transformative, propelling the company to become the world’s largest producer of nickel and palladium.
Today, Onexim Group stands as one of Russia’s premier investment funds, boasting diverse interests across various sectors of the economy.
Overview of Prokhorov’s associations with prominent banks, including Renaissance Capital, Renaissance Credit, IFC Bank, and Soglassiye Insurance Company.
Mikhail Prokhorov has played a significant role in shaping Russia’s financial landscape through his affiliations with major banks and financial institutions. Let’s delve into his connections with these institutions:
Renaissance Capital and Renaissance Credit: Prokhorov holds stakes in both Renaissance Capital and Renaissance Credit. Renaissance Capital stands out as a leading investment bank operating in emerging and frontier markets, spanning Russia, Africa, and the CIS. On the other hand, Renaissance Credit focuses on consumer finance, serving clients in Russia and other CIS countries.
IFC Bank and Soglassiye Insurance Company: Prokhorov’s interests also extend to IFC Bank and Soglassiye Insurance Company. IFC Bank, a Russian commercial bank, offers a diverse range of services, including corporate and retail banking, investment banking, and asset management. Meanwhile, Soglassiye Insurance Company, based in Moscow, specializes in providing a variety of insurance products and services.
These affiliations underscore Prokhorov’s deep involvement in Russia’s banking, insurance, and financial sectors, solidifying his prominent position in the country’s business landscape.
Sports Ventures
Acquisition of the NBA team, Brooklyn Nets, and the Barclays Center.
In 2008, Mikhail Prokhorov acquired the NBA team, Brooklyn Nets, and the Barclays Center through his company, Onexim Sports and Entertainment Holding USA, Inc. His initial investment totaled $223 million in cash, with an additional $160 million in team debt and $60 million in basketball operations financing. In return, Prokhorov secured an 80% ownership stake in the team and 45% in the unbuilt arena. Furthermore, he invested $76 million in bonds to support the non-revenue-producing aspects of the arena.
Fast forward to 2018, Prokhorov decided to sell a 49% stake in the Nets to Joe Tsai for a substantial $1 billion. The following year, in 2019, he completed the full sale of the Nets and Barclays Center to Tsai for a staggering $2.35 billion – a record-breaking amount for a sports team acquisition. Prokhorov’s savvy business move in this sale is estimated to have yielded a remarkable profit of approximately $2 billion.
Overview of Prokhorov’s impact on the team and subsequent sale to Joe Tsai.
Mikhail Prokhorov’s impact on the Brooklyn Nets during his ownership can be summarized as follows:
Purchase and Relocation: In 2010, Prokhorov acquired the New Jersey Nets and moved them to Brooklyn, New York, in 2012.
Team Performance: Under Prokhorov’s ownership, the Nets faced challenges, finishing with a final record of 288-434.
Trades and Controversies: Prokhorov’s tenure as owner was marred by some of the NBA’s worst trades, leading to negative publicity.
Financial Investment: Prokhorov heavily invested in the team, with estimates suggesting annual losses of approximately $100 million during his ownership.
Ownership Transition: In 2018, Prokhorov sold a 49% stake in the Nets to Joe Tsai for $1 billion. The following year, he concluded his ownership by selling the full stake in the Nets and Barclays Center to Tsai for $2.35 billion, marking one of the highest prices ever paid for a sports team. This transaction marked the conclusion of Prokhorov’s involvement with the Brooklyn Nets.
Residences and Extravagances
Mikhail Prokhorov’s penchant for opulence is vividly displayed through his choice of residences and extravagant holdings. Among his notable properties are:
- Villa Leopolda in Villefranche-Sur-Mer, France: In 2008, Prokhorov secured Villa Leopolda with a staggering $75 million deposit. This luxurious estate, originally constructed in 1902 for Belgian King Leopold II, boasts a rich history, having been owned by notable figures, including the late banking magnate Edmond Safra. The property features 19 deluxe bedrooms, 14 bathrooms, and is adorned with antique furniture.
- New Jersey Nets and Barclays Center: Prokhorov made a significant impact in 2012 by acquiring the New Jersey Nets and relocating them to Brooklyn, New York. His substantial investments were not confined to the team alone but extended to the development of the Barclays Center—a cutting-edge arena in the heart of Brooklyn, New York.
- Loss of $54 Million Deposit on a Luxury Villa: In a turn of events in 2020, Prokhorov faced a setback when he forfeited a $54 million deposit on a lavish villa, a consequence of the economic recession. This exclusive residence, situated in southern France, had previously held the title of the world’s most expensive home.
These opulent residences and extravagant properties not only underscore Mikhail Prokhorov’s affinity for luxury but also exemplify his readiness to invest in the most lavish of properties.
Yachting in Style: The Palladium
Mikhail Prokhorov, the owner of the opulent yacht Palladium, commissioned its construction from Blohm and Voss in 2010. Stretching 95 meters (312 feet), the yacht boasts 24 guest cabins and accommodates up to 33 crew members. The meticulously crafted interior and exterior reflect the design expertise of Michael Leach Design.
Valued at an estimated $200 million, the Palladium stands as a symbol of luxury on the seas. Notably, Prokhorov was frequently spotted enjoying lively gatherings aboard the yacht in the Mediterranean.
In 2021, a noteworthy development unfolded as Prokhorov decided to part ways with the Palladium. The buyer, none other than American billionaire Dennis Washington, led to a change in the yacht’s identity as it was renamed AV. This transaction marked a significant chapter in the yacht’s history, transitioning from one billionaire’s ownership to another.
The Airbus A319
Mikhail Prokhorov possesses a private jet, an Airbus A319, identified by the registration M-RBUS. Manufactured in 2009, this aircraft boasts a capacity for up to 30 passengers. It serves as a conspicuous emblem of Prokhorov’s substantial wealth and lavish living, aligning seamlessly with his opulent collection, including the Palladium yacht and diverse properties. The approximate value of an Airbus A319 stands at $70 million, underscoring the sheer opulence characterizing Prokhorov’s aviation portfolio.
