From Russian oil to rock’n’roll: the rise of Len Blavatnik

Striding the halls of an English stately home, dressed in full costume as Victorian prime minister Benjamin Disraeli, Len Blavatnik was celebrating his 60th birthday. Grammy-winner Bruno Mars sang. Guests — some in frock coats, others dressed as Leo Tolstoy, Rasputin or Chinese emissaries — mixed with rock stars, celebrities and business tycoons. 

Themed as an imaginary conference chaired by Disraeli, the June 2017 party was emblematic of Blavatnik’s extraordinary rise from his birth in Soviet Ukraine to one of the UK’s richest people.

Clues to his success lay in the guest list that evening. Pillars of the British establishment rubbed shoulders with Russian oligarchs. American entertainment executives mingled with former Kremlin apparatchiks as film stars sipped champagne.

Straddling these worlds was Blavatnik, an entrepreneur who reaped phenomenal riches from the chaotic world of 1990s Russian cowboy capitalism, and who cashed in that wealth in favour of western investments and a place in British and American high society. 

Over two decades, he extracted more than $14bn from Russia’s natural resources industry, the biggest financial gain of any individual foreign investor in the country and the bedrock of his approximate $25bn net wealth today, as estimated by Bloomberg. 

“He made his money [in Russia], almost all his money here, and then just made investments outside,” says Viktor Vekselberg, Blavatnik’s college friend, with whom he partnered to own major stakes in Russia’s biggest aluminium company and its third-largest oil producer. “I don’t see that he made a lot of money outside Russia, sorry. All his main money, he made here in Russia, with me.” 

Less than a year after the party, Vekselberg and the aluminium oligarch Oleg Deripaska — two men with whom Blavatnik had made billions of dollars — would be sanctioned by the US, excluded from the western financial system and made international pariahs. In stark contrast, Blavatnik was named Sir Leonard in the days after the party, knighted by the Queen for his philanthropic work just seven years after obtaining British citizenship. 

How did Blavatnik convert his Russian-made billions into a seat at the top table of the British establishment while avoiding the fate of many contemporaries? The answer lies partly in assiduous reputation management. Few in the west, outside elite business circles, know of the Siberian aluminium deals or courtroom battles for control of oil assets that built his first fortune. And that is how he likes it. 

Blavatnik’s exceptionally large gifts to respected western institutions, from Tate to Harvard, have earned him admiration as one of the world’s most generous philanthropists. At the same time he has maintained an obsessional level of privacy around his personal life, avoiding the pitfalls of oligarchs such as Roman Abramovich or Deripaska.

Perhaps most importantly, unlike his peers who made similar fortunes from the former USSR’s vast natural resources, Blavatnik steered clear of the Kremlin, leaving it to his partners to handle the political ties required of big Russian businesses. He thus avoided a Faustian pact that offered budding oligarchs asset protection in exchange for loyalty: it was to become a critical distinction, given today’s western backlash against President Vladimir Putin and his court.

Blavatnik’s pivot to western investments and high-profile philanthropy was exquisitely timed. In 2013, a year before Russia annexed Crimea and Moscow’s international reputation began to plummet, he almost wholly cashed out of Russia and refocused on an international conglomerate that spans chemicals giant LyondellBasell, Hollywood movies, luxury hotels such as the Grand-Hôtel du Cap-Ferrat, and Warner Music Group.

“He saw his business in Russia as working in an emerging market,” says Mark Garber, a close friend. “Like an American businessman who invests in Africa, for example, but does not dive in completely. He was very smart to take all his money out, invest it, and keep it safely hidden away.”

Many Russian-made billionaires have sought to build a profile in the west, only to be caught out as the geopolitical faultlines between Russia and the US have widened in recent years. Those who attempted to maintain their influence in Moscow while building new lives in Europe or the US have found themselves shunned by both. 

To the tycoons with whom he used to associate, Blavatnik’s position is a source of jealousy and perplexity. “It’s crazy how he has managed it, nobody understands how and everyone wants to,” says one Russian-born billionaire with a home in London. 

Of the dozens of Blavatnik’s business partners, friends, employees and former associates that the FT spoke to for this article, almost all point to his skill at exploiting his Soviet roots while always positioning himself as an outsider in Russia and a local in the west. 

Blavatnik declined a request for an interview with the FT for this article. His head of press relations asks reporters to confirm that Blavatnik will not be referred to as an oligarch in any article before agreeing to arrange potential interviews. Those who do use that word are left to face complaints from his lawyers, who also protest when the fact of his Ukrainian birth is publicised without clarity about his US and UK citizenships.

Lincoln Benet, chief executive of Access, the holding company that Blavatnik created in 1986, tells the FT that his boss should be written about with “a combination of generosity and admiration . . . How many people do you know who can be engaged [sic] with Ed Sheeran, as well as, you know, being at the Harvard Medical School, or with [former BP chief] John Browne?”

It is a remarkable position to be in. It is also a case study in the emollient power of billionaire philanthropy, during a period when western politicians of all stripes went out of their way to welcome the global super-rich.

Leonid Valentinovich Blavatnik was born in 1957 in Odessa, the Black Sea port in today’s Ukraine. His parents moved to Yaroslavl, a Russian city north of Moscow, when Blavatnik was a child. He and Vekselberg, another Ukrainian Jew, became close friends at one of the only high-ranking colleges in Moscow to accept Jewish people, who were then subject to widespread discrimination in the country.

At the age of 21, Blavatnik moved to South Brooklyn, New York. Over the next decade, he flourished in his new home: earning a masters in computer science at Columbia and an MBA at Harvard Business School, falling in love with and marrying Emily Appelson, an American media executive he met at a house party. Leonid became Leonard and gained US citizenship in 1984. He created Access as an investment vehicle. By the end of the 1980s, he had made his first million dollars.

That CV would later be critical to his success in Russia. There, almost all the would-be oligarchs were teaching themselves capitalism as they went along, and here was a Russian-speaking millionaire with an American passport. “Len was very much a man of the world, even back then,” says one longstanding business partner. “He had been educated in the US, he understood money and international finance as if it were second nature. He had been trained. In the strange inequality of the Soviet Union, that made him different.”

It was his old friend Vekselberg, after a chance meeting in the late 1980s at a US petrochemicals exhibition, who convinced him that vast riches were lying in wait in the former USSR. 

“I was very sceptical. I’d been living in America for a long time and had a company,” Blavatnik told a 2015 gala in Moscow celebrating 25 years since the founding of their partnership, according to a video of his speech seen by the FT. “But Viktor’s amazing powers of persuasion prevailed.”

Soon the two men were huddled around a small table in Vekselberg’s cramped Moscow apartment, where he lived with his wife, daughter and in-laws. (“Those 23 square metres were a key part of why I wanted to go into private business,” Vekselberg told the gala.) They set up a company: Renova, a nod to the perestroika — renovation — initiative that allowed for private business in the Soviet Union. 

“Those who remember know how business was being done at that time: morning, afternoon and evening meetings began with a shot of vodka,” Blavatnik told the audience, describing how they would drive around in a beaten-up Soviet Volga with a large briefcase stuffed with papers and a BB gun. 

The market the young friends were trying to break into in the early 1990s was not for the timid. Encouraged by western advisers, then-president Boris Yeltsin was selling off scores of state-owned mines, refineries and factories in often dubiously administered tenders. 

Blavatnik had both the international cachet to attract foreign backers and the local smarts required to succeed. “He understands Russian rules very well, and used these rules as much as any other. You have to be friendly with the authorities, and if you can take something, you take,” says a local businessman who was operating at the same time.

With Vekselberg handling much of the local work and Blavatnik running international sales from New York, their initial moves were in Russia’s aluminium business. The pair began accumulating shares in smelters during a period when violence, extortion and organised crime were real threats. The era was later dubbed the “aluminium wars”. But there was more money to be made in oil. 

In 1997, Blavatnik and Vekselberg teamed up with another Ukrainian-born businessman, Mikhail Fridman, co-founder of one of Russia’s most important and influential conglomerates, Alfa Group, who would himself go on to amass a multibillion-dollar fortune. 

The trio launched AAR (Alfa, Access, Renova) and bought 40 per cent of a struggling oil producer called TNK for $800m. The tender was run by Alfred Kokh, a government official and friend of Blavatnik’s (Kokh later joined the board of TNK). Working with Fridman’s Alfa Group took Blavatnik and Vekselberg, relative newcomers among the emerging tycoons, to another level. “Maybe [Vekselberg] knew some governors where the factories were, but nothing on the level of [the major oligarchs],” Kokh tells the FT.

Alfa owned one of Russia’s largest banks and had helped bankroll Yeltsin’s re-election campaign. Fridman’s partner was former privatisation adviser Pyotr Aven, who handled the group’s government relations. With Alfa as a partner, Blavatnik gained the political clout he had previously lacked — and was averse to building himself. AAR soon won full control of TNK and began looking to expand aggressively, by acquiring assets from competitors. 

One such rival was Sidanco, part-owned by British oil major BP. Through controversial bankruptcy proceedings, it was systematically broken up against its owners’ will and its best assets sold off, mainly to TNK, for prices below the value of their reserves. 

A 1999 lawsuit brought in New York accused Blavatnik, Access and its partners of having “stolen” assets from Sidanco. Blavatnik’s side sought to have the lawsuit dismissed. It was later dropped after the companies merged. 

The legal blowback to this audacious empire-building unnerved Blavatnik, according to a number of those who worked with him at the time. While Fridman and Vekselberg became well known in the rough and tumble of Russia’s early capitalism, Blavatnik sought a lower profile — a shrewd approach that would later smooth his path in the west. 

“He never really tried to have any deep ties to the Kremlin as far as I could tell,” Kokh says. “He didn’t do any government relations or management. That was all his partners. He never got into it himself.” 

Blavatnik’s role lay elsewhere as the bridge to BP, which was still seething after losing more than $200m through Sidanco’s dismemberment. When Browne, BP’s chief executive, refused to speak with Fridman for an entire year, Blavatnik conducted back-channel talks with Rodney Chase, Browne’s deputy. 

“I worked here [in Russia], he was outside,” Vekselberg tells the FT. “He was a partner with whom I could discuss and reach the right decision. If I had been alone, for sure I would have made mistakes. He is a more balanced person, he protected me from sharp statements. [He would say] ‘Wait, don’t do this.’ I am ready to fight more — he is a more peaceful person, a communicator.”

The outreach worked. In 2003, four years after BP had sued TNK and its owners for taking away its best Russian asset, the British company spent $8bn to form TNK-BP in Russia’s biggest foreign investment deal, giving Blavatnik, Vekselberg and Fridman billions of dollars, and the cachet of blue-chip western partners. 

“I knew that putting more money into a country where we had already had our fingers burnt was high risk,” Browne wrote in his memoir Beyond Business (2010). “[But] to me it was essential to be there.”

While his partners embraced their new prominence as Russian billionaires, Blavatnik moved in another direction. A year after the TNK-BP agreement, signed during Putin’s state visit to the UK, Blavatnik spent some of his estimated $2bn proceeds on a £41m, 10-bedroom mansion in Kensington Palace Gardens, bookended by the Russian and Israeli embassies. 

The move propelled him into London’s elite. In contrast, and in a sign of their diverging priorities, Vekselberg splashed $100m on a collection of nine Fabergé imperial Easter eggs, saying he wanted to “give back to my country some of its most revered treasures”.

While Vekselberg oversaw the aluminium and oil assets in Russia, Blavatnik focused on putting down roots in London. He befriended Browne, a prominent member of the British establishment, who began introducing him in the social circles that would later toast his 60th birthday. He became close to Lord George Weidenfeld, the late publishing magnate, who encouraged him to make donations to academic institutions, and he hired Sir Michael Pakenham, a distinguished former British diplomat, as an adviser. All three helped acquaint him with high society. 

Blavatnik also diversified his business away from Russia. In 2004, he bought a stake in Warner Music, and a year later paid $5.7bn for Basell Polyolefins, a big petrochemicals producer. Those who worked, invested or socialised with Blavatnik in the US or the UK during this period say he very rarely spoke of his Russian assets. 

“I knew next to nothing — maybe not even next to — about what he was doing in Russia,” says Edgar Bronfman Jr, the US businessman who later sold him the rest of Warner Music.

By then, Access was in effect two companies, one overseeing Blavatnik’s highly profitable but low-maintenance Russian fortune, another for his chemicals and entertainment businesses. “He always told me that his claim to fame was he made most of his money while being a minority partner,” says Alexander Akopov, Blavatnik’s longtime partner in the Russian media industry. “Which means that he is always a guy who can find the right people who are doing the right things and become part of it at a good moment.”

In 2008, long-simmering tensions between TNK and BP exploded into public view, when Russian armed police raided the company’s Moscow office. Months later, Bob Dudley, the joint venture’s BP-appointed chief executive, fled Russia claiming sustained harassment. BP claimed its Russian partners were attempting to take control of the entire company. 

While the tycoons have always denied involvement in what a leaked US diplomatic cable described as a concerted campaign to “get rid of the western managers”, Dudley was eventually replaced as head by Fridman.

The tussle was a headache for Blavatnik, who, unlike his partners, had a profile in London and New York to worry about. But he was rewarded for sticking with TNK-BP in 2013 when AAR sold its stake to Russian oil company Rosneft for $28bn. Blavatnik promptly invested his $7bn windfall in the west. “It was probably the most successful repatriation of assets from Russia in history,” says one Soviet-born oligarch operating at the same time.

Blavatnik succeeded in Russia while staying out of the spotlight. His activities in the west have been more conspicuous. His purchase of Warner Music for $3.3bn in 2011 was the first step in what he said was a mission to build a global media empire. “After he got into the music business . . . he told me, ‘There won’t be any money, but it’ll be fun,’” says Garber. “Now, much later, he says, ‘There’s money, but it’s no fun.’”

Blavatnik’s friends say he is drawn to entertainment by a flair for the theatrical. “He loves performing a role . . . it allows him to relax, de-stress,” says Vekselberg. He had a cameo as the Swedish ambassador in a Russian mini-series about Ivan the Terrible’s grandmother. At a 1930s-themed US embassy party in Moscow in 2010, he appeared in a Soviet general’s tunic, even though none of the other guests was in costume. 

Blavatnik with Ed Sheeran at a party following the Brit Awards in 2015

With Rita Ora at a pre-Grammy party in Los Angeles this year

With Chris Martin of Coldplay at a Grammy celebration in LA in 2014

“The entertainment business has given Len three things: it has been [a] tremendous investment, it has given him a lot of pleasure, and it has increased his visibility,” says Bronfman. “Having said that, visibility is a double-edged sword . . . With [his money] comes a lot of scrutiny, which I am not sure is entirely welcome.”

Like many billionaire philanthropists, Blavatnik has channelled this scrutiny in specific ways. While he is intensely private about his business interests in Russia and rarely gives interviews, he has ensured his name is prominent in various cultural institutions across the world. Encouraged by Weidenfeld and masterminded by Browne, Blavatnik donated £75m to Oxford university in 2010 to set up the Blavatnik School of Government. 

A donation of more than £50m — an amount “almost unprecedented in Tate’s history”, according to its then director — helped finance Tate Modern’s Blavatnik Building. That gift was also brokered by Browne, then chair of the museum’s trustees (the position is now held by the FT’s editor Lionel Barber). The new entrance to the Victoria and Albert Museum is named the Blavatnik Hall. A $200m donation to Harvard Medical School last year set up the Blavatnik Institute. 

“He clearly wants to make sure that there is a legacy of philanthropy that he can leave, as well as a legacy of business,” says Nitin Nohria, dean of Harvard Business School, Blavatnik’s alma mater and another recipient of his donations. “He wants to do things that will have enduring impact.”

“He’s like [oil barons] Armand Hammer, [Calouste] Gulbenkian: an old-school international businessman,” says Kokh. “Everyone has their own agenda. Blavatnik likes having his name on buildings. So what?”

Yet Blavatnik’s donations have met some resistance in the west. The 2010 donation to Oxford sparked a backlash from academics and activists who said the university was “selling its reputation and prestige to Putin’s associates” and should reject the money due to Blavatnik’s involvement with the TNK-BP dispute. 

Pressure increased after suspicions arose in the US that Russia helped Donald Trump win the 2016 presidential election. In 2017, a professor at Blavatnik’s Oxford school resigned after it emerged that Blavatnik’s company had donated $1m to Trump’s inauguration committee. 

Last December, Charles Davidson, director of an anti-kleptocracy programme at the Hudson Institute, a Washington think-tank, quit after Blavatnik bought a $50,000 table at its annual gala. Davidson cited “the influence of Putin’s oligarchs on America’s political system and society [and] the importation of corrupt Russian business practices and values”. Hudson returned the donation. 

In a statement, Blavatnik’s spokesman alleged that Davidson’s departure was “already planned and overdue” and that Davidson wanted to “have it appear that he was resigning as a matter of principle rather than for cause”. (The think-tank and Davidson declined to comment.) 

In Russia, Blavatnik’s charitable giving sets him apart from other billionaires known for splurging on football clubs and yachts. “At least university campuses get built,” says Alexei Navalny, an opposition leader and fierce critic of Putin’s oligarchic entourage. “As far as Russia and I are concerned, he’s not a political oligarch. He isn’t buying newspapers here, he isn’t intimidating journalists, he basically isn’t involved with Putin at all.”

Blavatnik’s status in the west has clearly been protected by the concerted effort he made to distance himself from Russian politics and, in particular, from Putin. Blavatnik’s representatives say he has not met the Russian president since 2000. Kremlin officials tell the FT that he was never a regular visitor. Friends say Vekselberg often represented their shared interests.

Blavatnik has been less guarded when it comes to US politics. While he has donated to both Democrats and Republicans over the past decade, in the lead-up to the 2016 election he and his companies donated more than $6m to Republican campaigns. As well as the donation to Trump’s inauguration committee, Vekselberg told the FT he sat on a table paid for by Blavatnik at the inauguration party. (Blavatnik’s spokesman denied this and said in a statement that Blavatnik “did not meet or speak with Viktor Vekselberg” at the inauguration.) 

In April 2018, the US sanctioned Vekselberg — plus Deripaska and five other Russian oligarchs and their companies — for “malign activities” in support of Putin’s regime. Along with having to give up control of his companies to keep them operating, Vekselberg is banned from doing business with any US citizens, including Blavatnik. “Of course, last year it was sensitive for all of us,” Vekselberg tells the FT. “Legally, [Blavatnik and I] cannot communicate. From time to time, he gets a licence [from the US Treasury], we can talk.”

When asked if he could imagine doing business with his former partner again, Vekselberg pauses. “This is not an easy time, emotionally. It is not easy. Practically, it will be difficult [to work with him again]. You should understand our relationship. Len is my friend. He is very active in Russia, but very rarely asks me to help him in Russia, because he has his own connections. I am active in the US, but rarely ask him for help there. This is our relationship.”

There is no mention of Russian business activities in Blavatnik’s biography on Access’s website, nor trace of its remaining Russian industrial asset: its stake in Sual Partners, the vehicle still jointly controlled by him and Vekselberg. Sual owns a 26.5 per cent stake in the aluminium giant Rusal, where Blavatnik was a board member from 2007 to 2016. 

Rusal was taken off the sanctions list in January this year after Deripaska reached an agreement with Washington to give up control of the company. Days later, Democratic lawmakers accused Treasury secretary Steven Mnuchin of cutting Rusal a favourable deal and alleged he had a conflict of interest after Access bought a stake in a film company linked to Mnuchin in 2017.

Both Access and Mnuchin deny that Blavatnik’s company acquired any shares from Mnuchin. In a statement, Blavatnik’s spokesman said: “Neither Mr Blavatnik nor any Access-related individual or representative has ever engaged in any lobbying activities with regard to Rusal.”

The decision to lift sanctions on Rusal nevertheless boosted Blavatnik’s wealth: the shares Access holds in Sual give it an indirect stake in Rusal of less than 10 per cent in the $5.5bn company.

It has been almost three decades since Blavatnik and Vekselberg sat on a New York rooftop and discussed the riches on offer in Russia. Today, thanks in part to the money they made together, Blavatnik owns property worth more than $250m in Manhattan, while Vekselberg is banned from visiting.

“Len and Viktor chose different paths. There is a fight between Russia and the west. It is not a very smart fight. But Viktor chose the wrong side. And Blavatnik chose the right side, the stronger side,” says the Soviet-born oligarch who made his fortune at the same time. “[Len] became Lord of the Dance . . . a Sir, a noble person. Viktor is the world’s enemy.”

Just as there will likely never again be such a remarkable shift of wealth from public to private hands as he and his peers enjoyed after the collapse of the Soviet Union, there will also likely never be another Blavatnik. The gates through which his fortune passed from east to west have slammed shut. His rise took place during a period of late-20th and early-21st century capitalism when money flowed with extraordinary freedom across borders and oceans, and when the western establishment eagerly welcomed the owners of that money.

“I would like to congratulate Viktor, and also thank him for persuading me to start a joint business many years ago,” Blavatnik said at the 2015 gala in Moscow. “Thanks again, that you persuaded me on that roof.” 

Henry Foy is the FT’s Moscow bureau chief. Max Seddon is an FT Moscow correspondent

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