Ben Aris in Moscow -

This was the second time that Renaissance Capital nearly went bust. Set up in 1995 by Moscow legend Boris Jordan as part of the Renaissance Group, the investment bank only just made it through the 1998 crisis.

Jordan sold out to his partner and co-founder Stephen Jennings, who stitched together a rescue and hung on long enough to be lifted back into the game by the boom that started in 1999.

This time round, Renaissance, or Rencap as it's known in the market, came even closer to going belly up when financial markets around the world went into freefall in the second week of September. Rumour has it that the bank had to come up with $400m at short notice and didn't have it. Whatever the truth, a deal was quickly cut with oligarch and Russia's richest man Mikhail Prokhorov, who bought a 49% stake in the bank.

The deal got a lot of play in the press, but this was actually the second time that Rencap has teamed up with Prokhorov; the bank formally merged with his MFK (International Financial Company) bank shortly before the 1998 crisis and even managed to put out a few weeks of co-branded research before the financial system went into meltdown. The two sides quickly de-merged and the deal has disappeared into the fog that surrounds much of what happened in Russia during the 1990s.

In many ways this crisis is playing out in a very similar fashion to the last one. Like 10 years ago, the deep fall is being followed by a strong bounce. Almost exactly a year after the panic selling started, Jennings announced in a round robin to the surviving Rencap staffers that "the crisis is over" and the bank is back in aggressive growth mode.

The man tasked with leading the bank out of the crisis is Ruben Aganbegyan who took over as president of Rencap earlier this year. With the bank almost from the start, Aganbegyan is in deep with the Russian elite - both commercial and political - and was thrown in at the deep end. "In the first three months of this year we were cost cutting, but by the second quarter we'd finished the process," says Aganbegyan. "And cost means people."

The collapse hurt everyone, but Rencap seemed to smart more than most. As many as 300 staff were cut in a week in the midst of the bloodbath in March and the overall staffing level was slashed from about 1,350 to 650. As the summer approached, management waited to see if the world was about to fall into the abyss or would merely remain teetering on the edge. "By the middle of the year, we saw that things were picking up and put everyone on vice president and below back on their old salaries. By September [this year], we were in post-crisis mode. It was partly a psychological view, but we believed that we were coming out of the crisis and so it was time to go on the offensive again. Better to attack than defend if you want to get the clients and the work. We hired 50 more people in September alone and we are looking at growth again as international sales are very high; things turn around quickly."

Russia's other leading investment banks like VTB Capital and Troika Dialog apparently dodged the bullet and remained more or less fully staffed throughout the last year. But Aganbegyan says the difference is one of tactics. While the other two big investment banks were more concerned with their image, and so bled cash rather than sack staff, Rencap decided it was more important to cut costs and damn the publicity.

The jury is still out on which approach was best, but Rencap is now lean and hungry. It has come out of the gate fast and while the other banks are still worrying about costs, Rencap is worried about business, which is where it wants to be, says Aganbegyan.

Post-crisis world

Russia seems to be bouncing back very strongly, at least as far as the investment banking business is concerned. While the economy is still sick, the crisis has created an enormous amount of work for the bank. Nearly everyone has been forced to restructure their debt. Mergers and acquisitions are now starting in earnest as those with cash start picking up bargains. Equities have soared, up over 120% since the start of the year. And the local bond market is on fire as the only liquid source of capital for Russian companies. Notably, two of Rencap's most recent hires were a new head of equity sales and a new head of treasury. "The bond market was the first to recover and we have brought in deals as companies are actively placing bonds. People can borrow on the fixed-income market if they are top tier," says Aganbegyan.

Still, the bank's ambitions have been knocked back. In the summer of 2008, Rencap launched an ambitious marketing campaign with adverts on things like CNN, positioning itself as, "your partner in emerging markets." Then, says Aganbegyan, the goal was to reach a capitalisation of $1bn; in 2009, the goal was to get to half a billion. "Business is still picking up, but the revenue is yet to come back," says Ruben.

What comes next is anyone's guess. However, there is the tantalising prospect that this crisis will fundamentally change the nature of the game, erasing the difference between "emerging" and "industrialised" markets. As we emerge blinking into the light of the post-crisis world, the developed markets are saddled with huge debts and burgeoning deficits, whereas countries like Russia have little debt and massive reserves of cash. Even if Moscow isn't going to replace New York and London as an investment hub, Rencap's universe is clearly going to be one of the few regions to be able to put in strong growth for several years to come. "We are building in a multidimensional world and we have targeted three priorities. The first is geography: we operate in one broad time zone of Russia downwards, through the Middle East and into Africa. The second is products: we offer the complete range of investment bank and capital market products. The last is industry specific: catering to the needs of things like mining, oil and gas and possibly agriculture where we go in as number one on things like equity, investment banking services and research," says Aganbegyan.

But despite the potential, Aganbegyan has kept his feet on the ground and is clearly keenly aware that getting from here to there is not going to be easy. "Russia has a lot of big changes to make on the agenda and the question is if the politicians do everything that is needed. If they do, then Russia has a huge future," says Aganbegyan. "Where they always fall down is on the implementation, but nevertheless even if Russia doesn't come as far as intended, the results until now have always been ok."