Profile: The Ukrainian-born “Kremlin consigliere” with Putin’s ear

Profile: The Ukrainian-born “Kremlin consigliere” with Putin’s ear
Kirill Dmitriev, the head of Russia's $10bn sovereign wealth fund RDIF, is now a sanctions target. /
By Jason Corcoran in Dublin March 2, 2022

Kirill Dmitriev, the lynchpin of the Kremlin’s sovereign vehicle and a close adviser to President Vladimir Putin, has criss-crossed the world promoting multi-billion co-investments in Russia with global financier titans but his modest origins began in Kyiv.

Such has been Dmitriev’s heady rise into Putin’s inner circle that the Russian magazine Sobesednik in 2020 suggested political insiders were seriously calling him “a possible successor to Putin.”  His repute may rise further now Dmitriev himself and the Russian Direct Investment Fund (RDIF) have both been sanctioned over Russia's invasion of his birthplace. 

His wife Natalia Popova also moves in gilded circles as a deputy to Putin’s younger daughter Katerina Tikhonva, who runs Innopraktika Foundation, an artificial intelligence institute based at Moscow State University. 

The Dmitrievs previously enjoyed several luxurious holidays with Tikhonova and her former billionaire husband Kirill Shamalov, until the latter’s divorce in 2018. Tikhonova was also sighted with Dmitriev and his wife in 2015 in Davos, the economic forum for global elites, according to the Bell investigative journalism website.

In fact, it is said that Dmitriev’s career only really took off after his met his future wife, an attractive blonde from Dedovsk near Moscow. Her father Valery Popov worked in one of the radio engineering research institutes in Moscow that develops complexes for the protection of ballistic objects and other secret equipment.

The geeky and cerebral Dmitriev, 46, is an unlikely confidante for Putin. Unlike his macho and sporty boss, he is socially awkward but his connections in Wall Street have helped raise the profile of the RDIF and attract funds from a spectrum of global nations, including Saudi Arabia, China and Kuwait to France and Italy.

Before the coronavirus (COVID-19) pandemic, only those who were seriously interested in the economy knew about Dmitriev and his finance prowess. But Dmitriev became the hero of state-controlled news after Putin assigned the RDIF with the task of fighting coronavirus domestically and spearheading the promotion and sales of Russian-made vaccines overseas.

Under Dmitriev, the RDIF has supported the development of SputnikV, the COVID-19 vaccine developed by the Gamaleya Centre, and is investing in the mass production of the vaccine via its portfolio companies.

The pandemic has been good for Dmitriev and strengthened his position in the Kremlin and internationally, as he become of one of Russia’s main newsmakers, announcing huge sales orders of the vaccines to countries around the globe.

Such is Dmitriev’s influence these days that one influential Moscow-based economist dubbed him: “the Kremlin consigliere.”

Dmitriev has also got the ear of Putin in other matters and was reported to have been a main negotiator between Saudi Arabia and Russia in the recent oil war.

By January 2017, Dmitriev was so trusted by Putin that he took up a role to be Russia’s confidential conduit to Donald Trump presidential transition team. Dmitriev met with Erik Prince, the founder of the private military company Blackwater, in the Seychelles. The meeting was convened by the UAE and Prince was understood by the other participants to represent the Donald Trump presidential transition team and Dmitriev was understood to represent the Russian government.

In November 2017, Prince admitted at a congressional hearing that he had met Dmitriev in the Seychelles but said the meeting was random and lasted “no more than a pint of beer.”

However, Special Counsel Mueller produced another witness, Lebanese-born American businessman George Nader, who was involved in the meeting itself and in organising it. Nader said on record that the meeting was set up in advance and its purpose was to establish a back channel between the Trump team and Moscow.

Dmitriev has declined on record to discuss the meeting with Prince and its purpose. It was also disclosed in the US press that Dmitriev regularly meets with Jared Kushner, the son-in-law and adviser to former US President Donald Trump.

Dmitriev’s main legacy is undoubtedly the RDIF, which was first set up in 2011. It has been a catalyst for direct investment in the Russian economy at a time when foreign public and private equity investors had deserted the market.

The fund and its foreign partners has implemented more than 90 projects, totalling more than RUB2.1 trillion and covering 95% of the regions in Russia. RDIF portfolio companies employ more than 800,000 people and generate revenues which equate to more than 6% of Russia’s GDP. The fund has established joint strategic partnerships with leading international co-investors from more than 18 countries and total more than $40bn.

Dmitriev has been rewarded for his unstinting service in building the fund’s stature and for doing questionable deals for oligarchs and associates of Putin's. In April 2020, he was bestowed by Putin with the prized Order of Honour for “his valuable contribution to international investment projects and the socio-economic development of Russia.”

The Dmitrievs have also benefitted financially for their allegiance to Russia and for Kirill’s slavish work promoting the RDIF and Russia’s vaccines.

Dmitriev and his wife are reported by Sobsednik to be the owners of two neighbouring apartments in a mansion located on Malaya Bronnaya, one of the most desirable residential areas in central Moscow. It is said the couple also own a vast apartment on the Ozerkovskaya embankment in the city and a cottage in the elite Benelux village stretching to 550 square metres with 20 acres (8.1 hectares) of land.

Sobsednik estimates the total value of the pair’s personal real estate portfolio at about RUB1bn. His stipend for running the RDIF is not too shabby either.

Although the state fund keeps the salaries of managerial personnel a secret, Sobesednik found out the size of the state manager's income. According to their data, Dmitriev trousers about RUB120mn a year plus bonuses.

And these are not his only sources of income: in total, he receives about RUB50mn more a year from sitting on the boards of other Kremlin-controlled blue-chips, such as Russian Railways, Rostelecom, Gazprombank and Transneft.

Dmitriev’s ascent from his relatively modest roots in Kyiv to Kremlin inner sanctum is an unlikely tale.

When he was just 14, Dmitriev left Ukraine in 1989 to live with friends of his parents in California, where the host family and Dmitriev convinced administrators at Foothill College to enrol the precocious teenager. The young Ukrainian soon developed a dream to study at Stanford University, one of the most prestigious US universities.

In 2012, Dmitriev recalled those times in an interview with business daily Vedomosti: “I talked to the professors and they told me: ‘Before you go to university, you need to show that you can adapt to American realities.’ Suddenly, the free spirit of California will somehow affect you in such a way and you will not succeed.”

As a result, the bookish Dmitriev knuckled down at Foothill College for two years and then received a full scholarship for his studies at Stanford, where he was one of the few foreigners to have a full scholarship for the entire period of his study. 

A BA in economics with high honours at Stanford led to stints working for Goldman Sachs, the most influential investment bank in the US, and McKinsey, the most prestigious management consultancy.  He later continued his education at Harvard Business School, where he completed the MBA program, laurelling as a Baker scholar.

Dmitriev worked as an investment banker at Goldman Sachs in New York and a consultant at McKinsey & Co. in Los Angeles and Prague, before returning to Russia in 2000. He was an associate at private equity fund Delta Private Equity Partners from 2002 to 2007, while also working for The US Russia Investment Fund under the leadership of industry stalwart Patricia Cloherty.

From 2007 to 2010, he served as the president of Icon Private Equity, a buyout fund owned by Ukrainian billionaire oligarch Viktor Pinchuk, before being headhunted in 2011 to run the newly created Russian Direct Investment Fund (RDIF), a sovereign wealth fund to make co-investments in Russia private equity bets.

Dmitiev said his mission was "to change the face of Russian capitalism" and make the Russian economy less dependent on the petroleum industry by "overcoming western funds’ reluctance to invest in a country many viewed as corrupt, prone to state meddling and plagued by a law-of-the-jungle legal system."

Under his stewardship, RDIF has invested more than RUB85bn itself and over RUB765bn from co-investors including the sovereign wealth funds of Saudi Arabia, UAE, China, Qatar, Kuwait, Bahrain, South Korea, Japan, Vietnam, Italy, France. Foreign partners have included BlackRock, One Equity Partners, Goldman Sachs, and Deutsche Bank, Baring Vostok and UFG.

RDIF also attracted over $27bn from international sovereign wealth funds through long-term strategic partnerships. However, some of the RDIF transactions investing in projects close to Putin’s close coterie of billionaire friends from St Petersburg  have caused concern.

RDIF invests in the projects of the Sibur petrochemical holding owned by oligarchs Leonid Mikhelson and Gennady Timchenko. Dmitriev even helped out Timchenko after he was included in the US sanctions list.  Reuters reported that a RDIF subsidiary bought out the billionaire's Gulfstream business jet, which he could no longer use due to the imposed restrictions. RDIF also invested public money in the companies of other businessmen close to the Kremlin: Oleg Deripaska's EN+ Group, Andrey Guryev's PhosAgro, Mikhail Fridman's Rosvodokanal, and Alisher Usmanov's Group.

With his western education and experience working for Wall Street banks, Dmitriev is intuitively pro-markets rather than favouring the heavy hand of the state.  

He was one of the first Russian tycoons to personally speak up in 2019 in defence of Michael Calvey, the detained founder and head of the Baring Vostok Capital. Dmitriev and Calvey, an American with the best track record for buyouts ever in Russia, would have competed in the same deal pool for years.

Dmitriev appealed to Moscow City Court, Moscow’s Basmanny district court, and the Russian Investigative Committee, requesting to put detained Michael Calvey and other Baring Vostok employees to house arrest. A court in Moscow eventually released Calvey from pretrial detention after 18 months and put him under house arrest. 

Dmitriev is rarely asked about his Ukrainian roots and what he thinks about the conflict between the two Slavic brotherly nations.

In 2012, he was quizzed by a Vedomosti journalist how he would compare Ukraine with Russia politically due to the fact that they are both very familiar to him. Dmitriev was scathing about how “the so-called democratic change” after the Orange Revolution had led to what he claimed was three to fourfold increase in corruption and “a wild battle” between democratic clans.

Dmitriev doesn’t advertise it but still had close relatives still in Ukraine up until a few years ago. Dmitreiv and father Alexander, who was based in Kyiv, were involved in an ambitious real estate project “Olympic Park,” which was also backed by billionaire tycoon Nikolai Lagun. 

The development, which was to consist of 1,090 English-style cottages, was heavily advertised to Ukrainian expats.

The glossy brochure read: “Proximity to Kiev, a beautiful and picturesque area, clean air, low building density, large recreational areas (project 60 hectares – author) and modern trade and service infrastructure like in a city. We will make your life in Olympic Park as comfortable as possible and carefree.”

The project was a disaster. Obligations were constantly violated during construction from 2007 to 2009. There was a gross non-compliance with building codes and systematic violations led to the fact that many of the few completed houses had to be dismantled to their foundations.

Some 200 investors were left high and dry. A Ukrainian couple working as academics in the UK contacted me to tell me that they had paid all their money upfront, but had been left with a shell for cottage.  The couple later informed me that they couldn’t go on the record any longer after they “had been taken care of” by Dmitriev and his associates.  

In November 2010, Dmitriev promised investors he would continue working on the project, but only if Lagun also agreed to continue.

When Dmitriev landed the RDIF role, he was even more reluctant to openly admit his involvement in Kyiv’s Olympic Park.

I have interviewed Dmitriev several times over the years and he was always incredibly accessible due to his desire to promote the RDIF, its investments and its global co-investors. At Bloomberg News where I worked for six years, his PR representatives would constantly pester bureaus around the world that "a Russian newsmaker" was in town. 

On the fringes the St Petersburg International Economic Forum (SPIEF) in 2014, I was chatting with Dmitriev for  10 minutes about the RDIF and finally asked him about the Olympic cottage project and his family’s involvement.

Dmitriev didn’t say a word, turned on heels and quickly walked away from the corporate tent where we had been chatting.

Dmitriev and the RDIF did not respond to a request for comment.