The Return of the Russian Billionaires

Photo: Creatas Images

After getting crushed by falling commodity prices two years ago, their ranks cut by 70 percent, Russian billionaires are back and more plentiful than ever. According to a recent study, Russia currently has 114 billionaires, more than the 101 it had in 2007.  Bolstered by a 20 percent rise in the Russian stock market in 2010, and insatiable demand from China, Russian oligarchs are again flush. The latest evidence: Russian tech billionaire investor Yuri Milner just paid $100 million for a house in Silicon Valley, thought to be the most paid for a house in the U.S. ever.

 

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  1. Nikki says:

    A Russian joke from the 1990s goes like this: “Check out my necktie, it cost me $5,000!” — “You are an idiot, I know a store where you can buy one exactly like this for $8,000.”
    Prediction: expect more record-price purchases from wealthy Russians, billionaires or otherwise. They don’t buy things, they buy demonstrations of superiority.

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  2. ktb says:

    I want to ask who writes his Homeowners insurance, but I can’t even imagine a house like that being covered on a HO3 form. Who writes insurance for these kinds of houses?

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    • JK74 says:

      If you can insure a billion dollar factory, refinery, office block or industrial complex, you can insure a $100m house. Sure, the premiums will be fierce, but so will the power bill, maintenance, property taxes and cleaning costs. Presumably the buyer allowed for these in the purchasing decision, just like anyone else would, whether it’s a $100m house, a $10m house or a $100k house.

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      • ktb says:

        The thing about billion dollar factories is that they have a tremendous number of risk management options. I doubt a single insurer would pick up a loss exposure like that on its own. It might go in on the risk with a number of other companies in some form or another. It could possibly pick it up on its own and then pass the bulk of it along through reinsurance. But a billion dollar factory has numerous options. Depending on what it does, it might join some kind of risk retention group or pool. It could also just forsake the private market altogether, form its own captive insurer and pay itself premiums. And really, I’m incredibly unfamiliar with billion-dollar factory risk management practices. The thing is that it has so many options.

        And so I wonder about $100m houses. A $100m house is to a $100K house as a $1b factory is to a $1m factory. You’d think that the owner of that house has far more options than just walking into his local State Farm agency and asking for a regular homeowners policy. Does Mr. Milner also invest in insurance companies? Perhaps he could write his own policy. Maybe we’ll see “Big Russion Insurance Co.” applying for a license in California sometime soon.

        I’m just really curious. Does anyone know what kind of insurance or risk management plan people get for these houses? Is there some kind of standardized Super-HomeownersPlus Form that some insurers issue?

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  3. Mike B says:

    The more Russian Billionaires the more future American, ex-Russian Billionaires who have fled when the Government du Jure decides to seize their assets.

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