In a significant development, Russian President Vladimir Putin has signed a presidential decree permitting a U.S. hedge fund to purchase securities of Russian companies from certain foreign shareholders. This move comes amid ongoing financial sanctions imposed on Russia by the West since the onset of the Russia-Ukraine conflict in 2022. The decree allows 683 Capital Partners, a U.S. hedge fund, to acquire shares from Western institutions like Jane Street, GMO, and Franklin Templeton. These shares belong to major Russian firms, including Norilsk Nickel and VTB Bank.
The decree further authorizes two Russian companies, Cepheus-2 and Modern Real Estate Funds, to acquire these securities from 683 Capital Partners without requiring additional approval from Putin. Based in New York and managed by Ari Zweiman, 683 Capital Partners manages approximately $1.6 billion in assets.
This development coincides with an anticipated phone call between U.S. President Donald Trump and Putin, part of U.S. efforts to broker a 30-day ceasefire agreement in the Russia-Ukraine conflict. Trump has expressed a strong commitment to ending the war in Ukraine, having engaged in negotiations over territorial and asset divisions.
Investors are closely monitoring whether Trump's potential return to the White House could lead to a rapid thaw in U.S.-Russia relations, potentially reopening channels for Western investors to trade Russian assets. However, the decree provides limited details, leaving many questions unanswered.
Due to sanctions, Western investors typically seek approval from their national regulators and the Kremlin before withdrawing Russian assets. It remains unclear if the investors mentioned in the decree have secured such dual permissions.
Anticipation of improved U.S.-Russia relations has led to significant gains in Russian assets, with the Russian ruble appreciating 36% against the dollar this year. Russian stock markets have surged as investors bet on a potential easing of U.S. sanctions. Wall Street giants like Goldman Sachs and JPMorgan are reportedly facilitating increased demand for trading Russian assets.
