Stephen Jennings Steps Down From RenCap

Stephen Jennings, a Moscow based financier, and once the New Zealand’s richest man, steps down from the investment bank Renaissance Capital, which he helped to create seventeen years ago, after his bid to raise more capital for the money-losing bank was rebuffed by Mikhail Prokhorov.

According to the statement issued on November, 14^th, 2012, Prokhorov’s Onexim Group, which bought 50% of RenCap during the crisis of 2008, is now acquiring the remaining half. Once the transaction has been finalized, Onexim will become the indirect shareholder of 100% of Renaissance Financial Holdings Limited (“RFHL”), the investment bank operating internationally under the name Renaissance Capital, and indirect owner of 89% of RCISL, the consumer finance bank operating in Russia under the name Renaissance Credit. 

The 52-year old Jennings will still serve as the chief executive of the Renaissance Group, the RenCap’s parent company, while John Hyman, a former deputy CEO will become the new CEO of the investment bank. Terms of the deal weren’t disclosed.

Stephen Jennings was one of the first foreign financiers to come to Russia after the collapse of the Soviet Union. In 1995 he established RenCap hoping to make a big appearance in the European, Asian and African markets. For a while, his stellar team of executives, leveraged against the outdated state banking sector, managed to sustain a lucrative business in Russia. However, RenCap was badly hit by the crises of 1998 and 2008, as well as by the consolidation of Russian finance in the hands of state-backed banks, such as Sberbank and VTB.

As the FT reported, in 2008 Jennings sold a 50 percent stake to Mikhail Prokhorov in a deal that valued the group at $1bn, which was only a quarter  of the price the financial group sought in the unsuccessful talks with VTB a year before. After the cash influx, RenCap ventured on an ambitious expansion in Africa and Asia, however this year it has pulled back in Asia, closing its offices in Hong Kong, Beijing and India. 

Onexim executives are optimistic about the bank’s future, and dedicated to supporting RenCap’s expansion efforts. “We strongly believe in the strategy of Renaissance Capital and that the financial resources of Onexim will only strengthen the unique position of the bank in the markets in which it operates,” said  Dmitry Razumov, Onexim’s chief executive in the statement.

“The transition of the business to Onexim’s full ownership will strengthen the financial footing of Renaissance Capital and further enhance its operations across Russia, the CIS, Central and Eastern Europe, and Africa,” added the new CEO John Hyman.

However, some experts see Jennings’ step down as a symbol of a dramatic change in the Russia’s capital markets. “It’s the end of an era for Renaissance and Russia,” commented Dmitri Kryukov, the Verno Capital founder who worked at RenCap as head of equity trading in the 1990s, to Bloomberg. “It won’t be the same without Stephen, but the investment-banking landscape had changed, and they had been squeezed so much by the state banks.”