Russian billionaires who have been bitten by sanctions are buying up student housing in the U.K, according to Property Week. LetterOne, an investment group founded by Mikhail Fridman, oil tycoon and, with a net worth of $14.1 billion, the second richest man in Russia, German Khan and Alexei Kuzmichev, is purchasing the Pure Student Living Portfolio from the Carlyle Group and Generation Estates.
The plummeting price of oil has made commodities not as profitable as they have been in the past, and the Russian billionaires are looking at property in the United Kingdom as a safe haven. The three own Alfa Group, a powerful Russian conglomerate and formed LetterOne in Europe after selling a stake in a TNK-BP oil venture. The student housing portfolio contains 2, 150 beds with five London student blocks, 4 in Hammersmith and one to be completed in Whitechapel.
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Fridman‘s move into real estate abroad is in keeping with his statement in the Financial Times that oil prices don’t seem to be bottoming soon; it seems that he thinks it is best to diversify investments beyond black gold.
“While many of my colleagues in Russia and elsewhere are arguing about when the oil price may bounce back, I am convinced that we have entered a new period of low oil prices”, Fridman said in a column for the Financial Times.
“It is like alchemy, but in reverse: black gold, a precious substance whose price was determined by its scarcity, has turned into a black, smelly liquid that makes wheels turn”, he said.