After being unceremoniously booted out of Russia in 2005 for lifting the lid on widespread corruption and the subsequent beating to death of his lawyer, Sergei Magnitsky, in a Moscow jail in 2009, Bill Browder vowed to make it his life’s mission to pursue justice for Magnitsky.
Since then his anti-corruption advocacy work has led to 34 countries around the world introducing legislation – so-called Magnitsky Acts – to freeze the assets and bar visas for human rights violators, and the number of countries continues to grow.
Browder’s metamorphosis from ambitious financier – at its peak Hermitage Capital Management, the firm he founded in Moscow in 1995, had assets under management of $4.5bn – to campaigner on money laundering and human rights is chronicled in his second book, Freezing Order, which was published in April and quickly reached the top of the best-seller lists.
The book documents how the Russian president Vladimir Putin himself profited from a $230m corruption scheme that Browder and Magnitsky had exposed, and how the Putin regime has pursued him around the world , including getting Spain to arrest him using an international arrest warrant while Browder was in Madrid to meet Spain’s anti-corruption prosecutor.
After Browder was turfed out of Russia, the offices of Hermitage were raided by officers from Russia’s interior ministry. Documents were confiscated and doctored to set up the elaborate $230m bogus tax rebate scam.
While most of his time is now devoted to campaigning, Hermitage – which made Browder’s fortune in the 1990s and early 2000s by identifying and investing in undervalued Russian companies – is still going, albeit it, as Browder puts it, as “a shell of its former self”. The firm operates a City office where about 10 people are employed, some of whom work for Hermitage and the others on Browder’s advocacy work.
After relocating to London from Moscow in 2005 Browder spent a few years investing in other emerging markets around the world, but he now prefers to play safe. “I have now come to appreciate the rule of law so much that I can’t be in a place where there’s no rule of law for my money,” he tells Private Equity News.
“My portfolio is now mostly private equity in developed markets. I’m like a typical family office investor, investing in private equity and hedge funds and other things like that. I’m not managing anyone else’s money.”
Asked whether getting his fingers burnt in Russia has made him more risk-averse, Browder says: “I think I’m just becoming wiser. Investment is always about balancing risk and reward. There is a lot more risk in a situation where there’s no rule of law.”
“I basically discovered that you can’t run a client business while chasing and being chased by the world’s most evil dictator, and expect people to keep their money with me.”
“I now try to focus on the people who are what I call good athletes and good fiduciaries, which tend to be smaller funds run by people who are trying to prove themselves as specialists in certain key areas.”
Browder does not disclose the assets of his firm “as that would just be disclosing my wealth”, though various media estimate his wealth at around $100m.
The Ukraine crisis, he warns, is going to severely dampen the global investment climate “because it creates that much more inflation and puts central banks on the backfoot”.
“Interest rates will rise a lot more than they already have and that is going to destroy a lot of valuation, particularly the more speculative stuff. The higher companies flew, the harder they’re going to fall.”
The US-born British financier says that, while he welcomes the sanctions imposed on Russia by the west, “it’s coming too late. So many deaths could have been avoided if the West had provided the military hardware needed earlier.”
The father of three says that if the West had been tougher about Russia’s 2008 invasion of Georgia or, in 2014, its annexation of Crimea and the shooting down of the Malaysian Airlines flight MH17 the invasion of Ukraine could have been avoided.
The US withdrawal of its last remaining 3,000 troops from Afghanistan in 2021 was a clear signal to Putin that the West had little appetite for military engagement. “This whole catastrophe could have been avoided if we had sanctioned Russia and Putin before this whole thing even happened,” he says.
“If we had just applied 5% of the sanctions that are currently in place in response to other things that Putin has done, that might have given him a different calculus as to what he is doing now.”
“The sanctions imposed so far have probably been more hard-hitting than any in the history of sanctions, but they are still not enough.”
He points to the fact that, of the 118 Russian oligarchs listed by Forbes magazine, only 35 have so far been sanctioned by the West.
The US, Browder says, made a second huge mistake in being explicit in saying it would not get involved in the Ukrainian war, other than supplying Ukraine with defensive weapons. Its policy of “strategic ambiguity” – whereby the US deliberately does not state how far it would go to defend Taiwan in the event of an invasion by China – should have been extended to Ukraine, believes Browder.
“If it had been clear to Putin what our position was he might not have invaded Ukraine,” he says.
Because of escalating global commodity prices since the war started, Russia is receiving roughly a billion dollars a day from its oil and gas exports, roughly the amount that the regime is spending per day on the war.
“In theory, Putin could carry on killing Ukrainians into perpetuity unless we do something about cutting off the money that we’re sending him for oil and gas,” Browder warns.
On the philosophical question of whether Putin is, as some have suggested, a good cop turned bad because of the corruption endemic in Russia, Browder believes the former – though he admits that when Putin came to power in 2000 he was “fooled into thinking that he was just some sort of uncharismatic technocrat”.
For the first three years of Putin’s presidency it appeared that the new leader was trying to impose order on the Wild East market that Russia had become, where post-Soviet state assets were sold off on the cheap.
Browder, meanwhile, had made his money by exposing corruption in some of Russia’s newly-created behemoths such as Gazprom and, through shareholder activism, raising their share price.
But, following the jailing of Mikhail Khodorkovsky in 2003, the richest Russian oligarch at the time, it became clear that Putin was not trying to root out corruption, but was instead hell-bent on eliminating anyone who stood in the way of his own self-enrichment.
“Nobody goes into government service in Russia to serve the government or the people,” Browder says. “From the lowest traffic cop right up to the highest government official, including the president, they go into public service to steal money. The higher you are, the more money you steal.”
“And so it’s 100% certain that Putin has been a crook his entire life. But there’s an expression that power corrupts and absolute power corrupts absolutely. And as Putin became more powerful, he became more corrupt. And as he became more corrupt, he became even more powerful.
“There’s no way Putin could ever step down. It’s more or less true in all of these post-Soviet countries that if you step down, then your successor puts you in jail and takes everything away from you.
“He’s caused so many people hardship, death and destruction that they would come after him in a big way if he lost the presidency. To keep his money, stay out of jail and remain alive Putin has to stay in power.”
Putin’s motivation, Browder says, “hasn’t got anything to do with any grand vision of Russian Empire nor Nato enlargement. Putin was scared that something was going to change to make him lose power and this war is his desperate attempt to cling to power.”
Browder calculates that around a trillion dollars has been illegally siphoned off from Russian state coffers since 2000, with around $200m being accumulated by Putin himself.
“That’s money that should have been spent on hospitals and schools and filling up the potholes in the road. Instead it has been spent on private jets and yachts and villas in the south of France. Eventually that’s going to come back to haunt him. He’s created a highly combustible situation for himself. He has to trust the people who hold his money and that’s one of the reasons he doesn’t want to give up power because he doesn’t trust anybody.”
The reason so many were fooled into thinking Putin to be a reasonable and rational being, Browder says, is partly Putin’s poker face which betrays little to no emotion.
“You can project onto his face whatever you think he might be thinking, and he won’t give you any alternative or contradictory information. So everybody kind of projected onto him whatever they wanted him to be and whatever they hoped he would be, and that’s who he was for a brief period of time – until we all discovered who he really was.”
Browder dismisses Putin’s justification for his so-called “special military operation” in Ukraine – that Russia’s dominant position within the former Soviet Union entitles it to a “sphere of influence” among its neighbouring former Soviet republics – as “nonsense”.
Likewise, Browder dismisses French president Emmanuel Macron’s plea for Putin not to be humiliated by the West. “The West should do everything it can to defeat Putin,” says Browder. “Putin started a war of aggression against a peaceful neighbour that will potentially kill hundreds of thousands of people and Putin doesn’t deserve any respect whatsoever. He sees any weaknesses amongst the Western allies and that creates more danger still.”
The most likely outcome of the war, Browder believes, is a situation where neither Ukraine nor Russia achieves an emphatic victory anytime soon, and “it just becomes a long and ugly war of attrition”.
With London widely regarded as the largest global financial centre for the laundering of Russian dirty money, Browder criticises the UK for its poor law enforcement. “It’s not so much the [anti-money-laundering] rules that could be tweaked to make them better. But at the moment, there is no energy within the law enforcement agencies to act properly. And so there has not been a single Russian economic crimes prosecution in the UK since Vladimir Putin came to power.”
Browder says he has no plans to write more books, at least for the time being. “This book took me four hours a day for three years every day without a single day off. I think I can take a break from writing for a little while.”
Bill Browder – CV
Born: Princeton, New Jersey
Lives: Central London
Family: married with three children
1985, BA Honours Economics, University of Chicago
1988, MBA Stanford Graduate School of Business
1989-1991: Boston Consulting Group, London
1992-1995: Salomon Brothers, London. East European specialist.
1995 to date: Browder founded Hermitage Capital Management in Moscow in partnership with the Monaco-based billionaire Edmond Safra, who later died in a fire started by a servant. The firm has operated from London since Browder was evicted from Russia in 2005.
Hobbies and Interests
In his spare time, he enjoys travelling and entertaining family and friends. He also likes skiing (downhill, cross-country and touring), hiking, tennis, poker and going to the cinema. His favourite film is The Year of Living Dangerously.
To contact the author of this story with feedback or news, email Mark Latham