The Bell, 3/17/25

On the eve of a phone call with Donald Trump, Vladimir Putin unveiled his latest overture to the United States. For the first time in three years of war, he signed an order on Monday allowing major US investment funds to sell their holdings of frozen Russian securities. The move comes as US media report the White House is looking at what carrots it can offer Moscow, with the potential recognition of Crimea as Russian territory on the table.

• Vladimir Putin has signed an order allowing ten investment funds from the US and UK to sell their assets in Russia. From the list of firms, it is clear the assets in question are Russian securities, in which non-resident investors held large stakes before the war. On 1 February 2022, non-residents owned around 20% of Russian government bonds (OFZs). Among those given the green light to sell are some of the largest Western funds that have invested in Russia, including Franklin Templeton, GMO, Jane Street and Baillie Gifford.
• Putin’s decision is a milestone: no Western investment fund has yet been able to pull out or sell securities stuck in Russia. They have not been nationalised, but the assets have been transferred to frozen so-called type-C escrow accounts, from which money cannot be withdrawn without permission from the Russian authorities. In total, these accounts had assets worth 500 billion rubles ($6.4 billion) in them as of March 2023, Bloomberg reported, citing Central Bank data.
• The buyer, listed in Putin’s order, is little-known New York-based hedge fund 683 Capital Partners. But they won’t hold onto them for long. Putin has also authorised two Russian legal entities, LLC Cepheus-2 and LLC Sovremennye Fonds Nedvizhimosti, former structures of Sber, which are most likely still connected with the state bank, to buy the assets from 683 Capital Partners.
• Who is 683 Capital Partners and why are they involved as a middle-man in the deal? According to the US Securities and Exchange Commission, at the end of 2024, 683 Capital Partners managed assets worth $1.6bn (a tiny amount in the hedge fund world), and had just 10 employees. The firm seems to have nothing to do with Russia. But The Bell immediately noticed that the founder and head of the fund, Ari Zweiman, studied at both Stanford and Harvard in exactly the same years as the head of RDIF, Kirill Dmitriev, who is now one of the negotiators with the Americans, focused on economy issues. In response to a question about his possible association with Zweiman, Dmitriev said: “I am not familiar, neither I nor RDIF has ever had any contacts with this fund.”
• The authorisation of these deals comes a day before a phone call between Putin and Trump, during which the two sides will discuss (1, 2) terms for ending the war in Ukraine. Trump himself said on Monday night that the conversation would take place in the morning (i.e. evening Moscow time). Semafor claimed that the White House is going through a variety of options on what to promise Vladimir Putin for agreeing to a ceasefire in Ukraine – including allegedly exploring the possibility of recognising Crimea as Russian.

Why the world should care

The scheme for selling the Russian assets of American investment funds described in Vladimir Putin’s order looks suspicious. Western funds for some reason sell their assets to an intermediary who will then resell the securities to a Russian entity. There can only be two good explanations for such a scheme: protecting the Western sellers from the threat of sanctions, and kickbacks for the intermediary players (quite possibly both).