Stephen Jennings, the co-founder of the Russian investment bank Renaissance Capital, has dubbed the war in Ukraine “a catastrophic failure of international diplomacy.”
Speaking to the Leighton Smith Podcast in New Zealand last month, Jennings looked back at his more than two decades in Russia, his hasty exit after losing control of RenCap to his oligarch partner as well as his reflections on the war in Ukraine.
“What Putin has done is indefensible, but it doesn’t mean that there weren’t other contributing factors,” Jennings told Smith in an extensive interview. “Overall, it is a catastrophic failure of international diplomacy going back to the 1990s, when an awful lot of diplomats, US and German diplomats, predicted this kind of scenario could arise if the post-Soviet situation wasn’t handled very carefully.
“That didn’t happen, in my opinion, and that definitely contributed to the war, which is not to exonerate the Russian leadership but it’s important to understand why it happened and where it may go from here.”
Jennings founded RenCap in 1995 alongside a group of business partners. The investment bank quickly became a symbol of Russia’s transition to a market economy by working on the biggest deals and attracting the best bankers by paying mouth-watering salaries.
Under the stewardship of Jenning, RenCap also set up an investment bank in Kyiv and invested heavily in Ukraine’s agrarian sector.
“We had the IB there and we farmed 230,000 hectares of cropping land and produced about 1mn tonnes of grains,” explained Jennings. “We consolidated tens of thousands of small leases and brought in modern management practices and built one of the largest farms in the world. We had incredible land and productivity.”
RenCap bankers did many deals in Ukraine while this journalist attended a two-day forum in Kyiv, where the former British Prime Minister John Major was the headline speaker.
Jennings, an economist who once advised New Zealand’s Treasury, apportions some of the blame for Ukraine’s invasion at the door of the Americans.
“For the Americans, the Cold War never ended and especially for sections in the State Department and the Military Industrial Complex,” he said. “I always say what if the boot was on the other foot and the Soviets won the Cold War and the Americans lost and the Soviets meddled extensively in politics in Canada and Mexico and put arms there and tried to orchestrate regime change.
“We know from the Cuban Missile Crisis that the Americans would have retaliated in no uncertain terms. The Western narrative seems very one-sided and how on earth have the Russians done what they have done, but there are two sides to the story, and it’s not as complicated as people make it out to be.”
Jennings predicts that the West, and particularly the US electorate, will lose interest in the war.
“At that point, the Americans will probably disengage, and the Europeans will lose interest and the Ukraine will be left high and dry,” he added.
In November 2012, Jennings was ousted from RenCap after his billionaire partner Prokhorov rebuffed his requests for more cash for the operation, which was bleeding money, and threatened to withdraw millions he held on deposit with the bank that could have caused it to collapse.
Legend has it that Jennings lost the keys to the business after a showdown meeting with Prokhorov and Suleiman Kerimov, another tycoon who had substantial funds on account at RenCap. Jennings requested more funds to cover the firm's losses and the tycoons turned on him, demanding he hand over his 50% stake plus one share.
RenCap sources said Jennings, then 52, faked a heart attack to escape. An ambulance arrived and the driver was handsomely paid to divert to Sheremetyevo Airport so Jennings could escape to London. He hasn't been back since.
Neither Prokhorov, Kerimov nor Jennings have ever spoken about what went down. Jennings eventually signed the papers, surrendering control of the investment bank and the consumer lender RenCredit to Prokhorov while retaining ownership of the group's African assets.
Speaking on the podcast about his departure for the first time, Jennings admitted that he left Russia “very quickly” in 2012.
“It had become a very hostile environment for normal international style business, and it became untenable to run a normal international style business,” said Jennings. “There was huge cronyism around the Kremlin.”
Jennings said he never met with President Vladimir Putin but admitted that this may have had a negative effect on his own personal situation.
“I had the opportunity to meet all the presidents while I was there, but it was like being summoned to meet the headmaster and I never got on well with headmasters,” explained Jennings, who preferred to send his underlings to the Kremlin. “I just didn’t want to sit there and being lectured.”
Jennings is very critical of Western media, particularly the FT and the Economist, for “parroting Western narratives” in their coverage of Russia.
“The Russian story has been rewritten as part of the negative narrative about the war and Putin, which is understandable in a way,” said Jennings. “But the Russian economy was one of the fastest growing in the world over a 15-year period and was going through some of the adjustments that central European countries like Poland were going through and generally did a pretty good job with their economic transformation.
“The problem in Russia is they weren’t as successful as the central European countries were with their political transformation.”
The New Zealander, who is now based in the Zimbabwean capital of Harare, said he doesn’t view the world through a Western lens. His current business, Rendeavour, is involved in building cities across Africa in Kenya, Ghana, Nigeria, Zambia and the Democratic Republic of Congo.
“We have a very multi-faceted and multi-polar world with a very large number of significant countries that are developing and will be increasingly influential globally that will want to trade and integrate globally and will have an increasing impact on all of our lives,” he added.
A one-time regular at the World Economic Forum in Davos, Jennings said the annual gathering of billionaires and wonks is “an echo chamber” and “a talking shop with faddish ideas.”
“I used to go. I am not a fan,” he said. “You wouldn’t be allowed to turn up today and say a bad word about Ukraine and about Ukraine’s history, its prospects and what kind of deal should be done with Russia. That wouldn’t be acceptable.”