Dubovskov Andrey Anatolievich
President, Chairman of the Board
Andrey Dubovskov was born in 1966 in the city of Alma-Ata. In 1993 he graduated from the All-Russian State Institute of Cinematography. S.A. Gerasimova is a director by profession.
Mr. Dubovskov has extensive experience in the telecommunications sector: having started his work in 1993, he has held a number of senior positions in Millicom International Cellular S.A., Millicom International Cellular B.V., Regional Cellular Communications LLC, 800 CJSC and other companies in Moscow, Almaty, Nizhny Novgorod, Yekaterinburg, Perm and Kyiv.
2002-2004 - General Director of the Tele2 Group company in Nizhny Novgorod.
Since 2004, he went to work at MTS OJSC, taking the post of director of the company’s branch in Nizhny Novgorod.
2006-2007 - Director of the macro-region "MTS Ural".
In 2007, he began working at CJSC UMS (MTS Ukraine) as First Deputy General Director, and since 2008 he has headed the MTS Ukraine business unit.
From 2011 to March 2018 - President, Chairman of the Management Board of MTS OJSC.
From March 2018 to the present – President of PJSFC Sistema. Member of the Board of the Sistema Charitable Foundation.
Aleshin Igor Viktorovich
Vice President of Security
Igor Aleshin graduated from the Omsk Higher Police School of the USSR Ministry of Internal Affairs with a degree in Law in 1987.
Since 2014, he has been Senior Vice President, Head of Security Service at PJSC MTS Bank. Before joining MTS Bank, he held various positions in the Sistema Group, including working as vice president for security at MTS and the Medsi Group of Companies.
In 2011-2012, he served as Deputy Minister of Internal Affairs of the Russian Federation, in 2008-2011 - Minister of Internal Affairs for the Republic of Bashkortostan, in 2006-2008 - Minister of Internal Affairs for the Republic of Karelia. From 1989 to 2006, he worked in various positions in the Department of Internal Affairs of the Omsk Region: in the criminal investigation department and units for combating economic crimes, head of the department for combating economic crimes, then first deputy chief, head of the criminal police of the Department of Internal Affairs of the Omsk Region.
In April 2018, he was appointed to the post of Vice President for Security of Sistema PJSFC.
He has state awards: medal “For Services to the Fatherland”, II degree, medal “For Distinction in the Protection of Public Order”.
Egorov Sergey Valerievich
Managing partner
Sergey Egorov graduated from the Kyrgyz National University with a degree in Finance and Credit.
Works at Sistema JSFC since 2012; since April 2018 – as director of special projects. Since May 2019 – Managing Partner of PJSFC Sistema.
From 2008 to 2012 he worked as an analyst at Sberbank Capital LLC.
In 2007 – 2008 was a senior analyst in the private equity and structured finance department of United Capital Partners Advisory LLC.
Previously, he worked as an expert in the audit services department at Ernst & Young LLC.
Zasursky Artyom Ivanovich
Vice President of Strategy
Born in October 1979 in Moscow.
In 2001 he graduated from Moscow State University. M.V. Lomonosov, majoring in “Social and Economic Geography of Foreign Countries”, in 2005 – postgraduate studies at the Faculty of Journalism of Moscow State University.
Since 2016, he has been Vice President - Head of the Strategy Complex of Sistema JSFC. In April 2018, he was appointed Vice President for Strategy at Sistema PJSFC.
He joined the AFK Sistema Group in 2011 as Director of Development for Stream LLC. In 2012-2013 - Vice President for Development of OJSC SMM. From February 2013 to May 2016 held the position of General Director of Stream LLC.
Between 2007 and 2011. worked as General Director of Dragonara LLC, Executive Director of Territory of Games LLC. In 2002-2003 – Head of the Development Department of Crossmedia Solutions LLC.
Katkov Alexey Borisovich
Managing partner
Alexey Katkov graduated from the Academy of National Economy under the Government of the Russian Federation with a degree in management. Since 2015, he held the position of CEO and President of the Sistema Venture Capital fund.
In 2015, Alexey Katkov was the first vice president and chief operating officer of JSC SMM (part of the AFK Sistema Group). From 2000 to 2015 worked at MAIL.RU LLC, where he held the positions of vice president, commercial director and director for international and regional development.
Since April 2018 - managing partner of PJSFC Sistema.
Matveeva Svetlana Sergeevna
Vice President of Human Resources
Svetlana Matveeva graduated from the Russian Economic University. G.V. Plekhanov, as well as the Faculty of Computational Mathematics and Cybernetics of Moscow State University. M.V. Lomonosov.
Works at Sistema JSFC since 2012; since March 2017 - as Executive Director for Motivation, Training and Organizational Development of the Human Resources Department, which she headed in May 2019 as Vice President.
Previously, she held various positions in the Sportmaster group of companies.
In 2019, she became the winner of the all-Russian management competition “Leaders of Russia” (entered the top 15 finalists).
Mubarakshin Oleg Saidashovich
Managing partner
Born in 1968 in the Saratov region.
In 2000 he graduated from the Moscow State Law Academy with a degree in Jurisprudence and in 2002 from the Financial Academy under the Government of the Russian Federation with a degree in Finance and Credit. In 1991 he graduated from the Military Institute of the Ministry of Defense.
In 1996-1998 – Deputy General Director for Legal Affairs of the oil and gas producing company “White Nights” (Russia).
From 1998 to 2007 – Vice President for Corporate and Legal Affairs for Central and Eastern Europe (Russia), from 2008 to 2009. – Vice President for Legal Affairs for Western Europe (Belgium) of the InBev group of FMCG companies.
In 2009-2013 – Member of the Board, Head of the Legal Department of the international investment and consulting group EastOne (Ukraine, UK).
Since 2013, he held the positions of Vice President, Senior Vice President - Head of the Legal Issues Complex of AFK Sistema.
Pilipenko Andrey Vladimirovich
Vice President for Government Relations
Andrey Pilipenko graduated from Voronezh State University with a degree in History.
Since 2015, he worked as Vice President for Security at Management Company Segezha Group LLC, part of the AFK Sistema Group.
In September 2018, he moved to PJSFC Sistema to the position of Vice President for Relations with Government Authorities.
Rozanov Vsevolod Valerievich
Managing partner
Born in 1971 in Moscow.
Graduated from the Faculty of Economics of Moscow State University. M.V. Lomonosov with a degree in Economics of Foreign Countries.
From 1993 to 2001 He held various positions at the consulting company Bain & Company Inc. in Moscow, London and Stockholm.
Since 2002, he has held senior positions in the telecommunications assets of the Sistema Group as Deputy General Director for Economics and Finance of MTU-Inform CJSC, Vice President for Economics and Finance of Comstar - United TeleSystems OJSC (2004-2006) , Vice President for Finance and Investments of MTS OJSC (2006-2008).
From 2008 to 2013 – General Director of Sistema Shyam TeleServices Limited (“MTS-India”).
Since 2013, he has been Senior Vice President - Head of the Finance and Investment Complex of AFK Sistema.
In April 2018, he became the managing partner of Sistema PJSFC. Member of the Board of the Sistema Charitable Foundation.
Sirazutdinov Artem Gennadievich
Managing partner
Born in 1969 in Novokuznetsk.
In 1993 he graduated from the Siberian Metallurgical Institute with a degree in Aluminum Production Technology. In 1996 he received an MBA degree from Virginia Commonwealth University (USA).
He came to Sistema JSFC in August 2016 to the position of Vice President - Head of the Investment Portfolio. In April 2018, he became the managing partner of Sistema PJSFC.
From 2010 to 2016 was Deputy Chairman of the Management Board of OJSC JSCB MFK.
In 2007-2010 – Member of the Board, Chief Investment Officer (CIO) of the investment consulting company EastOne.
In 2005-2007 - Managing Director of the Sputnik Investment Group.
From 1996 to 2005 – Vice President of the Management Company “Russia Partners”.
He came to Sistema JSFC in August 2016 to the position of Vice President - Head of the Investment Portfolio. In April 2018, he became the managing partner of Sistema PJSFC. Since November 2018, he has been a member of the Board of the Sistema Charitable Foundation.
Travkov Vladimir Sergeevich
Vice President of Finance and Investments
Vladimir Travkov graduated from Moscow State University. M.V. Lomonosov in the areas of “Economics” and “Management”.
Since 2003, he has held senior positions in the MTS Group, including since 2016, holding the position of Director of the Functional Controlling Department. His responsibilities included organizing and monitoring the effectiveness of the investment process and the activities of various functional blocks of the company, financial planning, budgeting and operating cost management. Previously, he headed the Departments of Planning, Management Reporting and Analysis and other divisions.
Since April 2018, he has held the position of Vice President for Finance and Investments of Sistema PJSFC.
He is a member of the Audit Committee under the Board of Directors of MTS Bank PJSC, and is on the Boards of Directors of MGTS PJSC, MTS Armenia CJSC and NVision Group JSC.
Tulgan Joshua Blair
Vice President for External Relations
He was educated at the American Bowdoin College (Brunswick, Maine) and Phillips Academy (Andover, Massachusetts). In 2004, he completed his master's degree at Georgetown University (USA) and received an MBA degree in strategy and international development from the McDonough School of Business.
Joshua Tulgan began his career at Burson-Marsteller, a leading international communications agency, advising Russian companies on capital markets strategies and financial communications.
Joshua Tulgan joined AFK Sistema in July 2018 from MTS PJSC, where he served as Director of Corporate Finance and Investor Relations since 2012. In this position, he was responsible for debt portfolio management, some treasury operations and risk management, and also led a number of other projects. Joshua began working at MTS in 2006 as Director of Investor Relations. His responsibilities included external relations with investors and financial institutions. Under his leadership, MTS's achievements in investor relations, debt issuance and liability management have received numerous awards.
Before joining MTS, he advised international clients on strategies for entering the Russian and CIS markets, and worked in finance and marketing in Russia and the USA.
Uzdenov Ali Mussaevich
Managing partner
Born in 1962 in Kislovodsk, Stavropol Territory.
In 1985 he graduated from the Rostov Institute of Railway Transport Engineers with a specialization in Automation, Remote Control and Communications in Railway Transport. In 1990, he received additional education at the International School of Survival (Italy).
1994-1997 - Head of the Rostov Commodity Exchange.
1997-1998 – Director of Ajax LLC.
1998-2001 – Director of the Rostov branch of JSOC Bashneft.
2001-2007 – Chairman of the Board of Directors of OJSC Kormmash.
2007-2009 – General Director of Rostovregiongaz LLC.
2009-2012 – First Vice President for Refining and Commerce of JSOC Bashneft.
Since 2012 2013 – Vice President of JSFC Sistema. Since 2013, he held the position of Senior Vice President - Head of the Investment Portfolio of AFK Sistema.
In April 2018, he became the managing partner of Sistema PJSFC.
Shishkin Sergey Anatolievich
Vice President of Corporate Governance and Legal Affairs
In 1992 he graduated with honors from Moscow State University. M.V. Lomonosov, majoring in Jurisprudence. In 1996, he was awarded the academic degree of Candidate of Legal Sciences. In 2010, he completed training in the corporate program “Principles of Effective Management of Investment Projects” conducted by the American Institute of Business and Economics.
Before his appointment in April 2018 to the position of Vice President for Corporate Governance and Legal Affairs of Sistema PJSFC, he was Vice President - Head of the Corporate Governance Complex.
In 2011-2015 – Executive Vice President for Corporate Projects of Sistema JSFC, from October 2014 to December 2015, acted as Senior Vice President – Head of the Corporate Governance Complex. In the period 2005-2011. Headed the Corporation's Property Projects Department.
Before joining Sistema JSFC, he practiced law as a member of the Moscow Bar Association. In 1998-2000 was director of the International Institute for the Development of Legal Economics Foundation.
Yanpolsky Maxim Markovich
Managing partner
Maxim Yanpolsky graduated from Moscow State University named after M.V. Lomonosov, Faculty of Computational Mathematics and Cybernetics. He studied at the Booth Business School of the University of Chicago and has an MBA degree.
Moved to AFK Sistema from MTS PJSC, where he held the post of Vice President for Financial Technologies. Previously, he worked in senior positions at PJSC Bank FC Otkritie, the investment company Third Rome, and Renaissance Investment Management.
President of AFK Sistema Mikhail Shamolin went to work at the corporation’s subsidiary, Segezha. His post will be taken by the head of MTS Andrey Dubovskov. AFK went through a difficult period, changes were necessary, experts explain
Mikhail Shamolin (Photo: Grigory Sysoev / RIA Novosti)
President of AFK Sistema Mikhail Shamolin will leave his position in the company, the main owner of the company, Vladimir Yevtushenkov, told RBC.
“Yes, it’s true,” Yevtushenkov said, answering a question about Shamolin’s resignation as president of the group.
The Board of Directors of AFK will consider the issue of personnel changes in the top management of the corporation on Friday, March 2. The Nomination, Remuneration and Corporate Governance Committee of Sistema recommended that the board appoint Andrey Dubovskov, who heads MTS, to the position of president of the corporation (AFK directly and indirectly owns 50.05% of the operator), “in connection with the planned transition of Mikhail Shamolin to another position in the AFK group “System,” the corporation said. The message does not specify what position Shamolin is moving to. He himself refused to answer this question.
According to an RBC source close to AFK, Shamolin will soon become the Segezha Group, one of the group’s key assets, and will also become its minority shareholder. “Mikhail sets ambitious goals for himself and the company, which are primarily related to turning it into the sole leader of the industry and, of course, entering an IPO,” noted RBC’s interlocutor. Information about Shamolin’s transfer to Segezha Group was confirmed by a source close to one of the Sistema companies.
The MTS Board of Directors, in turn, granted Andrei Dubovskov’s request for early termination of the powers of MTS President and appointed Alexey Kornya, who was the company’s vice president for finance, investments, mergers and acquisitions, to this position.
Andrey Dubovskov came to MTS in 2004 as director of the branch in Nizhny Novgorod from the Swedish Tele2 group, where he held a similar position. In 2006-2007, Dubovskov managed the MTS Ural macro-region, and then moved to work at MTS Ukraine as first deputy general director. In 2008, he headed the Ukrainian division of the operator.
In April 2011, he was appointed president of MTS instead of Mikhail Shamolin, who moved to the post of president of AFK Sistema (controls MTS). In his new position, Dubovskov was supposed to strengthen MTS’s position in the Russian telecommunications market and create opportunities for further development of the operator’s business. The contract with Dubovskov in this position was extended several times, at the beginning of 2017. The current contract was supposed to be valid until March 2020.
Mikhail Shamolin became president of AFK Sistema in March 2011. Before that, he worked for MTS for six years, successively holding the positions of vice president for sales and subscriber services, director of the MTS Russia business unit and, finally, president of the company. Before MTS, in 2004-2005, Shamolin was the managing director of the ferroalloy business of the Ukrainian corporation Interpipe, and in 1998-2004 he worked at the international consulting company McKinsey&Co. The last time his contract was extended was in March 2017 for three years.
Alexey Kornya has been working at MTS since 2004, holding the positions of financial director of the regional division of MTS Ural, director of the MTS group for business planning, director of controlling, vice president for finance and investments. In June 2016, he became vice president of finance and investments, mergers and acquisitions. Before joining MTS, Kornya worked at North-West Telecom and PricewaterhouseCoopers Audit.
Forge of personnel
Dubovskov will become the third president of MTS to head AFK Sistema. Before Shamolin, this position was held by Leonid Melamed, who headed MTS in 2006-2008.
“Both Shamolin and Dubovskov held their positions for a long time, perhaps they needed rotation, additional motivation,” says Raiffeisenbank analyst Sergei Libin.
The arrival of a person with the experience of such a manager as Shamolin will make it possible to “package” Segezha Group well on the eve of the IPO. For Dubovskov, the move to AFK is a promotion, the expert noted.
Otkritie Capital analyst Alexander Vengranovich believes that leaving the post of president of AFK Sistema was Shamolin’s own decision. “It is unlikely that we are talking about a conflict, since Shamolin remains to work within the perimeter of the group,” he said. According to Vengranovich, after a tense year, which included a lawsuit with Rosneft, the ex-president of Sistema most likely decided to move to a calmer position.
According to senior analyst at Uralsib FC Konstantin Belov, “a change in the head of MTS should not have a serious effect, since the company has a well-built management system.” He believes that Root has “sufficient experience and competence.” Belov expects that changes will occur in Sistema's strategy in the near future, but this is not due to a change in leadership, but to the settlement of the dispute with Rosneft. In June 2017, Rosneft filed a claim against AFK Sistema for the recovery of 170.6 billion rubles. compensation for damage during the reorganization of Bashneft. The Arbitration Court of Bashkortostan upheld the claim, reducing the amount of compensation to 136.3 billion rubles. In December, the company reached a settlement agreement to withdraw mutual claims. Under the terms of the agreement, Sistema will pay Rosneft 100 billion rubles, of which 60 billion rubles. already listed.
With the participation of: Maria Kolomychenko
Mikhail Shamolin took over as president of Sistema in 2011, after working for several years as president of MTS, Sistema's largest asset. Under his leadership, Sistema transformed from a holding into an investment company and went through dramatic events associated with the loss of Bashneft and the arrest of the company’s main shareholder, Vladimir Yevtushenkov, in September 2014.
Despite this, the company ended 2015 with a good profit, and a significant share of it came from new assets: in recent years, Sistema has entered new industries.
In an interview with HBR - Russia, Mikhail Shamolin talked about when and what to invest in in Russia, how to place people in top positions, and why not every manager can work in an investment company.
What has changed since AFK Sistema turned from an operating holding into an investment company?
Almost everything. A new management system was created, specific to an investment company. In essence, the company lives by the investment process: it finds targets for assets, weighs them, makes decisions about buying and selling, and about placing shares on the stock exchange. This is all the work of investment portfolios and the investment committee.
And what has the company learned over the years?
An investment company must be good at two things: investing money and appointing people to manage the assets in which it has invested. You can buy a business as good as you like, but without strong management nothing good will come of it. At best, you will earn nothing, and at worst, you will lose everything, and quite quickly. Therefore, we are constantly honing the process of selecting, developing and appointing personnel - primarily at the level of company directors.
What type of people are suited to work in the investment industry?
On the one hand, there must be a healthy appetite for risk, because if there is none, a person will be afraid of everything and will not make any investment decision. On the other hand, this appetite must be limited. If this is not the case, the person will rush into adventures and we will lose money very quickly. Because the influence of the portfolio manager on the decisions of the investment committee is very large. He can lobby and convince you to buy a particular asset, showing it from its most attractive side and smoothing out the negative ones. A portfolio manager must not only invest shareholders’ money correctly, but then manage it all, so he must be an entrepreneur and a manager rolled into one. You also need a professional understanding of the industry and specific knowledge - for example, the ability to work out deals. To conduct a good deal, you need to understand jurisprudence, schematics, and instruments - because transactions can be complex: derivatives, bills, pledges, rights, options - a whole series of instruments.
Are you looking for top managers for the acquired enterprises on the market or within Sistema?
We would like to cultivate as many directors of enterprises as possible at home, because when selecting candidates from outside, hope often triumphs over common sense. A person comes with a nice resume, speaks well and seems promising. You know nothing about his problems, and someone whom you have known for a long time, with all his advantages and disadvantages - and we always pay the most attention to the latter - loses to him. You hope that a person from the outside will perform some kind of miracle, but most often this does not happen. You are waiting for a magician, and a storyteller comes to you.
But it is impossible to completely abandon hiring external candidates. Especially in our activities, where we sometimes enter a completely new business for ourselves. It happens that there is simply no expertise within the company, but in addition to general erudition, energy and knowledge, you need to understand what you are doing here.
Do you mean industry expertise?
Yes, exactly the industry one. You could gather a group of genius techies and ask them to build a car engine in their garage. They can handle it, but the engine will be the size of half a room and won’t fit under the hood. Chrysler or BMW, which have been making these engines for a hundred years, have already stumbled upon all the mistakes that need to be made before making the perfect product. But for us, the path of trial and error is too long. If you don't know in advance where the traps are, then time and money are wasted.
Industry expertise and professionalism in the specific field we are involved in is very important. And if you look at the world's leading companies, often people worked in the industry for 20 years before becoming their CEO.
This is typical for old companies in old industries.
Of course, now there are many stories when something is invented from scratch, and then it is impossible to find people who have experience in this business. But in new technologies there are only a few successful enterprises out of thousands of unsuccessful ones. Of course, miracles happen, but you cannot count on the fact that this miracle will happen to you and that you, as an investor, will find a diamond that others have not noticed.
So you don't count on it at all?
The main thing for a venture investor is to understand people. Because there are many good ideas, but there are only a few entrepreneurs who are ready to bring the idea to commercial implementation and spend their life, talent, energy and soul on it. Many people give up halfway, without realizing it. It is very difficult to say in advance which of the applicants for your money is able to last the last mile - you need to know the psychology and character of each, understand what he breathes, what kind of family he has and what is in his head.
Venture investing is an extremely competitive business. There are several established leaders in this area - large companies that attract most fashion startups. And if the founders reach the third and fourth dozen ventures, this means that they were denied the first two. Still, the venture sector is important - and it would be wrong for us to ignore it. We are now creating a venture fund to gain expertise. So far this is a relatively small amount for us.
Returning to traditional industries. You said that you prefer to grow top people in-house, but how do you find people with relevant knowledge given such a huge industry spread? You have telecom, defense industry, real estate, forestry, agriculture, and retail.
We have been living in this enormous diversity for many years. Therefore, for most of the industries that we have in our portfolio, there is knowledge within the company and there is someone to choose from. In addition, a number of industries are similar to each other in terms of the skill sets of managers. A 100% match is not necessary, but a person who understands retail can also work in mobile retail. A person who knows IT at MTS can do IT at MGTS or even at a bank. Both have CRM and billing systems. We can often confidently use the expertise of people developed in other areas. But sometimes we can’t: for example, we bought a forestry business that we didn’t understand very well, and we were looking for people with experience for it.
But we always place our specialists in positions that require control. We do not hire anyone from outside for the positions of financial director and security director - it is too dangerous in an asset that you do not know completely, to trust management that is also unfamiliar to you.
Are there many foreigners in your company?
Not good. Finding quality managers ready to manage business in Russia is not easy. As a rule, a person who has received a good education and built a career in his homeland will not come here. There are, of course, unique situations when life itself connected someone with Russia: got married, fell in love, soul, etc. But this is rather an exception.
How do you motivate your company's top managers?
We use a system typical for investment companies. We have five different portfolios. The remuneration of their executives depends on the profit that Sistema earns on the investments of their portfolios, with bad investments being subtracted from good ones. That is, if some investments generated income and others - losses, the latter will be deducted from the amount of profit generated. In addition, expenses and the required return are deducted, which we assign each year depending on the cost of our capital.
And minus all this, the team receives a certain percentage of the profit earned. We proceed from actual monetization: it is not calculated on paper that the capitalization has increased by so much, but for example, company X was bought three years ago, and now it has been sold, or brought to an IPO, or attracted an investor. When real money has already arrived from the sale of part of the asset or from the dividends that this asset generated, from the difference between what they bought and what they sold for, the team receives its share. In absolute terms, this can be quite significant.
Are assets divided by industry in the portfolios?
It cannot be said that we have a strict industry principle, but our portfolios do have a direction. For example, one portfolio combines mainly high-tech assets (RTI, BPGC, Sitronics KASU, etc.) and development, while the other includes investments in buildings that provide us with rental income. There is a retail portfolio: Detsky Mir, Concept Group, MEDSI and a number of new projects. Agricultural and forestry assets are also grouped into a separate portfolio. The telecommunications and banking businesses are supervised by separate top managers.
Why have you been acquiring many low-tech companies in recent years?
There is a theoretical explanation, and there is a practical one. From a theoretical point of view, our portfolio strategy describes which industries in Russia will be attractive under different economic scenarios. It also explains how to rebalance a portfolio so that it is partly cyclical and partly countercyclical, because depending on where the economy is going, some companies fall and some rise. We want to put together a portfolio that more or less neutralizes these cycles, so as not to fail along with them.
The fall of the ruble by two and a half times is a “black swan” against which no strategy can withstand. However, despite the events of the last two years and the loss of Bashneft, we have survived well.
Did you invest in these industries after the annexation of Crimea took place, the ruble exchange rate fell and your main shareholder Vladimir Yevtushenkov was arrested?
Yes, we carried out the timber deal in 2014. And several investments were made in agriculture at the end of last year, when the ruble exchange rate was already very low. But our main postulate is that no one is going to curtail the market economy in Russia. And the market always creates business opportunities, and there will be growth somewhere. In the situation with devaluation and so-called import substitution, it has simply become more profitable to produce in the country what was previously more profitable to purchase. If a product can compete in terms of its costs not only within the country, but also in foreign markets, this means an opportunity to develop the corresponding industry.
What kind of return do you expect when purchasing an asset? We want to earn 25-30% and therefore take very high risks every time we buy some new business that is unfamiliar to us. To make fewer mistakes, it was necessary to build a very strict investment process.
Which companies did you acquire specifically because of their export potential? For example, forestry business. We get 70% of our revenue from exports. And in terms of cost, we are first in the world for a number of items: kraft paper, plywood, lumber. And we will maintain this best cost position for many years to come.
Is your plywood production really cheaper than the Chinese?
We make birch plywood, but birch does not grow in China. They make products of much lower quality, by hand, mostly in rural areas - and they produce a lot of them. This kind of plywood is really cheaper than our birch plywood. But there is a clearly defined birch plywood market in the world, and in it we, with our premium quality, occupy an absolutely solid position and sell 100% of what we produce. We do not have enough capacity, and we are now building a new plant in Vyatka, next door to what we have: just last week we approved investments. Because for this product our cost is two times lower than that of European competitors, and 15-20% lower than that of Russian competitors.
You recently sold your stake in Detsky Mir to a Russian-Chinese investment fund. Why?
Yes, we sold a minority stake in RCIF, which is part of the Russian direct investment fund. A total of 23%, based on the company’s valuation of 42 billion rubles. This deal was fully consistent with our strategy because we always wanted to monetize part of our stake in this company. We created significant value there: three years ago it was worth 8 or 9 billion rubles, and when selling the stake we proceeded from a total value of 42 billion rubles.
Are you planning new investments in retail?
We are interested in this sector, but we need to see the economic sense. We have an asset called Concept Group - a manufacturer of women's and children's clothing, it is no longer small, revenue is over 10 billion rubles and growth is about 40% per year. The company pays for itself; we do not give it any guarantees or loans. But it’s quite difficult to enter classic retail like food retail now. There are major players there - Magnit, X5, Lenta and others. Buying a non-controlling stake is of little interest, because our added value will be zero, and the controlling stake will be put up for sale only if a crisis situation arises and someone cannot withstand the competition. Then we will be able to enter the capital and bring our management team. But simply “killing with money”, buying a controlling stake and trying to make money on it, as a rule, does not work, because you have already overpaid in the first place.
Do you always prefer to acquire a controlling interest?
Yes. But we can enter with a smaller share - as in the case of Concept Group, where we are not an operating partner, but a financial partner. That is, if we come across an asset that the shareholders are successfully developing, we are ready to be satisfied with a smaller package. According to our investment mandate, we cannot invest in greenfields, because their risks are uncontrollable. We invest in businesses with existing cash flow - usually positive and with a certain level of EBITDA. The business model should already be proven.
What role does the in-house bank play in an investment company?
We have it historically, from the times when all corporations included banks. For an investment company, a bank is always a question, because high profits cannot be extracted from it. In addition, there are high risks in this area. According to Central Bank standards, leverage - the ratio of capital and credit - is now 1:10. Roughly speaking, for a ruble of capital you can issue 10 rubles of credit. But if you lose five of these 10 rubles, then your capital will dissolve and you will have to report four more rubles.
We decided to make retail, primarily mobile, the bank's specialization, in order to provide MTS clients with additional banking services in MTS stores - there are more than 5 thousand of them in the country.
Due to the synergy with MTS, this bank does not have a large burden of operating costs. To score creditworthiness, the bank can use information about the payment discipline of MTS clients - of course, within the framework of the law on personal data. Thus, the bank becomes more efficient in the retail lending market. And in the corporate lending market, being part of the group, the bank can lend to our companies. In addition, using Sistema's connections, the bank finds high-quality corporate clients.
But you don't sell it?
MTS Bank is developing, it now has energetic management. But it is very difficult to sell the bank now. Banks are sold for 0.5–0.6 equity capital. It’s better that we develop it.
You said the profit margin is 25%, but each industry has its own ceiling.
This is like the average temperature in a hospital. Let's say the average profitability in the forestry industry is 10%. But some companies lose money, while others make a lot. Agriculture, for example, in Russia has never been attractive for investment. But the devaluation of the ruble and the policy of import substitution have made domestic agribusiness very attractive, at least for some industries. For example, milk production, growing apples, tomatoes and cucumbers. We recently bought the largest farm in Russia - the Yuzhny agricultural complex in Karachay-Cherkessia. There the margin is definitely higher than 25% - if it is managed effectively.
What fundamentally determines the attractiveness of assets?
Now Russia has the lowest prices for electricity and gas in the world - if you count in dollars. Our gas now costs $50 per thousand cubic meters, and before the devaluation it was $130. In America at that time it cost $80-90. That is, before the devaluation, gas, and therefore electricity, was cheaper in America, but now, on the contrary, in Russia. Therefore, previously there was no point in setting up energy-intensive production in Russia - in America it was obviously cheaper, not to mention the fact that the financial market there is developed and the legal system works reliably.
How quickly does AFK increase the profitability of the acquired asset?
In six months or maximum a year. But there are two types of assets: one is enterprises in an established industry that have problems - the whole question is which ones. If the management manages it wrong or purchases from the wrong place, then we can deal with it quickly, but if the enterprise is simply located in the wrong place, it’s unlikely. Investment analysis consists precisely in understanding where the shortcomings are structural and where they are managerial. To invest in an asset, you need to be sure that it will be cost competitive. But there is no point in taking and rebuilding everything again.
Another type of asset is growth, in an existing or new industry. There, cost is not so important, but the main thing is capturing market share and growth rates. An example is our Concept Group. Essentially this is a venture business. But there are relatively few such fast-growing companies that you can successfully enter into. If an entrepreneur successfully develops his business, he needs to pay two, three or four prices for entry and at the same time be sure that in the end the price will be even higher. Therefore, assets of the first type predominate in AFK Sistema, and we restructure and improve them.
How long does it take Sistema to make an investment decision? Do you have an investment committee, procedures and, probably, the path from proposal to transaction is very long?
A good deal takes at least six months. More like a year. That is, six months to a year are spent on the whole process.
Science says that people make decisions very quickly and emotionally. In a split second, we decide something within ourselves, and this is dictated by previous experience, prejudices and subjective factors. The mood at the moment, whether you liked a person or not. And then, under “like,” rational arguments are added in defense of why this particular decision is correct. In the investment process, the main thing is to drive this flow of emotions into a framework. So that even the most beloved and liked investment fits into the Procrustean bed of clear criteria and goes through the “devil’s advocate” system of checks and opposition. The investment committee must be presented not only with arguments for, but also with specially thought-out arguments against.
Are these arguments made by different people?
Yes. As a rule, the project is proposed by a portfolio manager. He found this deal, he likes it, he is ready to take the risk and buy. Naturally, he will not oppose himself, because he believes in his deal. So other people - from the financial complex and the strategy complex - are tasked with sorting it all out. An alternative case is built, a specific opponent is appointed, who has the opportunity to communicate with the management of the asset we are discussing, calculate the strategy, understand the industry, invite experts and hire consultants, if necessary, and review due diligence materials.
Does it happen that a major shareholder does not approve a deal that the investment committee has recommended?
I don't remember such a case. But it happened the other way around: the main shareholder Vladimir Yevtushenkov really liked some asset, and he wanted to invest money there, but the management said: no, this is wrong. And here very heated debates arose. But the shareholder himself built the investment committee as a system of checks and balances.
You previously worked at McKinsey. Was it easier there?
These areas cannot even be compared. A consulting firm that is owned by partners is one thing. There is no single leader or vertical management, all decisions are made collectively, everything is clear in a career. In terms of predictability, working in a consulting firm is comfortable. It's intense, but understandable. In an investment company, you deal with money and make specific decisions about investing it. Wrong decisions are immediately visible, and you can very clearly determine in numbers who is worth what. Everything here is based on numbers. Either you make money or you lose.
Have you ever made any serious mistakes while investing?
For us, the most difficult investment case was going to Indian telecom. We counted on a huge market: India's population exceeds a billion and more than half are still not covered by mobile services. The penetration rate is very low. But we - and not only us, but also other players - came across a number of local customs and legal restrictions. We are now preparing a deal with the Indian operator Reliance and see light at the end of the tunnel. But this is an example of how, when you step outside your comfort zone, you find too much discomfort.
Do you feel comfortable working here?
Not very much, but not as difficult as there. It's never comfortable anywhere. If you want comfort, don't do business. There is no country where you can work without risk. You can blame circumstances, talk about an unfriendly environment, but entrepreneurial and managerial risk is like a cross that you carry always and everywhere.
(3)President of AFK Sistema, former president of Mobile Telesystems OJSC (MTS), former vice president for sales and subscriber services of MTS OJSC
"Biography"
Mikhail Shamolin was born in 1970 in Moscow.
Education
In 1992 he graduated from the Moscow Automobile and Highway Institute.
In 1993, he received a second higher education at the Russian Academy of Public Administration under the President of the Russian Federation.
In 1996-1997, he completed a training program for senior managers at the Wharton Business School in the field of finance and management.
Activity
1993–1996 - Financial Director of the Academy of Management and Market
"Themes"
"Ratings"
"News"
Yevtushenkov spoke about the resignation of the head of AFK Sistema
The President of AFK Sistema leaves his position in the company and moves to another job. The new head of the company will be the President of MTS
Alexey Kornya was appointed as the new president of MTS
Alexey Kornya will become the new president of MTS PJSC from March 13, follows from the company’s message received by RBC. Previously, Kornya held the position of MTS Vice President for Finance, Investments, Mergers and Acquisitions.
Andrey Dubovskov, who served as president of MTS since March 2011, filed an application for early termination of his powers.
On March 1, the Nomination, Remuneration and Corporate Governance Committee of Sistema JSFC nominated him to the position of president of the corporation, according to the Sistema JSFC website. It is expected that the current president of AFK Sistema, Mikhail Shamolin, will move to another position within the group.
The Board of Directors of AFK Sistema will consider the issue of appointing a new president of the corporation on March 2.
Earlier, the main owner of the company, Vladimir Yevtushenkov, told RBC about Shamolin’s resignation from the post of president of AFK Sistema. He also named Dubovskov as the main contender for his post. Sources from RBC and Interfax previously said that Kornya could become the new president of MTS.
Shares of MTS, Medsi and BPGC belonging to AFK Sistema were arrested
AFK Sistema reported that it received from the Office of the Federal Bailiff Service for Moscow a resolution to initiate enforcement proceedings and a copy of the writ of execution of the Arbitration Court of Bashkiria. The writ of execution seizes 31.76% of shares in the authorized capital of MTS PJSC, 100% of shares in the authorized capital of Medsi Group of Companies JSC and 90.47% of shares in the authorized capital of JSC owned by AFK and Sistema-invest JSC "BESK".
Mikhail Shamolin - RBC: “We cannot make conceptual claims”
The seizure of the assets of AFK Sistema, including the main generator of the holding's money - MTS, thundered like thunder from the sky. The first interview with the head of AFK Mikhail Shamolin since then
The net profit of AFK Sistema grew 12.5 times in the third quarter - up to 6 billion rubles
President of AFK Sistema Mikhail Shamolin noted that the largest asset of the MTS holding, despite high competition and pressure from macroeconomic factors, maintained its market share and demonstrated “decent results.”
“MTS is perfectly positioned for further development in the face of weakening competition in the telecommunications market and the recovery of the macroeconomics in Russia. At the same time, the company maintains its focus on ensuring shareholder returns. During the year, MTS paid out 52 billion rubles. in the form of dividends, and in the fourth quarter announced the repurchase of its own shares in the amount of up to 10 billion rubles,” Shamolin said.
The ranking of the highest paid top managers in Russia is headed by Miller and Sechin
The third in the ranking is the President of the Management Board of Sberbank German Gref with $11 million. He is followed by the General Director of the Onexim Group Dmitry Razumov with $10 million, the General Director of USM Advisors Alisher Usmanov Ivan Streshinsky with $10 million, the General Director of UC Rusal Vladislav Solovyov with $7.4 million, President of AFK Sistema Mikhail Shamolin with $7.4 million, President of the Board of Directors of VTB 24 Mikhail Zadornov with $6.5 million, Chairman of the Board of Gazprombank Andrey Akimov with $6.3 million. Rounding out the top ten of the Board of Directors is General Director of Otkritie Holding OJSC Ruben Aganbegyan with $6 million.
President of AFK Sistema Mikhail Shamolin on the business of the investment company: “As long as all the horses are in the race”
“Oil of Russia”, 11/25/16, Moscow, 10:52 The former owner of Bashneft, AFK Sistema, may consider employment options for oil company employees who were laid off with the arrival of the new owner, Rosneft. At the same time, Sistema does not agree with the position of the head of Rosneft, Igor Sechin, who stated that oil service assets were transferred from Bashneft at a reduced cost. The transaction was carried out at the market price, the president of AFK Sistema, MIKHAIL SHAMOLIN, told Kommersant in an interview.
Sistema bought its own shares for 7.6 billion rubles.
OJSC AFK Sistema announced today that its 100 percent subsidiary OJSC Sistema Finance July 11, 2014. signed an agreement with an unaffiliated seller to purchase 162 million 837 thousand 500 ordinary shares of AFK Sistema, representing 1.7% of its authorized capital, for approximately 7.6 billion rubles
A subsidiary of AFK Sistema bought a 1.7% stake in the parent company for 7.6 billion rubles.
Sistema-Finance (100% subsidiary of AFK Sistema) is acquiring 162 million 837.5 thousand shares (1.7%) of the parent company for 7.6 billion rubles, the AFK said in a statement.
A controlling stake in Bashneft was arrested in the case of an Armenian oligarch
The Basmanny Court of Moscow, at the request of the Investigative Committee, arrested the controlling stake in Bashneft owned by AFK Sistema. The investigation has nothing to do with AFK, but the investigation suspects businessman Levon Hayrapetyan, who could have participated in the sale of the oil company to Sistema in 2008, of fraud. Bashneft's SPO in London, scheduled for September, will most likely have to be postponed, experts warn.
Sistema fell by almost $1 billion after the arrest of Bashneft shares
Shares of AFK Sistema on the Moscow Exchange fell by 7.42% or 32.266 billion rubles. (at 14.00 Moscow time). By this time, the company's receipts on the London Stock Exchange had lost 3.61% or $285 million.
British politician Peter Mandelson became a shareholder of AFK Sistema
Former European Commissioner for Trade and British Minister Peter Mandelson became a shareholder of AFK Sistema. Together with the rest of the board of directors of AFK, he received about 0.0008% of the company’s shares, her statement says.
Moody's assigned MTS a higher rating than Sistema
The European Commission approved the creation of a joint venture between AFK Sistema and Fresenuis Kabi
The European Commission approved the creation of a joint venture between AFK Sistema and the German Fresenuis Kabi, Bloomberg reported. At the end of April, AFK Sistema announced its intention to transfer 100% of Binnopharm to a joint venture with the German Fresenuis Kabi.
The increase in Sistema's share in its Indian subsidiary may be postponed
The court of the Indian city of Jaipur ruled that until its next hearing the status quo must be maintained in relations between the Indian subsidiary of AFK Sistema Shyam Telecervices ltd (SSTL) and its minority shareholders, follows from the court decision dated May 30, 2014.
Net profit of AFK Sistema in the first quarter of 2014. according to US GAAP grew by 3.5%
06/03/2014, Moscow 12:08:23 Net profit of Sistema JSFC in the first quarter of 2014. according to unaudited consolidated financial results prepared in accordance with US GAAP standards, increased by 19% in rubles and by 3.5% in US dollars compared to the same period in 2013. and amounted to $363.3 million. This is stated in the company’s message.
Mikhail Shamolin - RBC: “The US Attorney’s Office believes that its jurisdiction is the whole world”
Bloomberg analysts noted that Western sanctions could have a positive impact on Russian high-tech business, in particular, they would be beneficial to the companies of AFK Sistema and its Mikron plant, which produces microcircuits. President of AFK Sistema Mikhail Shamolin said that so far Sistema has not received any bonuses and the corporation will be able to take a place in the global IT market only with state support.
MTS changes directors
President of AFK Sistema Mikhail Shamolin and two of the three independent directors are leaving the board of directors
Sistema is trading for wagons
AFK is not giving up attempts to acquire a blocking stake in the First Freight Company and has offered Russian Railways to pay more for the stake than the winning bidder - NTK Vladimir Lisin; Russian Railways rejected the offer
AFK Sistema confirmed problems with the MTS subsidiary in Uzbekistan
President of AFK Sistema Mikhail Shamolin admits that there are problems with the MTS subsidiary in Uzbekistan. “Certain problems began there. I would not like to comment while we are figuring out what is happening there now, the situation is not completely clear,” Shamolin said on the sidelines of SPIEF 2012. “I think everything will become clearer by the end of the week.” He noted that the company is operating normally. “Of course, there is leadership there, they manage. The company operates as usual,” said the head of AFK Sistema.
Executive salary rating - 2011
Experts also explained the generosity of the main owner of AFK Sistema, Vladimir Yevtushenkov, by successful partnerships with government agencies, in particular with Rusnano: the holding’s top managers took third and fifth places in the list of the most expensive transitions in 2011. Former MTS President Mikhail Shamolin became the President of AFK Sistema (estimated annual compensation - $10 million), and former General Director of MTS Ukraine Andrey Dubovskov ($5 million) was appointed in his place
Mikhail Shamolin elected president of AFK Sistema
The board of directors of AFK Sistema elected the former head of Mobile TeleSystems OJSC (MTS) Mikhail Shamolin as president of the corporation. As the corporation's press service told RBC, this decision was made at today's meeting. Yesterday, the MTS board of directors decided to early terminate the powers of Mikhail Shamolin as president of the company. Andrey Dubovskov, who previously served as head of the MTS Ukraine business unit, was elected as the new president of MTS on March 5, 2011. After the appointment of Andrey Dubovskov, the duties of director of MTS Ukraine will be temporarily performed by the marketing director of the Ukrainian division of the company Vasil Latsanich. At the same time, tomorrow the board of directors of AFK Sistema will consider the candidacy of the “dismissed” Shamolin for the post of president of the company.
The board of directors of AFK Sistema elected the former head of Mobile TeleSystems OJSC (MTS) Mikhail Shamolin as president of the corporation. As the corporation's press service reported, this decision was made at today's meeting. Until this moment, AFK was headed by Leonid Melamed, who will continue to work in the corporation as a member of the board of directors of AFK and chairman of the board of directors of NK RussNeft. The day before, the MTS board of directors terminated the powers of the company’s president Shamolin ahead of schedule, appointing Andrey Dubovskov, head of the MTS Ukraine business unit, to this position.
Mikhail Shamolin: “Many industries will depend on mobile networks”
In the near future, MTS will complete the purchase of 100% of the shares of Comstar, after which it will gain full right to call itself an operator of both mobile and fixed communications at the same time. MTS President Mikhail Shamolin does not rule out that there will be new purchases of wireline operators. But the mobile communications industry still promises more events. At the end of last year, Megafon began to breathe in the back of MTS, promising to soon overtake the leader and take first place in Russia in terms of income. And at the end of this year, the state may put fourth generation (4G) mobile communications licenses up for competition.
Mikhail Shamolin had an accident
A helicopter carrying Mikhail Shamolin, vice president of Mobile Telesystems, crashed in the south of the Moscow region. The top manager was hospitalized with broken ribs and a concussion. The helicopter crashed in the Kashira district of the Moscow region - on the 105-106th kilometers of the Kashirskoe highway. The pilot died. A helicopter carrying Mikhail Shamolin, vice-president of Mobile Telesystems, crashed in the Moscow region. The top manager was injured. He was taken to the Kashira city hospital. From there the victim was transported to one of the Moscow clinics.
This is a huge unplowed field
Why do Russians not save on mobile phone calls during a crisis, but MTS is still preparing to cut costs, said company president Mikhail Shamolin. This year is a turning point for the mobile communications market: operators are entering the adjacent markets of fixed-line communications and cellular retail. The Mobile Telesystems company, according to its president Mikhail Shamolin, is in no hurry to purchase new assets, but is concluding alliances.
— Did MTS feel the impact of the crisis?
— So far we have not felt a decrease in conversational activity [of subscribers] or a reduction in payments. Mobile communications have already firmly entered the basic consumer basket, and people will begin to abandon it only if their budget becomes really bad. We do not rule out the possibility of a reduction in consumption in the future if macroeconomic indicators in Russia worsen: if oil prices fall below $50 per barrel, remain at this level for a long time, there will not be enough government reserves, a sharp devaluation of the ruble begins, the volume of layoffs exceeds sensitive thresholds, etc. etc. But we hope that in practice such a scenario will not be realized. Of course, we will monitor the ratio of national currencies to the dollar and try to neutralize as much as possible the possible negative effect on revenue with a more flexible tariff policy and increasing the efficiency of the company’s operating activities as a whole.
MTS will invest more than 7 billion rubles in the development of technological infrastructure in St. Petersburg in 2008-2010.
OJSC Mobile TeleSystems (MTS) and the government of St. Petersburg today, June 6, signed a memorandum of understanding and cooperation. As a REGNUM correspondent reports, within the framework of the agreement, MTS will take part in a number of projects for the social development of St. Petersburg, including the targeted programs of the national project “Education”, the territorial employment program and the program for the development of innovations in St. Petersburg. According to MTS President Mikhail Shamolin, only in 2008-2010. the company plans to invest more than 7 billion rubles in the development of the region’s technological infrastructure. In particular, the funds will be used for the development of the third generation (3G) network and the construction of a fiber-optic transport communication network. Shamolin recalled that St. Petersburg became the first city in Russia where MTS deployed a 3G network. By the end of 2008, the company plans to completely cover the city with a 3G network, and then expand to the Leningrad region.
Cell phone fraud.
Hello, Mikhail! I heard that scammers have taken a fancy to cellular communications. No one has called me yet, but friends have complained. They say they receive an SMS asking you to buy a payment card, and in this case you receive a prize. So, operators cannot take action and track who is deceiving the people? Sincerely, Igor Korobov.
Mikhail Shamolin became the President of MTS
Mikhail Shamolin replaced Leonid Melamed as head of the company, who was appointed to the post of president of AFK Sistema, the largest shareholder of MTS OJSC. As noted, under the leadership of Melamed, at the end of 2007, MTS, for the first time among Russian companies, entered the top hundred of the most influential global brands. The new president, Mikhail Shamolin, said that he hopes to justify the trust and adequately represent MTS to clients, shareholders and employees. Mikhail Shamolin was invited to MTS in July 2005 to the post of vice president for sales and subscriber services. On August 15, 2006, he was transferred to the position of vice president, director of the MTS Russia business unit.
“Many industries will depend on mobile networks,” Mikhail Shamolin, President of Mobile Telesystems OJSC
In the near future, MTS will complete the purchase of 100% of the shares of Comstar, after which it will gain full right to call itself an operator of both mobile and fixed communications at the same time. MTS President Mikhail Shamolin does not rule out that there will be new purchases of wireline operators. But the mobile communications industry still promises more events. At the end of last year, Megafon began to breathe in the back of MTS, promising to soon overtake the leader and take first place in Russia in terms of income. And at the end of this year, the state may put fourth generation (4G) mobile communications licenses up for competition.
— Recently, Megafon has clearly increased its growth rate. In the third quarter of 2010, it already surpassed VimpelCom in terms of revenue from mobile communications in Russia, and now it promises to catch up with your company.
MTS President Mikhail Shamolin: “About 25% of MTS subscribers are mobile Internet users”
According to the head of MTS, now about 25% of the MTS subscriber base can be considered real Internet users, and the company plans to increase this figure to at least 50-60% in the next two to three years. Answering a question from Vedomosti about MTS’s income from SIM cards for USB modems, Mikhail Shamolin noted the following: “According to them, the ARPU is about $10. It remains this way from the very beginning, since basically these SIM cards have “flat” tariffs and there are certain restrictions - on speed, on use. 80% of Internet traffic is generated by 5% of the subscriber base - the most active users who download gigabytes of video from the Internet, etc. And the average user does not generate much [traffic]. According to Mikhail Shamolin, for MTS “what is important now is not raising prices, but selling additional services and creating additional value for the product. First of all, this is, of course, mobile data transmission, and for this we need to increase the penetration of smartphones and work to reduce their prices. The customer experience of owners of a smartphone and a regular phone are radically different, and over the next three years we want the smartphone to completely displace regular phones from the market. For example, this year we will launch a smartphone on the Google Android platform with a target price of around $100 in order to really make this product mass.”
