The Extravagant Ways Billionaire Oligarch Roman Abramovich Spends His Money

By on November 14, 2018 in ArticlesBillionaire News

Russian billionaire Roman Abramovich is pretty well known for his collection of super yachts, private jets, lavish homes, luxury cars, and the Chelsea football club. In fact, the Wall Street Journal once called his collection of material possessions "The Roman Empire." Touché. Once upon a time he was the richest man in Russia, but these days he has to just deal with the $10 billion fortune he has and all the ways in which he can spend it.

One of his major purchases was, of course, the Chelsea Football Club. He acquired the soccer team in 2003 from long-time owner Ken Bates for $105 million. Chelsea is one of the most valuable soccer clubs in the world. In September, reports surfaced that Abramovich was looking to sell Chelsea. Reportedly, he is not happy about selling the team, but he feels backed into a corner. Abramovich is restructuring his most valuable assets to shield them from potential sanctions from the United States.

The majority of Abramovich's wealth comes from the sale of Russian state-owned assets after the fall of the Soviet Union. Just before the Soviet Union began to fail, Abramovich used $2000 of his life savings to begin smuggling black market goods and other contraband into Russia. He soon expanded, dealing in everything from plastic toys to automobile parts. At one point, during the height of perestroika Roman even sold imported rubber duckies right from his apartment in Moscow.

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In 1988, Russia's political climate under Mikhail Gorbachev allowed Abramovich to legitimize his black market smuggling business. He took the money he'd made and set up a company that manufactured dolls, toys and furniture. Abramovich would go on to set up and liquidated at least 20 companies during the early 1990s, in industries ranging as wide and diverse as pig farming to bodyguard recruitment.

Roman's big break came in the mid-90s when he became friends with a powerful Russian businessman named Boris Berezovsky. Berezovsky introduced him to the inner circle of President Boris Yeltsin. Together, the two acquired the controlling interest in Russia's fifth largest oil company Sibneft. Abramovich and Berezovsky each came up with $100 million to purchase a controlling interest in the company. This $200 million investment was well below the company's stock market value at the time, and some bribery was likely involved. The duo rapidly increased Sibneft's oil production and soon the company was earning profits in the billions. Abramovich later admitted in court that he paid billions of dollars in bribes to government officials on behalf of the company and obtained protection from the Russian Mafia to secure the purchase of these and many other assets. Abramovich went on to acquire a full 70% of Sibneft, 50% of the Russian aluminum oil monopoly Rusal, and 36% of Aeroflot, Russia's national airline, exhibiting a clear and utter ruthlessness in every business dealing. When Sibneft was bought out by a rival Russian oil firm, Abramovich reportedly earned $10 billion in cash for his 70% stake. Incredibly, today the majority of Abramovich's wealth still sits in cash or other extremely liquid asset classes.

Today, Roman owns the biggest share of Evraz, Russia's second largest steel manufacturer. He also owns a stake in the world's largest nickel producer, Norlisk Nickel.

Abramovich has been married three times and has seven children. In 2017, he separated from his third wife, Dasha Zhukova with whom he has two children. They were married for 10 years and co-founded both the Garage Museum of Contemporary Art in Moscow and the New Holland Island cultural Centre in Saint Petersburg. Their divorce is expected to be one of the most expensive in history thanks to mega-mansions, their art collection, and their joint businesses in Russia.

He was married to Irina Malandina for 16 years. They have five children together. When they married in 1991, Abramovich was not yet a billionaire. By the time they divorced in 2007, he was worth more than $18 billion. Malandina walked away with $300 million.

Their divorce could be one of the most expensive splits in history, thanks to their joint businesses in Russia, an extensive art collection, a mega-mansion on the Upper East Side, and other shared assets.

Abramovich's first marriage was to Olga Yurevna Lysova. They were married from 1987 to 1990.

In Russia, when you are a powerful oligarch, it is pretty much customary that you get involved in politics. And Abramovich is no exception. He was the governor of Chuktoka from 2000 to 2008 and during his tenure, is has been estimated that he spent over $250 million of his own money on improvement projects for the region. Under Abramovich, living standards improved, schools and housing were restored, and new businesses opened due to investors being newly drawn to the region.

Abramovich owns homes all over the world, including a nearly $120 million home on London's "Billionaires Row" in Kensington Palace Gardens.

In New York City, Abramovich is planning to combine three historic townhouses on East 75th Street on the Upper East Side into one 31,500 square foot home. He began buying the townhouses on 75th Street between Fifth Avenue and Madison Avenue in 2014. It is thought that the cost of renovating the townhomes could reach $100 million. Abramovich has already paid a combined $90 million for the structures. In September, Abramovich transferred the deeds to the properties at 9, 11, and 13 East 75th Street to his ex-wife Dasha Zhukova for $74 million. A fourth townhouse at 15 East 75th Street was also transferred to Zhukova for $16.5 million. That townhouse was originally slated to be a part of the renovation for the mega mansion but is no longer a part of the plan. The transfer of the properties is thought to be due to pending sanctions against him by the U.S. Government.

In May 2018, Abramovich was granted Israeli citizenship and may be planning to move to Tel Aviv. He had sought U.K. citizenship originally, but was turned down by that country.

Abramovich also owns a luxury home on the French Riviera. He bought Chateau de la Croe in 2001. The estate overlooks the Mediterranean Sea.  He spent $40 million renovating the home. He also has a $90 million estate on St. Bart's in the Caribbean.

Abramovich has reportedly spent hundreds of millions of dollars on yachts in his lifetime. He bought the Pelorus in 2004, when it was the 11th largest yacht in the world. Abramovich's ex-wife Malandina acquired the yacht in the divorce, and later sold it to American business magnate and film producer David Geffen for US $300 million. Abramovich later spent nearly US $500 million on a mega yacht called Eclipse. At 533 feet long, the Eclipse requires a staff  of 70 to operate it and cater to guests. Abramovich has reportedly owned at least three other yachts in his lifetime.

Abramovich also has a heck of a car collection. He owns more than $11 million of luxury vehicles, including the Ferrari FXX. The FXX can reach speeds of more than 190mph. Only 29 of these cars were produced. He also owns one of the 15 Pagani Zonda Roadsters, A Bugatti Veyron, and a Mercedes-Benz AMG GT3.

Abramovich, like any self respecting billionaire, does not fly commercial. He has a fleet of airplanes, including a Boeing 767-33AER with a customized interior that includes a banquet hall that seats up to 30 people, a kitchen, bedroom, and office.

Suffice it to say, it isn't bad being a billionaire oligarch!