Ukrainian President Volodymyr Zelensky received a cool reception from business leaders at the World Economic Forum in Davos.
AFP via Getty Images
Volodymyr Zelensky is used to getting his way when it comes to money. Look at the untold billions that American taxpayers have given his country to defeat Russian aggression.
Obtaining funds from the private sector was much less easy. Consider the lukewarm reception he received from bankers last week at the World Economic Forum in Davos, Switzerland. It spoke volumes about the enormous challenge Zelensky faces, not only to overcome Vladimir Putin's hordes, but also to repair the damage they have done to his economy.
To be sure, the World Economic Forum is an annual chat meeting between Wall Street elites and globalization's financiers who talk about issues of importance even if they don't seem to get anything done at all. This year's event at least promised to deliver something tangible because Zelensky will be in the room with some of the most powerful bankers in the world and he really needs their money.
Wall Street has shown great interest in investing in Ukraine. The banker class (like the rest of us) admires the country's resilience. The financial community also appreciates the geopolitical urgency to prevent Vladimir Putin from reestablishing the old Soviet Union at the expense of the Ukrainian people.
They liked Zelensky's presentation in Davos: despite ongoing hostilities, inflation in his country fell to below 6% from 30%; The economy is growing. It is planned to open Kiev's vital airport in the coming months. He explained that the western part of the country is very safe from bombing.
Led by the JP Morgan and Jamie Dimon team of Mary Erdos and Vince La Padulla, the investment fund is ready and waiting to be formed. As this column noted, JPMorgan has held a series of private meetings with potential investors because the country represents an amazing investment opportunity in many ways. Ukrainians are educated and productive when bombs are not targeting their homes and businesses.
Senior bankers such as JP Morgan's Dimon, Bridgewater Associates' Ray Dalio, Carlyle Group's David Rubinstein and Blackstone's Steve Schwarzman, as well as a representative from Larry Fink's BlackRock asset management empire, acted as if they were ready to make a deal first in front of the cameras. Then in front of Zelensky himself during a private meeting where they discussed how to repair infrastructure and build a technology and manufacturing economy.
However, I was told that Zelensky came away empty-handed. No firm commitment was made last week by the people running the world's largest investment houses.
There was a bit of good news for Zelensky after his exit from Davos: Robert Kraft, yes, Robert Kraft, the billionaire owner of the New England Patriots, has been part of JPMorgan-led discussions about rebuilding Ukraine over the past year or so, and now he He is seriously considering building factories in Ukraine.
Before Robert became synonymous with a team that regularly (until recently) won Super Bowls, he was big in the paper manufacturing business. He, his son and business partner Jonathan (who runs the Kraft Group holding company of the same name) are eyeing sites in the war-torn western part of Ukraine, and may decide to move forward with building a factory or two, sources tell The Washington Post. Later this year.
A Kraft Group spokesperson says the company “has had preliminary discussions about the possibility of doing something in the future but nothing is imminent.”
Kraft's looming investment is estimated at about $100 million. That's a good thing, but it's small compared to the private investment needed to create jobs and economic growth, and the amount Wall Street could raise under the right conditions.
And money is waiting, which is a good sign. My banking sources say that Zelensky has convinced major investors that he is working to root out corruption, which represents a major obstacle to any significant capital increase. They also like what they hear about its economic recovery.
It is the war that prevents Wall Street from fully opening its portfolio. The problem is simply that investors know there is no return on capital for tech startups that bombed.
During the closed-door talks, first reported on Fox Business, Zelensky may have made his predicament worse. He has not indicated a willingness to hold peace talks with Putin, the man he recently called “Hitler.”
This means that funds for any significant amount are not going to happen anytime soon. I'm sure Damon told Zelensky that. The JPM party chief must also have told Zelensky that Ukraine will have access to billions of dollars from private equity, institutional investors and wealthy Americans the moment the bullets stop flying, but not a second earlier.
Manchin at the rally
Last week, at the home of public relations director Robert Dilenschneider, powerful West Virginia Sen. Joe Manchin, a longtime political moderate, explained to a group of potential donors why he can't stand the divisiveness of Donald Trump and the weakness of Joe Biden, and why he can't… To endure the division suffered by Donald Trump and the weakness of Joe Biden, and why else? A candidate is needed to run for the White House because the future of the country is at stake.
Manchin did not explicitly mention that he was running for president as an independent on the so-called “No Labels” ticket, the nonpartisan organization he has been working with for the past few years.
But there's no other reason to be in Darien, Connecticut on a cold winter night unless you're jogging, so keep an eye out.
“Unapologetic tv specialist. Hardcore zombie trailblazer. Infuriatingly humble problem solver.”