Press Clippings

20 April 2004Leaders of The New Europe: Mikhail Fridman Alfa Group, Financial  Times

Business stars chart a course for the profits of the future
by Brian Groom
The 25 executives — selected by FT to mark the 25th anniversary of its European expansion — will shape the way business is done across the continent.

On the performance of these young executives — and others of their generation — depends Europe’s commercial future. They will help to determine whether the old continent can prove its critics wrong and find a new streak of innovation, or whether it will sink into relative decline compared with the US and the tiger economies of Asia.

To mark the 25th anniversary of the launch of our European expansion, the Financial Times has picked out 25 worth watching from the new wave of business leaders across the continent. They are a cross-section who, taken together, are likely to have an impact on the way European capitalism evolves.

They will help to decide, for example, how far European business methods continue to be Americanised. Their actions will determine issues ranging from the health of the owner-manager model to whether Europe has a future in manufacturing. They will shape its openness to capital markets and the transparency of its corporate governance.

Typically in their mid-30s to mid-40s, this group has been chosen for its ability to shape the way business is done. Some have already reached the top and are making a difference; some are on their way there, creating expectations as they go; others are entrepreneurs. The group is not exclusive, but all are achievers.

Of our sample, five — Edouard Michelin, James Murdoch, Cristina Stenbeck, Ernesto Bertarelli and Ana Patricia Botín — have inherited or are rising through their family business empires. We could have cho sen more. Family ownership remains a big part of Europe’s corporate scene and it has been thriving.

Studies show that companies with a dominant family shareholder have outperformed non-family stocks on Europe’s main markets over the past decade. Parmalat aside, family controlled companies have been notable for their steady balance sheet management, for preferring long-term strategies over daily share price performance and for focusing on cash flow over accounting earnings.

Whether they sustain their lead depends on the imagination of these sons and daughters and their peers in other family businesses. Even the most conservative can be quietly radical: look at how Mr Michelin is opening up the secretive tyre maker to new relationships with competitors and component manufacturers.

Others are challenging traditional practices. Dennis Hennequin started as a McDonald’s restaurant manager and is now teaching his US bosses a lesson in modernising menus. Anne Lauvergeon is resisting France’s dirigiste impulses in the form of pressure for her nuclear group to rescue the stricken Alstom. Leszek Czarnecki introduced leasing to Poland and is trying to repeat the trick in Russia.

This group faces big challenges, not least more aggressive questioning by shareholders. Whether they are up to it, the coming years will tell.

Mikhail Fridman Alfa Group
by Arkady Ostrovsky
There are no tough or sharp features in the appearance of Mikhail Fridman, 40, one of Russia’s richest and most powerful businessmen.

A stocky man with gentle manner and a pudgy face, he could be mistaken for a jolly baker in a market town. In fact he is one of the country’s smartest and toughest oligarchs, and is chairman of Alfa Group, a powerful financial and industrial empire.

His appearance is not the only thing that marks him out. Brought up in a traditional Jewish family in western Ukraine, far from the corridors of Moscow power, he used his brain and his ability to adapt to changing circumstances to rise to the top of Russia’s business elite.

With some of his peers now in exile and others in jail, he has adjusted better than many to the regime of Vladimir Putin. Last year Mr Fridman pulled off one of the most spectacular transactions in Russia’s corporate history. Alfa group and its partners sold half of their TNK oil company to BP for $6.75bn (£3.75bn), the biggest investment in Russia ever by a foreign company.

The deal was a double achievement for Mr Fridman: not only had he managed to sell his oil asset to a foreign company just as Russia started to get more protective of its natural resources, but he had also managed to sell it to his former sworn enemy.

But there are challenges ahead for Mr Fridman. Making the BP-TNK partnership work is one. Staying out of trouble with Russia’s president is another. He will need all his business and political skills to remain one of Russia’s top businessmen.

The complete version of this article is available at Financial Times website: www.ft.com.

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