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CEO of the investment company

Concorde Capital


June 2016

10:03 AM

We enjoy the crisis now

Igor Mazepa, Director General of Concorde Capital Investment Company:


Igor Mazepa, Director General of Concorde Capital Investment Company is a well-known figure in the Ukrainian financial market. First, Mr. Mazepa is the founder and owner of one of the largest investment companies of Ukraine, which processed the number of stellar transactions: Galnaftogaz, First Private Brewery, Milkiland, TMM, Darnytsa, UMH, etc.

Second, he is considered the main recruiter in the Cabinet: the media tagged him “the HR advisor of Boris Lozhkin” in view of his recommendations on applicants for senior positions (GFS, Ukrspirt, National Energy and Utilities Regulatory Commission…), he gave to the past government.


Third, the name of Igor Mazepa pops up from time to time in conjunction with high-profile scams. Of the latter, – charges of cashing in the temporarily occupied territories of funds through a network of terminals owned by Concorde Capital.


However, Mr. Mazepa does not show that rumors hurt him too much, when answering to hard questions. The dogs bark, but the caravans move on.


It’s another matter what is going on in the state. He is ready to discuss this theme in more details.  The influential investment banker is skeptical about the privatization of 2016 and the current government. And more and more is focused on his business, for which the crisis, he says, brings more possibilities than any kind of troubles.


– You have experienced many crises. Which one affected your business and you personally the most?

– The main criterion is a lesson earned. The most eye-opening for me was the crisis of 2008, although the first lessons I took in 1998. It was a time when you misperceived the world, lived in some illusions that collapsed in an instant.

This also applies to people you worked with, and business partners, and products you planned to bring to the market, and relationships in the business environment.

When I thought that worked with appropriate people, and they proved to be inadequate, thought I invested in liquid assets, and they turned to be illiquid, etc. Experience has shown that the situation is quite different. But we went through it with good grace, and the situation has given us an impetus.

We have started to earn on subsequent crises. Which is good, because if you sustained such a situation, what else can break you down?


– That is now a crisis for you means wide opportunities?

– For us, the crisis now is a joy (laughing). Of course, it is sad to see that the country changed for the worse over the past two years, the people became poor. But in terms of pragmatic attitude to business, for us, indeed, it is an opportunity. 


– Some experts suggest that this year’s activity in the M&A market will grow. What do you think about this?

– The market really comes to life, like the rest of the economy. According to our analysts, the growth of nominal wages will be 20% this year. Today, many companies are starting to recruit – I notice the competition for people we had no two years ago.

Given these factors, inflation will be about 12%. Thus, adjusted for inflation, a real wage growth will be 8%. This means that people will be able to buy more. That is, the domestic demand will increase; it then becomes a kind of driver to pull the country out of a deep gap.

The economy was supported by foreign markets: prices for iron ore, metals, and grains have grown from the beginning of the year and continue to grow. But I would not be optimistic as prices will not remain high. Stable exchange rate, abolition of hard currency regulations – all these factors would open the country for the capital inflow.


– But at the same time the banking system leaves much to be desired…

– The banking system has really collapsed, and more than that, we have not reached the bottom yet. For me, the criterion that we have passed the bottom, would be leaving of shareholders who will to do so, and closing claims to banks from the part of regulator. It will take a year and a half. We will see dozens of banks gone.


– Can you name them?

– I will not say names, the banks is a delicate subject.


– In what areas is the highest liquidity?

– New transactions are closed in the pharmaceuticals, agriculture, IT, and the health care. These areas are liquid. They will drive the economy out of the crisis. Mining and commodity sectors, of course, may be both the brakes and drivers as the last year showed.

Once a country was supported by the Euro 2012 Championship, preparations for which revived the demand in the relevant areas. The war stimulated the military re-equipment,   which led to development of mechanical engineering, aircraft construction.

The medicine shows a trend towards great growth. In the next three to five years we will see a massive shift of patients from the stagnating state medicine to the developing private sector.


– The Concorde Capital’s portfolio contains the medical clinics network “Dobrobut.” What are the plans for it?

– By the end of this year we plan to open five to seven health facilities in Kyiv and other big cities. We intend to invest $ 100 million over the next five years.


– Whose are the investments?

– Partly this money is generated by the business, and partly – by contributions of shareholders and borrowed funds.


– Where else the Concorde Capital will invest?

– We are interested in the IT sphere. We’ve entered as a passive investor the segment of payment systems (Tyme brand). In our opinion, traditional bank transfers will gradually lose importance and more services will go to payment systems via mobile applications. Our interest is there. Also, the energy saving has good prospects – a good predictability of the business and a good margin.


– Will privatization 2016 be conducted in a scope declared by the State Property Fund? What are your expectations for sale of assets?

– They have been declaring the wiliness to sell something for about two years. They do it under the public pressure, people’s desire to stop corruption in state-owned companies. But we do not see the real privatization.

Situation with OPP is a striking example of all drawbacks and conflicts of interest. For example, the plant management is doing nothing by stealing money. Concorde Capital is a shareholder of OPP, and we are going to take more active steps in order to establish the normal principles of corporate governance at the company.

Why does the management steal money of shareholders? In particular, ours? An appraiser who performed evaluation of the Port’s assets, probably, was afraid of public complaints and criticism, and as a result the price that the Government wants to get from privatization, is about $ 750 million. Less the $ 200 million debt, a starting price will be $ 550 million.


– Do you think this estimate is exaggerated?

– According to our estimates, in 2014 OPP earned about $ 90 million. At that, the official statements showed the loss of 600 million hryvnas. Where, in your opinion, the difference has gone? To corrupt pockets. We think that 2015, the plant had to earn about $ 50 million.

Well, then apply any market multiples for similar plants and get the price. According to the most optimistic estimates, if we use a multiplier 6, the enterprise value would be about $ 300 million. Therefore, the appraiser decided better to overestimate than underestimate. But at that price, no one will buy the asset. And the State Property Fund, despite all the requests, refuses to revise the price.


– What is the fair price of OPP?

– Even if we put up for $0 and observe all procedures, the market will assess the OPP at the fair price. If you look at details, it becomes clear that OPP produces one third of the world ammonia, including the Russian production. Therefore, the Plant itself is a global player in this market.

If we sell it, the price may be even higher than those obtained by the multipliers. The fact that a foreign investment bank UBS is working and nothing changes, already indicates the process “efficiency”. So I am very skeptical about the OPP. Also, I hear a lot about privatization of other assets for a long time, but do not see anything.


– In other words, you do not believe in the successful privatization of this year?

– Well, there will be no privatization … OPP, which were supposed to be a driver for attracting private effective owners, unfortunately, would become an anti driver. I’d be very surprised and pleased if the SPF be able to sell the asset at the announced price.

I present the sellers with a block of champagne! But if the process will not go, we as shareholders, albeit with a small package, just go there to regain some order.


– In 2014, you took part in the parliamentary election from the list of Sergei Tigipko’s party “The Strong Ukraine”. And you were the HR adviser for the 2015 Cabinet…

– Both 2014 and participation in the parliamentary election from the “Strong Ukraine” was a big mistake. I did not refer specialists to the Government, but they asked me to give some advice on people who had already been selected and whom I knew personally.


– Do you have political ambitions today?

– There was not and could not be political ambitions.


– What do you think on efficiency of your former subordinates in the power? Roman Nasirov at the GFS, for example…

– Given all shortcomings that exist and are discussed today, given all the charges of smuggling at customs, pressure on business by the police and so on, I think Roman Nasirov is one of the best tax officials in the state.

Although the attitude is not improving, but worsening, Mr. Nasirov’s office managed to increase revenues. Some of the politicians say they just wheedle money out of the business, but for me their steps are obvious, for example, the introduction of electronic tax administration.

Of course, I have all reasons to believe that the Service would have worked better. But even more reasons to think that there are quite rapid changes.

I’m certainly not ashamed of any one man, I recommend to office or who worked with me.


– Not long ago you admitted that used to drop in the Presidential Administration. But now you have gave up. Is your mission accomplished?

– First, I had no mission. Second, I was there not often, just occasionally. I’m really disappointed in some officials and the government as a whole.


Although they indeed made important steps in many directions. For example, it is liberalization of gas prices or various deregulations. But their number is not as great as wished to be.   

Other reforms, obviously the most important ones, having the greater effect on the country, for example the pension reform, have not been performed yet. For two years the Government did nothing to change anything.

It is no need to reinvent the wheel – recommendations are known to all. The only one, who has done something in this direction, was Sergiy Tigipko in the government of Yanukovych. Today, the people who should deal with this issue and take responsibility for it remain in the government.

Even the Minister Pavlo Rozenko, who did nothing, was promoted to the Vice Prime Minister. This is nonsense! People who delay reforms are praised.

The same applies to the land market. It is absent – populists “talked round” the issue, saying that voters would be supposedly unhappy. But now I hear a lot of outrage over the gas prices. We have created an adequate compensation mechanism for low-income families. And no one is outraged.

Do the same on the land market. Or take an ordinary decision to cancel the licensing of foreign drugs. The lion’s share of the market (65%) is controlled by foreign companies.

Why not to apply the experience of Georgia, Poland, when you just adopt the regulatory function of the developed countries? Only recently, under Vladimir Groisman, it happened. But the most valuable – time – was lost.


– Will the Cabinet of Vladimir Groisman be able to do so?

– I believe he has all the chances to become the most prominent Prime Minister due to his economic background earned in Vinnysta, the communication experience gained in the Parliament, and due to the lack (so far) of presidential ambitions. He can afford taking unpopular decisions.


– What are your objectives in Ukreximbank?

– Not anymore. I resigned back in February. I even do not know what happened to my letter of resignation.


– You have wide press coverage, a lot of articles you call “biased” (cash withdrawal for terrorists, the hacking scandal in the United States, etc.). Do you have any enemies?

– I definitely do not have. But it is quite possible that someone constitute himself as such.  We do a lot to clean the entire segments of the economy, my colleagues also do it. Here are reasons for such publications.

Somebody thinks I have a corporate affiliation with any group of people, so that to “kill” these people, they are “killing” me (I know it sounds dramatic). The dog barks, the caravan moves on…


– I cannot help but ask the question we all discussed some time ago.  When will the Concorde Capital sign reappear on the Parus Business Center?

– (Laughing.) I do not deny it may reappear, but in a more creative way. And the criterion will not be the fact I have more or less money. I think it’s a commonplace idea. We do a lot of other useful things.

We grow, develop, and what we thought was important at once, is not believed as such   now. We produce the best market reviews in the country, carry out the most important events abroad, and bring the best foreign lecturers for the Ukrainian business on a regular basis. Everything else is claptrap.

And people tend to discuss other people’s lives if they do not have their own business. So they keep themselves busy. At least, so say.


– What is the fundamental business law you have formulated for yourself?

– Business is a complicated thing. It requires the involvement, efforts, time, resources, and a lot of people. Accordingly, there are always force majeure situations. And my conclusion – you should always deal with dignity, be honest to admit your mistakes, do not hesitate to ask for help from others when needed, and not to recede from circumstances. It’s just not productive.



Igor Mazepa, Director General of Concorde Capital Investment Company

Born on: July 2, 1976 in Kyiv.

Education: Kyiv National Economic University, specialty “International Economics” and “Law”.


from 1997 – investment banker at IR Prospect Investments;

2000-2002 – Managing Director of the Foyil Securities New Europe Investment Company, then – Director of MFK Investment Company;

2004 – Founder and Director General of Concorde Capital Investment Company.

Hobbies: marathon, rowing and winter sports.


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