CEO boardroom: What will a post- war Ukraine look like?

What will a post-war Ukraine look like?An exclusive sneak peek into the closed door CEO discussions of IMpower Incorporating FundForum 2022An exclusive sneak peek into the closed door CEO discussions of IMpower Incorporating FundForum 2022Contents

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How can asset managers make the right decisions for their organisations under pressure?

In part one of a closed CEO Boardroom session at IMpower Incorporating FundForum 2022, Baroness Eliza Manningham-Buller, the former director general of the UK’s intelligence agency, MI5, gave the keynote address. She shared sensitive behind-the-scenes details and anecdotes from her time at the helm of MI5, where she would have to make high-pressure decisions every day, with life and death hanging in the balance, and offered some leadership lessons to the CEOs.

In part two of the session, the discussion turned to Ukraine, which remains in the thick of a devastating war. However, the country’s entrepreneurs are already planning how they can drive forward the economic recovery once the war is over. Our panellists discussed how asset managers and investor capital will have a crucial role to play in rebuilding Ukraine post-war.

Yuri Bender, PhD candidate in Eastern European studies and editor in chief at Professional Wealth Management introduced Andrey Kolodyuk, chairman of the Ukrainian Venture Capital & Private Equity Association.

Kolodyuk spoke passionately about his belief that rebuilding Ukraine will be a $1 trillion opportunity which will benefit everyone.

“To rebuild Ukraine is an international project, not only the monetary side but actually to do something good for everyone here,” he said.

“Questions remain as to how it will be done, and I am confident it should be done together with Ukrainian PE and VC investors as a trusted counterparty for the international investment and business community.”

He added that the creative sector in Ukraine will have a significant role to play in the economic recovery.

“Half a million people are involved in the creative industries and building the companies, these are going to be the people who are rebuilding Ukraine.”

“Difficulties make us stronger”

One of these is Victoria Repa, a tech entrepreneur from Donetsk, which was at the epicentre of Russia’s 2014 invasion of Ukraine. Now temporarily running her healthcare company BetterMe from Warsaw, she explained how she still has around 200 staff working from Ukraine and she feels the pressure of keeping them safe.

“Difficulties make us stronger. If the pandemic was difficulty level one, now it’s war it’s difficulty level two,” she said wryly. “For me, it’s next level responsibility to provide safety to my team and their families and secondly create a new workplace.” She has been looking for additional revenue streams so as to donate money to the Ukraine army and provide humanitarian help. “My primary goal is to expand the business as much as possible to provide for my country and create workplaces so that great, bright minds don’t go to Europe or the United States but stay in Ukraine.”

If the pandemic was difficulty level one, now it's war it's difficulty level two.

Her company, and the entrepreneurs of Ukraine, are united in working towards a common goal of victory and independence. Repa explained that a local community of IT specialists in Ukraine has just started a crowdfunding campaign to buy a military plane which raised $1m in a single day in order to help the army. Repa’s own business has been selling sports clothing with part of the profits going to UNICEF Ukraine.

Outsourcing and agriculture to power growth

Giles Farley invests in Ukraine through ICU Ventures, one of the country’s best known investment houses and brokerage, where he is co-head of venture capital and tech investments. He said he is finding incredible opportunities for his venture capital fund in Ukraine’s technology sector, and notes that it is also the third biggest market for outsourcing globally, below only India and China which have populations of over a billion. “You’re talking about a country which is dramatically overperforming in this sector just as it does in agriculture due to the fertility of its lands.”

Farley said the country’s agricultural industry will have a crucial role to play in Ukraine’s economic recovery once the conflict ends.

“You’ve had really brave entrepreneurs build huge agricultural assets – the largest sunflower oil company in the world, one of the largest chicken companies – that are really world leaders in both management and the technology associated with agriculture. And I think there’s going to continue to be a role for those companies after the war is over. Of course, these companies are going to desperately require financing, commodity trade finance, and logistics that are being destroyed by the Russians right now including silos and port facilities.”

Within the technology companies he holds in his portfolio there has been little disruption because they have been contingency planning since 2014 and largely work remotely, Farley explained. Many are continuing to operate at 95% capacity even as the conflict continues, which speaks to the resilience of the sector and the nation as a whole.

Young entrepreneurs bootstrap

Looking forward, she predicts the IT sector will be key to rebuilding Ukraine’s economy, driven by resourceful young entrepreneurs.

Repa said Ukraine’s youth does not necessarily have access to capital markets to raise business funding, but they know how to bootstrap.

BetterMe has been profitable for five years, generates revenues of $100m a year and has 100 million users worldwide, although it started with minimum capital. “We understood how to build a company with a lot of creativity but not a lot of cash” said Repa.

Kolodyuk echoed her sentiments on emerging technologies, notably blockchain. He explained that in March Ukraine’s President Zelenskyy signed a new law making cryptocurrencies legal, creating a legal market for digital assets and paving the way for crypto exchanges to do business there.

“I totally believe the IT sector is the number one sector for the growing incomes of Ukraine’s post-war, and I believe Ukraine can get all the investment we want if we can provide some special, unique projects in the intersection of rapidly growing directions like gaming, blockchain, high-precision technologies, space and education. Today we have a new generation and it’s not about oligarchy, you can do great things with a limited budget.”

The blockchain is an investment opportunity and technology layer, and when it comes to crypto assets and the innovation, Ukraine will be the powerhouse now because other countries are still slow on the legal framework,

he predicted.