Former Potanin Executive Buys UK Unit of Top Russian Brokerage

Skyscrapers in the City of London square mile financial district in London, UK, on Tuesday Sept. 26, 2023. UK regulators want to boost diversity and inclusion in the financial services sector by requiring firms to set targets and making clear that a banker’s private behavior can be relevant to determining their suitability to work in the industry. Photographer: Chris J. Ratcliffe/Bloomberg (Chris J. Ratcliffe/Bloomberg)

(Bloomberg) -- BCS Prime Brokerage Ltd., the UK arm of one of Russia’s biggest brokerages, has been acquired by a businessman who previously worked as a senior executive at businesses owned by sanctioned tycoon Vladimir Potanin. 

Gerald Banks, also known as Guerman Aliev, is part of a US-UK consortium called GBM Holdings that has taken over London-based BCS Prime Brokerage, according to a statement on GBM’s website. Banks has become a significant shareholder in the business, replacing the owner of the firm’s Russian parent company, Oleg Mikhasenko, filings with the UK Companies House show.

Western sanctions in response to the full-scale invasion of Ukraine in 2022 have hammered the UK subsidiaries of Russian financial firms. London-based units of state-owned banks Sberbank PJSC and VTB Bank PJSC were forced to wind down, while BCS Prime Brokerage’s business model of helping foreign investors trade Russian stocks and bonds was upended.

The firm will operate under a new brand, GBM Securities, focused on emerging and frontier markets, according to the statement. The company will provide so-called prime-brokerage services — which includes lending to hedge funds to finance their trades — along with matching buyers and sellers of securities.

A spokesperson for BCS in Moscow didn’t immediately comment. Banks wasn’t immediately available to comment and referred Bloomberg News to the GBM statement. A spokesperson for the UK’s Financial Conduct Authority declined to conduct.

BCS Prime Brokerage issued a special dividend of $27.5 million on June 24, days before the takeover went ahead, filings show.

Under founder Mikhasenko, BCS grew from a Siberian firm trading vouchers in privatized enterprises after the collapse of the Soviet Union to the largest Russian brokerage prior to the invasion of Ukraine, when the Moscow Exchange stopped publishing data. The company pushed aggressively to expand abroad until the war put an end to its international ambitions.

Banks, 53, originally hails from Russia and has previously held multiple senior roles tied to Potanin, the country’s richest man. In 2003, he became deputy chief executive at Rosbank PJSC, a lender currently controlled by the magnate. He took up the same role at Interros Holding Co., Potanin’s holding company, five years later. 

Around 2009, Banks founded Altpoint Capital Partners LLC, a New York-based private equity fund in which Potanin was the biggest investor. The firm listed stakes in more than a dozen companies include Ford Models Inc. in 2019, according to the Internet Archive’s Wayback Machine. 

Banks has no remaining links to Interros, according to a spokesperson for the company. 

“Aliev, also known as Banks, has had nothing to do with Interros for many years,” the spokesperson said. “We know nothing about him and his deals.”

Potanin is the top shareholder and president of mining giant MMC Norilsk Nickel PJSC and is sanctioned by the US, the UK and Canada.

©2024 Bloomberg L.P.

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