(Bloomberg) -- Jonathan Samuels set up Octane Capital to help property developers deal with unpredictable times.

The London-based lender is now dealing with its own unexpected headache.

Octane, which has made more than $1.3 billion of short-term loans over the past five years, was created with the backing of LetterOne Holdings, a $20 billion investment firm for Russian billionaires, including co-founders Mikhail Fridman and Petr Aven, who were sanctioned by the European Union and the U.K. after the invasion of Ukraine. 

Luxembourg-based LetterOne itself hasn’t been sanctioned. Still, Octane is taking precautions. 

The firm has issued shares to its management with voting and distribution rights that would kick in if a “sanctions event occurs,” according to a March 15 filing, a move that takes LetterOne’s control below 50% and shields Octane from asset freezes if the U.K. targets LetterOne. Meanwhile, LetterOne’s representatives at Octane have stepped down from the company’s board. 

“Steps were taken prior to any sanctions announcements in the U.K., with an abundance of caution, to protect them in case of any unexpected and unlikely fallout,” a LetterOne spokesman said. 

The situation underscores how Russian billionaires’ money has swept through London’s finance industry in the past decades, funding private equity and real estate, and how the invasion of Ukraine has complicated those investments. 

LetterOne said in its latest annual report that it finances U.K. property developers and landlords through Octane. Samuels, 44, partnered with a fund from Pamplona Capital Management made up of mostly LetterOne’s money to launch Octane in 2017. LetterOne took control of the investment around early 2020.

On Thursday, Pamplona said separately it planned to liquidate three funds with ties to LetterOne, which has been the private-equity firm’s biggest investor with almost $3 billion.

Octane has provided more than 1,100 mortgages since its inception, specializing in bridge financing and specialty buy-to-let mortgages. LetterOne had a controlling stake in Octane in November and also provided revolving credit lines.

The U.K. sanctioned Fridman, 57, and Aven, 67, on March 15 along with fellow LetterOne shareholders German Khan and Alexei Kuzmichev, who both resigned from the firm this month. The EU extended its sanctions list the same day to include Khan, 60, and Kuzmichev, 59. 

Britain stepped up its efforts again on Thursday when it imposed sanctions on Alfa Bank, a Moscow-based lender founded more than two decades ago by Fridman.

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