President Boris Yeltsin created Russia’s mutual fund business in 1996 by decree and as the stock market boomed the number of funds proliferated until Russia’s financial crisis in 1998 killed off all but one. Now they are back and growing fast, thanks to Russia’s strong economic growth, rising incomes – and a nasty shock that everyone got last year when the state pension fund sent out letters telling Russians just how much it had put aside for their old age.
Russia has just implemented the first phase of its pension reform. This April, 55 newly licenced management companies will get their first dollop of money from the “investable” part of Russian citizen pension contributions.