Moscow overtakes New York as the billionaires' capital of the world

Male, 47, married with two children and a mistress, owns property in Moscow, London and the south of France, called Viktor or Boris, runs some kind of business exploiting natural resources, worth a cool $4bn (£2.3bn): that, according to the Russian edition of Forbes magazine published yesterday, is the typical profile of one of Russia's growing number of super-rich oligarchs.

And, saysForbes, which has just published the first rich list of Russians, the country that gave the world Communism almost 90 years ago is turning out millionaires and billionaires at a rate that makes the United Kingdom and the United States look like they are the states which need a lesson in capitalism.

In February, when Forbes last checked, Russia had 25 billionaires; three months later it has 36. Thirty-three of these 36 billionaires - Forbes's list includes Russia's 100 wealthiest business people, not all of whom are billionaires - live either in Moscow or claim to carry out their principal business activity there.

That, says the magazine, means that for the first time ever the capital of Russia has more billionaires than any other city on earth. "Money in Russia is not only concentrated in the hands of a small group of people," Forbes says. "But the majority of these people are associated with one town. No other city in the world can boast such a large number of billionaires, even New York, which serves as the base for 31 billionaires."

Russia still has a long way to go to catch up with America and Germany in terms of sheer numbers of billionaires - the US boasts 227 and Germany 52 - but the rate of wealth creation is staggering, as is the concentration of riches. The combined wealth of Russia's 36 richest people is equal to a quarter of the country's entire gross domestic product (GDP), whereas in US the combined net worth of American billionaires is equal to just 6 per cent of the country's GDP. Indeed a massive 57 per cent of Russia's industrial base is supported by just 23 companies.

The majority of Russia's super-rich (two-thirds) has accrued its wealth from exploiting the country's bountiful natural resources, such as oil, gas, timber and precious metals. These 66 people were able to snap up controlling interests in the vast nation's largest natural resources companies in the wake of the collapse of the Soviet Union in 1991. However, many Russians now liken the legally grey fashion in which they did this to daylight robbery.

Just 34 on the list can claim to have set up new businesses. These are mostly in telecommunications, the construction industry, food manufacturing or share trading.

With $15.2bn (£9bn) to his name, Mikhail Khodorkovsky, the 40-year-old principal shareholder in oil giant Yukos, remains Russia's richest man. But his ability to spend his billions is painfully constrained. In jail, awaiting his trial and facing a plethora of charges, ranging from tax fraud to embezzlement, the Russian state has confiscated many of Mr Khordorkovsky's assets.

Although he seems to spend most of his time in London, the 37-year-old Chelsea football club owner, Roman Abramovich, is listed as Russia's second-richest man, with $12.5bn. Russians still see him as one of their own despite a residual resentment that he chose to invest in an English Premier League football team and not a Russian one.

Boris Berezovsky, the UK-based tycoon who was once Russia's richest man, suffers the relative indignity of being rated 47 by Forbes with a "trifling" $620m to his name. The remainder of the list includes names that are well known in Russia but which have yet to penetrate the British psyche due to the unglamorous nature of their businesses.

Although Russia makes a big song and dance about celebrating International Women's Day every year, 99 of Russia's 100 richest people are men. Ranked at 35, Elena Baturina, the 41-year-old wife of Moscow's mayor, Yuri Luzhkov, is the glaring exception. Worth about $1.1bn, she presides over a monolithic construction company based in Moscow that has managed to snap up some of the juiciest building contracts in the capital in recent years, a development that her critics claim has much to do with her husband's position.

Forbes says it has carried out a detailed study of Russia's super-rich, their spending habits and lifestyles, and has drawn up a composite portrait of a Russian billionaire businessman. "[They are] male and 47," says the magazine. "They were born ... outside Moscow but were able to get a higher technical education in the capital. When a law regarding 'co-operation in the USSR' was passed in 1988 they began to trade in computers, then they got into banking and finally they made it into the export of raw materials."

The same people now own controlling stakes in those companies and spend much of their time in North America or Europe, locations to which they moved their families in the 1990s. Their aim in life is to bequeath their wealth to their two children.

Pavel Klebnikov, Forbes's chief editor, suggests that the British image of free-spending Russian oligarchs is somewhat misplaced. "The paradox is that oligarchs don't usually spend huge sums of money." Klebnikov, however, seems to have a different concept of money from most people. He estimates that Russia's wealthy businessmen shell out some $161m every year in capital investment and that their annual running costs amount to some $9m.

He goes on to paint a picture of a level of wealth that would make most ordinary Russians, who scrape by on an average annual salary of $200 a month, turn beetroot-red with fury. Forbes says that any self-respecting billionaire owns a $5m flat in central Moscow with furniture made to order, a $400,000 Moscow flat for their lover, a $10m villa or dacha in the Moscow countryside, a $25m family home in London (usually Belgravia), a $2m London flat for his lover (usually in Chelsea) as well as a $25m villa in the south of France.

That, says Forbes, is in addition to a stable of at least three or four BMWs, Mercedes and Audis, a $33m private jet, a $2m antique collection to furnish his London home and a 170-foot yacht worth $40m (built to his personal specifications, of course).

Some of the more culturally sophisticated oligarchs have a taste for for expensive art collections too, says the magazine. Forbes puts a $15m price tag on a decent collection.

Running costs cover such trivialities as bodyguards (important in a country where a hit can cost as little as $30,000), drivers, nannies, gardeners, clothes and makeup for his wife and mistress, servants, school fees, fine wine and food and winter skiing holidays - inevitably in Courcheval in Switzerland.

Contrary to popular belief, says the magazine, rich Russians spurn Italian sports cars or Bentleys. "Navigating Moscow's winter snowdrifts in a Lamborghini or something similar is not the most practical way of getting round."

Most people on the rich list prefer to rent a car with a driver - from one of the most expensive agencies of course. "The reason is simple. Many Russian capitalists have been so busy fighting for market share and export contracts and so don't have a driving licence," Forbes says.

The magazine admits that the UK continues to bewitch wealthy Russians. "In autumn it's quite pleasant to fly to London for the weekend. There is much business to be done there and it's enjoyable to relax there."

It says that "elegant detached Victorian houses in a quiet area near Belgravia, Eaton Square or Holland Park" are wealthy Russians' favourite addresses. "Twenty five million dollars for such a property does not seem exceptionally expensive [for them]. One can also buy a house in the country not far from London, somewhere like Surrey."

Forbes explains that any wealthy Russian worth his salt must have a foothold somewhere in the UK because that is where they have their children schooled. It goes on to say that schools around Millfield, Seven Oaks, Eton and Harrow are in vogue among "new Russians" and "comparatively cheap".

The magazine admits, however, that not all Russian businessmen will appreciate the fact that they have been "outed" as members of Russia's elite super-rich. With at least one-third of Russians living beneath the poverty line and 70-year-old women still forced to sell cheap scraps of food outside the capital's metro stations, such ostentatious displays of wealth do not go down well among long-suffering ordinary Russians.

One businessman on the list, who preferred not to be named, said as much to Vedomosti, a daily newspaper. "They couldn't have published this list in a worse place at a worse time," he moaned. "In our country any discussion of personal wealth results in nothing but an increase in my blood pressure."

THE NEW SUPER-RICH

ELENA BATURINA, 41

Best known for her powerful husband, Yuri Luzhkov, the Mayor of Moscow, Elena Baturina is the only woman in Forbes's rich list. Worth about $1.1bn, the magazine says she is the 35th-richest person in Russia and says that her wealth is derived in large part from a monolithic Moscow construction company, Inteko.

She owns 99 per cent of the firm while her brother owns the remainder. Her critics allege that the company has been able to cash in on Moscow's housing boom because of her husband's patronage. He has been the capital's mayor for the past 12 years. She and Mr Luzhkov have two daughters.

She insists that she has built up the business on her own. Forbes seems to agree. "It would be naïve to assert that the interests of Inteko are entwined with the capital's mayor. Elena Baturina has long appeared to be an independent player ... who is able to handle herself with Moscow officialdom as well as with the federal authorities."

She began her business career in 1991, the year that the Soviet Union collapsed, and initially set up a firm producing plastic goods such as buckets and chairs. That business only accounts for 10 per cent of her firm's turnover now. The rest is construction.

MIKHAIL KHODORKOVSKY, 40

Officially Russia's richest man and worth $15.2bn, Mr Khodorkovsky is on his second marriage and has four children.

The former chief executive of oil giant Yukos, he is awaiting trial in Moscow's Malaya Tishinskaya prison, accused of tax fraud and theft. If found guilty he is likely to be stripped of his fortune. Analysts expect the courts to throw the book at him in order to show that the Kremlin will not tolerate oligarchs with political ambition, which he clearly had.

Before his arrest he had been fiercely critical of President Vladimir Putin. In the 1990s he co-authored a book extolling the virtues of Russia's new rich. He claimed that they were the economy's main driver and the guarantor of a healthy society.

He has since had a change of heart, however, and written two missives from prison urging Russian big business not to be so greedy and to give back some of its enormous wealth to the country and the people. He has also urged the country's liberals to make their peace with Mr Putin. Russia is the world's second-largest exporter of oil and Mr Khodorkovsky's Yukos grew richer as oil prices soared.

His case is due to come to trial in June or July.

VIKTOR VEKSELBERG, 47

Russia's third-richest man, he is worth a cool $5.9bn. The source of his wealth is oil and precious metals. Born in the Ukraine, he is married with a daughter and a son and is something of a Russian patriot. Earlier this year he paid a price thought to be close to $90m (£50m) to acquire the second-largest collection of Russian Fabergé Easter eggs in the world. The eggs belonged to the five Forbes children in the United States - Mr Vekselberg has since brought them back to the motherland where they are expected to go on display soon.

The main shareholder in a firm called Renova, Mr Vekselberg has studiously avoided any entanglement in politics. He started his business career in 1988 trading in computers. He went into business with a former classmate who had emigrated to the US. In 1994 he led Russia's first successful hostile takeover when his firm took control of the Vladimir tractor plant and brought in a Russian-born Harvard graduate to run it.

He made most of his fortune when he teamed up with others to take over TNK, Russia's third largest oil group. TNK then signed a deal to merge with BP's oil operations and Mr Vekselberg has not looked back since.