Charles Gasparino
Business
Published January 20, 2024, 5:39 p.m. ET
Ukrainian President Volodymyr Zelensky received a cool reception from business leaders at the World Economic Forum in Davos. AFP via Getty Images
Volodymyr Zelensky is used to getting his own way when it comes to money. Look at the untold billions US taxpayers have given his country to defeat Russian aggression.
Getting money from the private sector was much more difficult. Witness the chilly reception he received from bankers at the World Economic Forum in Davos, Switzerland, last week. It spoke volumes about the enormous challenge Zelensky faces not only in repelling Vladimir Putin's hordes but also in repairing the damage they have inflicted on his economy.
The WEF, of course, is an annual conversation fest of Wall Street elites and globalist financiers who talk about important issues even if they never seem to get anything done. This year's event at least promised to achieve something concrete, because Zelensky would be in the room with some of the world's most powerful bankers and he really needs their money.
Wall Street has shown great interest in investing in Ukraine. The banking class (like the rest of us) admires the country's resilience. The financial world also recognizes the geopolitical urgency of preventing Vladimir Putin from restoring the old Soviet Union on the backs of the Ukrainian people.
And they liked Zelensky's presentation in Davos: Despite ongoing hostilities, inflation in his country has fallen from as high as 30% to below 6%; the economy is growing. He plans to open the vital Kiev airport in the coming months. The western part of the country is fairly safe from bombing, he explained.
Led by JP Morgan and Jamie Dimon's team of Mary Erdoes and Vince La Padula, an investment fund is ready and waiting to be launched. As highlighted in this column, JP Morgan has held a series of private meetings with potential investors as the country offers an excellent investment opportunity in many ways. Ukrainians are both educated and productive when their homes and businesses are not bombed.
And the big bankers like Dimon of JP Morgan, Ray Dalio of Bridgewater Associates, David Rubenstein of the Carlyle Group, Steve Schwarzman of Blackstone and a representative of Larry Fink's wealth management empire BlackRock acted as if they were ready to make a deal first in front of the cameras and then in front of Zelensky himself during a private meeting where they discussed how to repair infrastructure, build a technology economy and produce.
Yet Zelensky walked away empty-handed, I was told. Last week, the heads of the world's largest investment houses failed to make a single firm commitment.
There was a little bit of good news for Zelensky from Davos: Robert Kraft, yes, that Robert Kraft, the billionaire owner of the New England Patriots, has been involved in the discussions led by JP Morgan about the reconstruction of Ukraine for about a year, and he thinks so are now seriously considering building factories in Ukraine.
Before Robert became synonymous with a team that (until recently) regularly won Super Bowls, he was big in the papermaking industry. Sources tell the Post that he and his son and business partner Jonathan (they run the Kraft Group holding company of the same name) are eyeing locations in the far less war-torn western part of Ukraine and may decide to move forward with building a factory or two later this year.
A spokesperson for Kraft Group says the company has had “some preliminary discussions about the possibility of doing something in the future, but nothing is imminent.”
The upcoming Kraft investment is estimated to be around $100 million. That's good, but small compared to the private investment needed to create jobs and economic growth and the amount Wall Street could raise under the right conditions.
And the money is waiting, which is a good sign. My banking sources say Zelensky has convinced the investment big shots that he is rooting out corruption, a major obstacle to any significant capital raising. They also like what they hear about its economy's recovery.
It is the war that prevents Wall Street from fully opening its wallet. The problem, simply put: Investors know that there is no return on investment for bombed-out tech startups.
During the closed-door talks that I first reported on Fox Business, Zelensky may have made his predicament even worse. He gave no indication that he was ready to hold peace talks with Putin, the man he recently called “Hitler.”
This means that private funds in any significant amount will not be available in the foreseeable future. I'm sure Dimon told Zelensky exactly that. The JPM boss must also have told Zelensky that Ukraine would have access to billions of dollars from private equity, institutional investors and rich Americans the moment the bullets stopped flying, but not a second before.
Manchin on the rise
Last week at PR impresario Robert Dilenschneider's home, powerful West Virginia Sen. Joe Manchin, the longtime political moderate, told a group of potential donors why he can't stand Donald Trump's divisiveness and Joe Biden's weakness and why another There will be one Candidate needed to run for the White House because the future of the country is at stake.
Manchin did not specifically say he was running for president as an independent candidate from the so-called No Labels organization, the nonpartisan organization he has been a member of in recent years.
But there's really no other reason to be in Darien, Connecticut on a cold winter evening unless you're running, so stick with it.
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