Key Takeaways
- • $6 billion in Abramovich-linked capital is now frozen across more than 100 hedge funds and private equity firms following EU and UK sanctions imposed in March 2022 against the Russian billionaire.
- • Concord Management, the Tarrytown-based fund allocator founded by Michael Matlin in 1999, distributed most of Abramovich's wealth to major institutions including Brevan Howard, Millennium Management, Carlyle Group, D.E. Shaw, Sculptor Capital, and Apollo Global Management.
- • Sanctioned assets cannot be redeemed, liquidated, or transferred under Cayman Islands regulations governing offshore fund entities; managers can continue operating the funds but cannot collect accumulated fees until sanctions are lifted.
- • Fee collection is suspended indefinitely — while managers may charge fees on Abramovich capital, they cannot collect them or process redemptions, creating balance sheet constraints for participating firms.
- • No U.S. sanctions exist, limiting the freezing mechanism to EU and UK jurisdictions, leaving some regulatory ambiguity for American-based fund managers handling the capital.
Summary
Roman Abramovich's sanctions by the European Union and United Kingdom in March 2022 have created an unprecedented liquidity trap for over 100 hedge funds and private equity firms that accepted capital from the Russian billionaire through Concord Management, a fund-of-funds allocator. Approximately $6 billion—the majority of Concord's assets under management—belongs to Abramovich and is now effectively frozen across multiple investment vehicles, according to Bloomberg reporting.
Concord Management, founded in 1999 by Michael Matlin and based in Tarrytown, New York, functioned as the primary vehicle for channeling Abramovich's capital to major investment firms. Over two decades, the allocator built relationships with institutional heavyweights including Brevan Howard Asset Management, Millennium Management, Carlyle Group, D.E. Shaw & Co., Sculptor Capital Management, and Apollo Global Management, along with smaller firms such as Sarissa Capital Management and Ratan Capital Management. When Concord originally solicited commitments, participating funds were offered checks as large as $100 million, making the opportunity difficult to refuse at the time.
The sanctions regime creates a legal straitjacket with no clear exit. Under Cayman Islands regulations—the jurisdiction where many offshore fund entities are domiciled—managers cannot redeem Abramovich's stakes, accept new capital from him, or facilitate the transfer of his shares to other investors. Any proceeds from asset sales must be deposited into blocked accounts. While fund managers retain the right to charge management fees on the capital, they cannot collect those fees until the sanctions are rescinded. This arrangement leaves firms unable to resolve the capital deployment without clarity on when or if sanctions will be lifted.
Notably, Abramovich has not faced U.S. sanctions as of the March 2022 timeframe, creating a complex regulatory landscape where EU and UK freezing orders constrain the capital while American investment managers maintain technical exposure. The situation highlights the operational and reputational risks facing institutional investors who concentrate capital sources among individuals subject to geopolitical sanctions regimes.
Concord Management, founded in 1999 by Michael Matlin and based in Tarrytown, New York, functioned as the primary vehicle for channeling Abramovich's capital to major investment firms. Over two decades, the allocator built relationships with institutional heavyweights including Brevan Howard Asset Management, Millennium Management, Carlyle Group, D.E. Shaw & Co., Sculptor Capital Management, and Apollo Global Management, along with smaller firms such as Sarissa Capital Management and Ratan Capital Management. When Concord originally solicited commitments, participating funds were offered checks as large as $100 million, making the opportunity difficult to refuse at the time.
The sanctions regime creates a legal straitjacket with no clear exit. Under Cayman Islands regulations—the jurisdiction where many offshore fund entities are domiciled—managers cannot redeem Abramovich's stakes, accept new capital from him, or facilitate the transfer of his shares to other investors. Any proceeds from asset sales must be deposited into blocked accounts. While fund managers retain the right to charge management fees on the capital, they cannot collect those fees until the sanctions are rescinded. This arrangement leaves firms unable to resolve the capital deployment without clarity on when or if sanctions will be lifted.
Notably, Abramovich has not faced U.S. sanctions as of the March 2022 timeframe, creating a complex regulatory landscape where EU and UK freezing orders constrain the capital while American investment managers maintain technical exposure. The situation highlights the operational and reputational risks facing institutional investors who concentrate capital sources among individuals subject to geopolitical sanctions regimes.
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