Bravery, common decency and reflections on investing from a Russian prison cell

Irish Times

22-04-2025

The arrest of top US fund manager Michael Calvey in Moscow,
on what proved to be trumped up charges, made international headlines in 2019
. Diplomatic efforts, including a direct intervention by then president
Donald Trump
with
Vladimir Putin
,
failed to secure his freedom
, as the Russian president maintained that he could not interfere with the country's independent judicial system.
'Going to prison is never easy, but Matrosskaya Tishina is synonymous with misery and despair,' Calvey tells The Irish Times. 'I spent the first few days being interrogated in solitary confinement by FSB [secret police] specialists who told me the only way out was to admit my guilt to a crime that never happened – which I refused to do.
'I imagined they would put me in a cell with hardened criminals. I was asked to gather up my belonging at 10.30pm at night, just before lights out. I was led to a cell with seven prisoners, and I expected the worst, but I was greeted cheerfully by my name, and I had the good fortune to share my cell with a bunch of really brave and decent men
."
Calvey's prison experience and the circumstances that led him there are the subject of his new book, Moscow Odyssey, where he writes eloquently about the humanity and stoicism of the men he met in prison who shared their food parcels and kept him going during his darkest days. The book charts the path of
Russia
over the past three decades and how his optimism for the country fades as he falls victim to the corruption that lies at the heart of the state.
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Growing up in an Irish Catholic American family in Oklahoma in the US, Calvey developed an early fascination with Russia as a teenager, inspired by reading New York Times Moscow correspondent Hedrick Smith's The Russians, which related first-hand experiences of the Soviet era in the 1970s.
'You could almost smell the Soviet cigarettes, samovars and communal apartments,' he says.
After college, Calvey briefly pursued a Wall Street career with investment bank Salomon Brothers, where he specialised in energy, and this led to an opportunity to join the European Bank for Reconstruction & Development (EBRD). He arrived in Moscow in early 1992, weeks after Mikhail Gorbachev announced the dissolution of the Soviet Union – and found it the capital city a grim place.
'It seemed a strangely colourless place – everything seemed to be grey or brown. People seemed unwelcoming, scowling if I accidentally made eye contact. There was no sense of excitement of a new nation getting onto the front foot, full of opportunity or promise,' he recalls.
Working in the oil and gas sector, he visited lesser-known regions, where he encountered conditions at times so cold that his contact lenses ended up frozen. He married a Russian citizen in the 1990s and started a family, splitting time between London and Moscow.
In Russia, this of course was an era of oligarchs and criminal gangs running protection rackets.
The country's economic fortunes swung wildly, and a market collapse in 1998 led to an IMF bailout. Russia changed over time as Putin seized more and more control. Prosperity followed, and Calvey moved to the private sector as a fund manager, where he pivoted from energy to focus on opportunities presented by the emergence of a wealthy middle class.
The firm he led, Baring Vostok, eventually became one of the top funds in the country. While there were some early failures, there were also blockbuster successes, such as Russian search engine Yandex, where a $5 million investment led to a 450-fold return on the fund's investment, when it was cashed out after a Nasdaq IPO valuing the firm at $8 billion.
An ill-fated decision to invest in the banking sector proved Calvey's undoing. His apartment was raided by secret police in 2019, and he was arrested on corruption charges relating to investments made by the bank. He was detained along with other executives on charges of embezzlement linked to mid-sized lender Vostochny in a 2.5-billion-rouble (circa €30 million at the time) case.
Calvey knew the accusations were bogus, but his life was turned upside down. A later cancer scare compounded his worries, but it was caught in time.
Jail was followed by release to house arrest, curfew and then freedom to leave Russia, but it was 2024 before the conviction was vacated, following a tortuous legal process, that eventually gave him the legal status of someone not convicted of the related charges.
'Any postwar investment will be pretty small, while people test to see how thick the ice is under their feet on the frozen lake they are standing on'
—
Michael Calvey on investing in Russia after the Ukraine war
When Putin invaded
Ukraine
, Calvey pulled all of his firm's investments out of Russia. Regarding Ukraine's situation, he foresees a resolution that involves Ukraine securing EU rather than Nato membership and ceding part of its territory to Russia as part of its settlement. The ending of sanctions on Russia, meanwhile, could be tied to Russia paying at least a substantial part of the reconstruction costs of Ukraine, which he can't see western taxpayers wanting to stomach fully.
While he has concerns about the rhetoric of the Trump administration and damage the US president is causing to EU-US relations, he applauds moves to make Europe more responsible for funding its own defence and pushing for a more urgent end to the conflict in Ukraine, moves which he says are long overdue.
Calvey (57), believes it will take a long time for Russian-western trade to be restored to former levels, but does feel it is worthwhile for the West to hold out for this prospect.
'While I think it is premature to talk about a return of investment while the war is going on and before any peace agreement can be tested for its stability, I think it is right and wise for the Trump administration to put it on the table because it does create a further incentive for Russia to end the war. If they feel like they are going to be in the penalty box forever, there's less reason for them to stop fighting,' he says.
'However, even though it is in US and western interests to propose a conditional resumption of trade and investment based on peace being maintained, I don't think that big investors are going to be putting a lot of money in for some time. They are going to have to consider how fragile that peace agreement might be when there are people who hate each other so much on that border now. Any postwar investment will be pretty small, while people test to see how thick the ice is under their feet on the frozen lake they are standing on.'
Today, as chairman of Baring Ventures, he focuses on other international markets, including some promising ventures backed by Russians now based in the West. He splits his time between Switzerland and the UK.
Reflecting on his time in prison, Calvey says: 'It's a cliche, but the experience did make me extremely grateful for what I have. I don't take things for granted, and it's made me more philosophical. One thing it didn't do is to shatter my great sympathy and affection for ordinary Russian people.'
Michael Calvey's book, Odyssey Moscow, One American's Journey from Russia Optimist to Prisoner of the State, is published by The History Press