You wouldn't know that Alexander Fridman is the child of Russia's 11th-richest person. He rents a two-room flat on the outskirts of Moscow for $500 a month and uses the subway to get to work.
"I eat, live, sleep, dress in everything that I earned myself," said Fridman, 19, whose father, Mikhail Fridman, has a $13.7 billion fortune, according to the Bloomberg Billionaires Index.
The junior Fridman returned to Moscow last year after graduating from a high school near London. Five months ago, he started SF Development, a distributor with five employees and $405,000 of revenue. Another business distributes hookah products to Moscow restaurants. And then there's BloggerPass, an online marketing firm that's set to debut next month.
While he's striking out on his own without interference from his father, Alexander is certainly benefiting from his connections. SF Development distributes products to his father's retail shops, in addition to other clients. Fridman doesn't see it that way, saying managers won't put goods on the shelves just because he's the owner's son.
This privileged form of entrepreneurship still stands out in a country where business titans often employ their children to teach them the nuances of doing business in Russia. Olga Rashnikova, 42, the daughter of steel tycoon Victor Rashnikov is on the board of his Magnitogorsk Iron & Steel Works PJSC. Andrey A. Guryev, 37, is chief executive officer of Phosagro, a fertilizer maker founded by his father, Andrey G. Guryev.
Changing Hands
Then there are those who already are transferring fortunes to their heirs. Last year, steel magnate Alexey Mordashov, 54, handed $1.7 billion of his holdings to sons Kirill and Nikita. Vladimir Evtushenkov, 71, gave a 5% stake in publicly traded Sistema PJSC to his son Felix. Billionaire Leonid Fedun, 63, turned over $1.4 billion of his holding in Lukoil PJSC to his children, Anton and Ekaterina.
Globally, the ultra-rich are preparing to embark on the largest wealth transfer in history. Russia stands out because the country's legal framework offers little support to those seeking to pass down fortunes. Instead, its business environment depends on informal agreements and guarantees.
"My father told me that in our country business and politics are deeply intertwined," said Alexander, adding that his dad always told him that he plans to transfer his wealth to charity. "I lived with the understanding that I wouldn't inherit any fortune."