The departure of Western firms from Russia has created a once-in-a-generation opportunity for oligarchs and Kremlin associates to get rich. But the frenzy to acquire cut-price assets is not restricted to those at the top — previously little-known business figures have also seized the chance to enter the big leagues, forging a new business elite.
One such figure is Armen Sarkisyan, a media-shy relative of a powerful former deputy mayor of Moscow. Dubbed Russia’s “lottery king” due to his ownership of the state lottery operator, since February 2022 Sarkisyan has become one of Russia’s largest buyers of foreign assets. His rise would have been impossible without patrons and backers inside government.
Sarkisyan’s big break onto the public scene came in July 2022, when his S8 Capital group bought the Russian arm of US lift manufacturer Otis. To mark the deal, Deputy Prime Minister Denis Manturov and Sarkisyan visited the Otis factory in St. Petersburg for a photo shoot, with Manturov hailing how Sarkisyan’s takeover had saved jobs and restored production.
It was the first of many deals the previously secretive Sarkisyan has struck in the two years since Russia invaded Ukraine. In April 2023, he bought three former Bosch factories in the Saratov Region. A month later he bought Continental’s tyre plant in the Kaluga region, and at the end of last year struck deals to acquire Finnish lift manufacturer Kone and a tyre factory previously belonging to Japan’s Bridgestone. The deals made Sarkisyan the second largest player in the multimillion dollar Russian tyre market and a major force in the elevator industry.
Despite previously having been the owner of a well-known, public-facing company — the state lottery operator — Sarkisyan had a low profile prior to this slew of deals. He has never given interviews or statements to the media and hardly any official photos of him exist. His representatives did not respond to a request to comment for this article.
Nevertheless, it is clear the “lottery king” has taken steps to cultivate his image. A cursory search of his name reveals the kind of reputation-boosting articles (such as “Armen Sarkisyan continues to invest in high tech”) that Russian businessmen and their PR machines work hard to place in major publications.
This investigation by the Bell has pieced together new details about Sarkisyan’s background — from his days as an employee and shareholder in one of the most scandal-ridden banks of the 2000s to his role as a monopolist in the Russian lottery market and now as one of the main beneficiaries of the redistribution of foreign assets in Russia.
Sarkisyan was born in the Ukrainian city of Kharkiv in February 1978. His family moved to Moscow in the 1990s and his parents launched a small alcohol business in 1994. He studied law at the prestigious Moscow State Institute of International Relations (MGIMO) and by 2004 was working for Vneshprombank, then a low-ranking lender, but one that would become a symbol of Russia’s banking woes when it collapsed in 2016.
In the mid-2000s he started a number of unsuccessful businesses, including a seed cultivator, an insurer and a childminding agency called “Miss Poppins”. His first big break came after he and his older sister, Jacqueline, hit it off with Vneshprombank’s sibling founders Georgy Bedzhamov and Larisa Markus, including over a shared love of Armenian cognac, a former associate told The Bell.
The Vneshprombank connections are just part of a web of familial and business ties that Sarkisyan has cultivated to build his career. Bedzhamov and Markus are the children of a mafia boss who controlled Moscow casinos and was killed in 1995. Iosif Ordzhonikidze, Moscow’s then deputy mayor and Sarkisyan’s future father-in-law oversaw gambling businesses in the Russian capital. After marrying Ordzhonikidze’s daughter in the mid-2000s, Sarkisyan bought a house in the elite Rublyovka suburb, his family became minority shareholders in Vneshprombank, and his sister married into the family of the bank’s founders, court documents later revealed.
Vneshprombank came crashing down in 2016, after it emerged it had overstated its balance sheet by at least ten-fold. Bedzhamov and Markus had personally withdrawn 1.5 billion euros to buy real estate in Europe. Markus was sentenced to eight-and-a-half years in a penal colony and is facing another trial while Bedzhamov managed to flee Russia before his imminent arrest and lives in London.
Before the bank collapsed, Sarkisyan lent on his business and family ties to help build his first fortune as the head of Russia’s state lottery monopoly.
Sarkisyan was appointed president of Orglot, the operator of the Russian national state lottery (“Gosloto”) in the late 2000s. Media reports at the time said his move into the sector was linked to his long-time friendship with Alexander Varshavsky, the owner of a major Russian car dealership who had acquired a stake in the lottery operator. But a source in the gambling industry told The Bell that Sarkisyan bought the stake with help from his father-in-law Ordzhonikidze, who brokered an introduction to powerful financier Oleg Boyko.
In a strategy he would come to repeat a decade later with the purchase of Western assets, Sarkisyan aligned his interests with those of his influential connections to gain a dominant position in the market. With the Russian government cracking down on private gambling and looking to centralize various national lotteries, Boyko, a serial investor with stakes across the sector, did not want the extra attention of personally controlling a new lottery monopoly, and gladly absolved his stakes in various companies to his new connection, Sarkisyan.
In addition to working alongside Boyko, Sarkisyan’s takeover of the lottery industry was “coordinated” with then Deputy Prime Minister Igor Shuvalov and Sports Minister Vitaly Mutko — who would go on to be a key connection for Sarkisyan in purchasing the assets of foreign lift makers — sources told the Bell. Vneshprombank was also key as he needed access to easy credit. After the bank collapsed it emerged Sarkisyan’s family had loans for virtually all of their business projects — even his parent’s tiny alcohol company. One of Sarkisyan’s lottery brands owed more than four billion roubles ($45 million) — or more than 12% of all the bank’s overdue loans.
The lottery monopoly brought new levels of wealth to Sarkisyan. Annual revenues approached 100 billion roubles ($1.1 billion), and net profit ran close to one billion ($11 million) — reaching a high of two billion in 2019. Real profit may have been higher, hidden in other lines of the company’s reporting, Vedomosti has suggested.
The ‘Lottery King’ diversifies
Once his hold on Russia’s lottery industry was secure, Sarkisyan started branching out, registering the S8 Capital investment group in 2015.
Annoyed at the media’s depiction of him as Russia’s “lottery king,” S8 hired a company last year to change his image, an employee told The Bell. His media team now portrays him as a major investor in the IT startup space. S8’s investment in four IT startups chalked up a net loss of more than one billion roubles ($11 million) in 2022.
Sarkisyan also has interests in the Russian bookmaking industry, where he used his firms as leverage to gain yet more powerful connections. For instance, Sarkisyan sold a stake in the 23bet.ru site to Umar Kremlev, the most influential person in Russia’s betting industry, and in 2022 sold a dormant company that had a gaming license to the former son-in-law of Prime Minister Mikhail Mishustin. “He was strengthening useful ties. Sarkisyan is always happy to help good people,” a source told The Bell.
Sarkisyan needed good relations with Kremlev, who has connections to Vladimir Putin and now heads the International Boxing Federation, to grow and diversify his other business operations. Between 2019 and 2023 Kremlev was gaining significant control over the Russian lottery market, seemingly at the expense of Sarkisyan. However, sources told The Bell this was not a corporate conflict, but rather a coordinated move, with Sarkisyan and Kremlev working as a team. Sarkisyan ceded some of the lottery market to Kremlev in return for guarantees “at the highest level” over his other, rapidly developing, business interests.
Sarkisyan’s first public move to buy up the assets of Western firms leaving Russia came in July 2022, when one of his investment vehicles bought the Russian assets of US lift maker Otis. Kommersant reported it was a 3 billion rouble ($33 million) deal, though public accounts suggest it cost him 5.27 billion roubles ($59 million). Sarkisyan received a factory in St. Petersburg, another facility near Moscow and a maintenance service network. Otis had valued the assets at nine billion roubles in its 2021 financial statements.
As with his previous deals, Sarkisyan was helped by his influential network. The takeover was financed by a subsidiary of Dom.RF — headed by Vitaly Mutko, the former sports minister and long-time acquaintance of Sarkisyan — two sources told The Bell.
Private players had for years been pointing to Dom.RF’s attempts to take over the Russian lift market. In conversations with colleagues, Sarkisyan has said he wants to work with Mutko’s Dom.RF to gain control of three quarters of Russia’s elevator market, sources told The Bell. The pair are “coordinating” an exact plan for how to do so, the sources added. For instance, Mutko has called for developers to buy Russian elevators and announced plans to replace 85,000 lifts — a potential 85 billion-rouble buying spree. They appear to be wasting little time. In October 2023, Sarkisyan acquired the assets of Finnish lift maker Kone in another deal that sources told The Bell was financed by Dom.RF.
The Kone purchase also showed the vast profits that could be made in acquiring foreign assets following new laws that enforced mandatory discounts on the sale of Western assets. Kone’s assets were worth more than Otis’ — over eight billion roubles ($90 million) — but Sarkisyan paid just 500 million to 1 billion ($6-12 million) for them, according to Kommersant.
Prior to the deals, Sarkisyan courted the Russian managers of his target companies, promising them increased income, a stable flow of government orders and better career prospects, his associates told The Bell. For instance, Otis’ former Russian director became the head of successor company Meteor Lift and is now the face of the company, meeting with the governor of St. Petersburg, speaking on panels at SPIEF and giving media interviews.
Tyres and Spare Parts
Alongside working with Mutko to corner Russia’s elevator market, Sarkisyan has also moved heavily into the tyre industry.
After buying the Russian assets of Continental and Bridgestone, Sarkisyan is now the number two player in the sector, just behind Tatneft. The former lottery king also bought some assets from Germany’s Bosch — factories making power tools, spark plugs and heating boilers in the Saratov region.
As with Otis and Kone, the deals had handsome discounts. Continental, whose assets were worth 22 billion roubles ($250 million), was bought for no more than 10 billion roubles ($110 million) Kommersant estimates, while Bridgestone, which valued its Russian business at 23 billion roubles ($260 million), cost 7-10 billion ($80-110 million), the paper suggested.
Sarkisyan also purchased the tyre makers using loans from a government bank — Sberbank, according to business registry data.
And once again, there is a link to the lottery king’s long-standing personal connections. Car dealership owner Varshavsky — an acquaintance that helped Sarkisyan get started in the lottery business — has also been active in buying up the assets of foreign car markers leaving Russia. After buying the Volkswagen plant in Kaluga and the Hyundai plant in St. Petersburg, Varshavsky could soon be Russia’s second largest automaker, assuming he is able to restart production. The pair will now be operating in the same industry.