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Former Major Investor in Russia Emerges as Crucial Wartime Creditor to Ukrainian State Entities
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Richard Deitz, the founder of hedge fund VR Capital who spent decades investing in Russia and other post-Soviet markets, has emerged as one of the most influential creditors of Ukraine’s state-controlled companies during the war.
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According to Bloomberg on May 18, VR Capital holds significant positions in the debt of Ukrainian Railways, Naftogaz, and Ukrenergo—companies central to Ukraine’s transport, energy, and wartime infrastructure systems.
The report describes VR as one of the most influential players in Ukraine’s corporate debt market as the country continues negotiations over restructuring billions of dollars in obligations amid ongoing Russian attacks.
Deitz began working in Moscow in the mid-1990s after joining Credit Suisse and later co-founded Renaissance Capital, an investment bank that became a major channel for Western investment into post-Soviet Russia. He later founded VR Capital in 1998 following Russia’s domestic debt default.
According to Bloomberg, Deitz said Ukraine’s political shift during the 2013–2014 Revolution of Dignity period convinced him to increase investments in the country while Russia was “sliding back into authoritarianism.”
By 2022, around 20% of VR Capital’s assets were deployed in Ukraine, according to Bloomberg. Deitz told the outlet that estimates placing the firm’s investments between $5 billion and $8 billion were “in the right range.”
The fund remained invested after the start of Russia’s full-scale invasion, when many international investors reduced exposure to Ukrainian assets.
“It was our judgement that following the start of the war markets had become excessively pessimistic about the ability of Ukraine and its companies to operate in some kind of functional capacity,” Deitz told Bloomberg.
Ukraine’s state railway operator Ukrzaliznytsia is currently negotiating with creditors over nearly $1.1 billion in international bonds, with more than $700 million requiring repayment or refinancing by July. The company stopped paying coupons in January.
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According to figures cited by Bloomberg, Ukraine’s rail infrastructure was attacked 1,195 times in 2025, exceeding the combined total from the previous two years. Naftogaz facilities were reportedly struck by 1,399 projectiles, including missiles and drones, over the same period. Ukrenergo, Ukraine’s state electricity transmission operator, is also continuing debt restructuring talks following its 2024 default.
VR Capital has played a major role in multiple restructuring negotiations involving Ukrainian state companies. The fund is known in financial markets for its aggressive approach to distressed debt negotiations.
“We are talking about money that was lent on reasonable commercial terms by investors. They didn’t start the war and also are worthy of consideration,” Deitz told Bloomberg. He added that refusing repayments entirely could damage Ukraine’s future access to international capital markets.
“There is a day when all of this will end and it is important for Ukrainian companies to have market access,” Deitz said. “If we all tear up the rule book completely it makes it more difficult to go back to having a normal relationship with the market.”
Some Ukrainian economists have publicly challenged that position. Maria Repko, deputy executive director at the Centre for Economic Strategy in Kyiv, told Bloomberg that “Survival is now more important to Ukrainians than a few hundred extra basis points on their bonds in the future.”
Earlier, Russian companies were reported to be sharply reducing investment activity amid high interest rates, falling profits, and growing economic uncertainty, with many firms shifting spending away from industrial modernization toward maintaining operations under sanctions and replacing Western technology with domestic and Chinese alternatives.
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