Putin's next challenge for Russia: win back investors

By Megan Davies and Douglas Busvine

ST PETERSBURG, Russia (Reuters) - President Vladimir Putin will court investors this week at Russia's answer to Davos, but one who will not be attending is Steven Dashevsky, a fund manager who is looking at diversifying away from the country.

Once optimistic about Russia, Dashevsky, who manages a $100 million hedge fund, has little hope for a new round of investor-friendly economic reforms.

He has been disappointed by the lack of progress in the past few years and is not expecting any change after Putin's inauguration for a new six-year presidential term in May.

"Talk is cheap - there's nothing they have done in terms of real market reforms or real liberalisations," said Dashevsky, founder and chief investment officer at Dashevsky & Partners.

"There have been so many false starts and so many missteps and so many missed expectations that investors' patience is wearing thin."

The St Petersburg International Economic Forum will be Putin's first face-to-face meeting with major investors since his re-election in March, a meeting which offers him a platform to showcase his plans for the next six years.

With Russian markets badly underperforming their emerging markets peers, it will be a tough sell for Putin, but aides say the tide of money leaving the country has more to do with Europe's debt crisis than any home-grown problems.

"European banks are closing their business all over the world to save themselves," Stanislav Voskresensky, Russia's deputy economy minister and the main organiser of the meeting, told Reuters.

Putin, Russia's paramount leader for the past 12 years, will be at the three-day forum only for one day, following his trip to a Group of 20 summit in Mexico and preceding a visit to Israel.

LESS TALKS, MORE ACTION

He is due to meet prospective investment partners who between them manage $1 trillion - such as TPG Capital's David Bonderman, Apollo's Leon Black