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I sat down with Michael Calvey, one of the most successful and legendary emerging markets investors of our time. Mike moved to Moscow at age 27 in the early 90s and built Baring Vostok into a powerhouse with $10+ billion invested in Russia. They backed now-decacorns like Yandex, Revolut, Tinkoff, and Kaspi at their earliest stages. Yandex alone was a 450x return for the fund. Along the way, he survived a 98% market crash, was detained by Russia’s secret service, and made billions of dollars for his investors.
Originally from Oklahoma, Michael has lived more than 60% of his life outside the United States, and that permanent outsider-insider status has become one of his biggest edges. When he’s abroad, he explains America to foreigners. When he’s home, he explains the world to Americans. That ability to bridge cultures is what allowed him to thrive in Russia for three decades, and it’s the same dynamic now playing out across his portfolio of companies in different continents.
He’s also incredibly thoughtful about the ingredients of great founders, what separates the ones who win from those just chasing money, how the best companies constantly stack new S curves, and why being a hands-on owner but never a hands-on manager is the key to a great investor-founder partnership.
Building Baring Vostok and Investing Billions in Post-Soviet Russia
A 24-year-old kid from Oklahoma who accidentally built an emerging markets powerhouse. Michael Calvey never planned to invest in Russia. At 21, his ambition was to become the governor of Oklahoma. He took a job at Solomon Brothers on Wall Street expecting to stay there for a couple of years, learn some business basics, and head back home. But when his boss left to join the newly formed EBRD (European Bank for Reconstruction and Development), Calvey followed him to London and started traveling to the former Soviet Union in 1991. He was 24 years old. Moscow in those days was the Wild East, a country that needed everything from a business perspective, and Michale fell in love with the process of working alongside entrepreneurs to build something from nothing.
In 1994, Calvey left the EBRD, moved to Moscow, and raised his first fund under the Baring Asset Management brand, a 400-year-old British firm that lent credibility to a team of twenty-somethings with no track record. Over time, Calvey and his mostly Russian colleagues built one of the tightest and most elite investing teams in global emerging markets. Partners like Mikhail Lomtadze and Elena Ivashentseva, went on to become some of the most successful emerging markets private equity investors in the world. By the end, Baring Vostok had roughly $10 billion invested in Russia, was backed by some of the most prestigious institutional LPs globally, and had created several companies worth $20 billion or more, mostly in fintech and technology.
But the path was anything but smooth. Roughly every seven or eight years, a massive crisis would hit. The first defining moment came in 1998, just after the first fund was fully invested: the Russian ruble devalued by four times, Russia defaulted on its sovereign debt, and the stock market fell by 98%. Because the fund carried no leverage and held cash reserves, Calvey was able to double down, increasing stakes from minority to controlling positions in his best companies and injecting capital that gave them a huge advantage over their struggling competitors. That fund, which could have been a total loss, ended up quadrupling investors’ money. It also enabled Baring Vostok to raise the only fund deployed in Russia between 1999 and 2003, the fund that invested in Yandex at seed stage for what became a 450x return. Being the last investor standing created a structural competitive advantage that gave Baring Vostok monopoly access to the best deals, the best talent, and the best terms in the market.
Over the following decades, the crises kept coming and the funds kept performing, generating massive distributions to LPs through 2008, 2014, and beyond. But as Russia’s relationship with the West deteriorated, so did the protections foreign investors once relied on. After a shareholder dispute in a portfolio company, Calvey was arrested and detained by the FSB, Russia’s successor to the KGB. The case made front-page news worldwide, and even Russian state media expressed outrage. He was eventually released and he even wrote a book about the experience. But life is full of ironies and, remarkably, the funds had their most profitable years during this ordeal in 2019, 2020, and 2021. But when the war began in 2022, everything changed. Holding Russian assets would toxify the firm’s non-Russian portfolio, and the exit model for Russian companies on international exchanges was gone for good. Calvey made the painful decision to sell everything. Today, Baring Ventures holds no Russian assets but still manages roughly $5 billion, including its stake in Kaspi, and the value created by new investments like Plata in Mexico has already offset the losses from walking away.
What makes great founders and great companies, and how radically different they can be from each other
There Is no single recipe, but the best founders share a few non-obvious traits. Calvey has backed Oleg Tinkov (Tinkoff Bank), Mikhail Lomtadze (Kaspi), Arkady Volozh (Yandex), and Nik Storonsky (Revolut), founders who could not be more different in personality and approach. But beneath those differences, he has identified three consistent traits.
The first is what he calls the “helicopter quality,” the ability to zoom fluently between big picture vision and granular detail without friction.
The second is intense competitiveness, not just wanting to win but wanting to beat competitors by a mile through love of customers.
The third is a genuine belief that they are building something revolutionary, not just making money.
For Mike, founders primarily focused on getting rich rarely succeed in the long run, because the best talent doesn’t join for compensation alone. They join because they believe they are part of something special. He also listens for language. If a founder defaults to “I, I, I” when describing their company, it’s a red flag. The best founders instinctively say “we.”
What I like about Mike’s perspective is his insistence that there is no single playbook for how these traits show up in a company’s culture. He compares Kaspi and Tinkoff as a case study. Both recruited from top STEM institutes, both were product-led and data-driven, but Kaspi was obsessed with Net Promoter Score while Tinkoff never believed in it. Tinkoff focused on profitability as a management KPI while Kaspi optimized for customer love. Both arrived at the same extraordinary outcome: the happiest customers in their markets and 80% returns on equity. Calvey has learned to never be dogmatic about organizational design as an investor. The key is not the specific method but that management is aligned to long-term shareholder outcomes.
He reserves special praise for Mikhail Lomtadze (check out our past interview with him here), whom he calls the most complete entrepreneur he has ever worked with and the only person he has encountered who possesses all three skill sets: (i) the analytical instincts of a great investor, (ii) the vision of a great entrepreneur, and (iii) the hands-on discipline of a great operating manager. Tinkov was a marketing genius. Volozh was a technical visionary who believed in billions when everyone else saw millions. Storonsky built a product at Revolut that everyone who uses it loves. But Lomtadze is the only one who has all three in one person, a combination so rare that Calvey did not even anticipate it when he first hired him for an investor role out of Harvard Business School.
The investor-founder relationship and how to be a great partner
Hands-on owner, not hands-on manager. Michael’s philosophy on working with founders is built around a simple principle: if an investor is making operational decisions in a company, it means the wrong founder is running it. At Baring Vostok, he developed what he calls the 3 Cs framework, the three areas where investors should always be engaged.
Capital allocation, where and how to deploy capital in the business.
Compensation, designing motivation systems that align management’s interests with long-term shareholder goals.
Conflicts of interest, anything that creates a tension between the company and its management.
Beyond those three areas, Calvey believes investors should step back and let founders run the business. He also strongly believes that good investors should adapt themselves to the founder, not the other way around. As an example, he points to his relationship with Nik Storonsky, Revolut’s founder, as an example: a very different dynamic than his partnerships with Lomtadze or Tinkov, but one he respected and adapted to because the results spoke for themselves.
But partnership, in Michael’s view, goes far beyond governance. It also means sharing pain. When problems arise at portfolio companies, Calvey is proud that founders call him (or his team) first, not because he can solve everything, but because they knew he wouldn’t hide from the mess. He estimates Baring Vostok solved maybe 1% of the problems while founders solved 99%, but being in the same boat and having skin in the game is what made the relationship successful.
Calvey also learned, through early mistakes, one of the most important lessons in portfolio management: don’t sell your winners first. He is a disciple of Warren Buffett and likes Buffett’s concept of watering the flowers and cutting the weeds, and warns that many PE firms, especially in emerging markets, do the opposite. Under pressure to generate DPI for their LPs, they sell their best companies early and get stuck holding the average ones for years.
The Yandex story is the ultimate manifestation of this philosophy. Google offered $100 million, then $250 million, and other shareholders wanted to sell. Baring Vostok exercised a veto right to block the sale. Six years later, the company went public at $8 billion and later grew past $20 billion and delivered a 450x return for the fund.
Building Plata in Mexico and the strategy of transplanting Tinkoff DNA into a new market
Global market dislocations create opportunities that no one can predict. One of the most unlikely: an elite group of Russian fintech operators, veterans of Tinkoff, relocating to Mexico City after the war in Ukraine to build Plata, a company that has quickly become one of the most exciting fintechs in Latin America.
Plata was not built with a small scrappy team. They assembled roughly 200 of the top 1,000 fintech specialists in the world, most of them Tinkoff veterans who had already built one of the most successful digital banks on the planet. Co-founders Neri Tolardo and Daniel Anisimov brought world-class experience in product, risk, and scaling credit businesses. But even with that unprecedented talent, the early results were loss-making. It took 18 months and 40 to 50 changes to the risk model, product structure, and feature set before the unit economics worked. Getting the right combination of features, price, and risk so that customers loved the product and it was also highly profitable required a level of iteration that no amount of prior experience could shortcut.
Once those economics clicked, Plata started to scale fast, reaching 3 million customers in roughly half the time it took Tinkoff. Michael Calvey attributes the speed to the team’s experience and to the fact that the branchless banking model has now been proven globally by Tinkoff, Nubank, and Revolut. That proof of concept also made wholesale funding easier to raise, since lenders worldwide now recognize these platforms as attractive when backed by the right team. Plata has now secured a Mexican banking license and is preparing to take deposits, echoing the same trajectory Tinkoff and many other have followed years earlier.
What makes Plata culturally unique is the fusion inside its Mexico City office. Russians are extremely direct, blunt to the point of appearing rude. Mexicans are diplomatic and less confrontational. At Plata, both sides are learning from each other, with Neri Tolardo, an Italian who lived in Russia and speaks both Russian and Spanish, serving as the cultural bridge. Calvey says the office has a palpable energy, with people working at velocity, following the data, and believing they are making a real impact. He is clearly excited about this company, and believes that even with Nu already established in Mexico, Plata has the team and ambition to overtake them.
Book Recommendations
“Odyssey Moscow” by Michael Calvey, a memoir about Michael’s own arrest and detention by Russia’s FSB after a shareholder dispute in a portfolio company. The book tells the story of his time in a Russian detention facility through the lens of his cellmates, people Calvey describes with deep warmth and humanity. He says you’ll cry on some pages and laugh on others, and that his biggest takeaway is that the system in Russia is rotten, but the people are incredible. If you know, you’ve probably heard me recommend this book over the last year.
“Medici Money” by Tim Parks, which Calvey describes as a history of the Medici family told through a business model lens. The book analyzes their accounts, profitability, and investment decisions across generations, revealing how they made money through commodity trade financing and interest rate spreads while depending on Vatican funding and loans to European royals. The insight he finds most fascinating is that Cosimo de Medici predicted his banking empire would be expropriated within 100 years because the model was unsustainable, so he invested in beautiful buildings instead. That’s why Florence is one of the most architecturally stunning cities in the world today. It took 70 years, not 100.
Unfiltered Q&A with Michael Calvey
Miguel Armaza: Tell us about your background.
Michael Calvey: Not at all. I grew up in Oklahoma, went to the local university, and my ambition at the time was to become the governor of Oklahoma. I was influenced by Ronald Reagan and his optimistic approach to politics, but also the impact he made on the economy. I got a job at Solomon Brothers on Wall Street, which was unusual for a kid from Oklahoma. They didn’t recruit there. I thought I would work on Wall Street for a couple of years, learn a little bit about business and investment, and eventually end up back in Oklahoma.
But my boss at Solomon left to join what became the EBRD, which was set up to invest in the Soviet Union. I ended up there. I started traveling to Russia in 1991. I was 24 years old. It felt like a historic change. It was a country that needed everything from a business perspective, and it was extremely exciting. It was also really fun being a young person in Moscow in those days. It was the Wild East.
I fell in love with investment. The process of working with entrepreneurs who have ambitions to build something, the feeling of partnership, sharing the problems and the stresses when things go wrong, but also helping to contribute ideas to making things successful and extraordinary. I realized that was my calling.
Miguel Armaza: Do you think the culture of oil and gas risk taking in Oklahoma, essentially a model very similar to venture capital, influenced your risk appetite?
Michael Calvey: Yes and no. It is a very entrepreneurial place. The whole oil industry was created around the carried interest concept. Someone who was a geologist or an engineer would believe in a discovery, go out and find three people to put up a third of the capital for a quarter of the equity, and keep a quarter for himself. People used to call these “third for a quarter” deals. Of course, when you have people promoting things like that, you end up with a lot of bullshitters who don’t really have the substance. But those that did created fortunes for their investors and for themselves.
One thing I would say is that the people who really got burned in Oklahoma were those who took on too much debt or invested using debt capital rather than equity capital. I’ve always grown up with an aversion to too much leverage. One of the reasons why our funds in Russia had an advantage is that we never leveraged ourselves at the fund level. The cardinal sin, the number one cardinal sin of emerging markets investing, is to borrow in dollars and invest in local currency, because it works in the short term and you always lose it in the long term. We avoided all those pitfalls. I’m sure my Oklahoma upbringing, having lived through some deep depressions when the oil price would crash and seeing the consequences, definitely made me more conservative in terms of leverage.
Miguel Armaza: Tell us about your journey building Baring Vostok, and the crises you navigated along the way.
Michael Calvey: When we raised our first fund, I was 27 years old. It was really with Baring Asset Management’s track record and brand, a 400-year-old British asset manager, that we raised that first fund, because we were all in our mid-20s at the time. Eventually, my Russian colleagues and I bought out Barings when ING acquired them. We kept the Baring brand, but it was really a very tight team of people, mostly Russian colleagues that I hired over time.
In hindsight, we had several partners within our team who became among the most successful emerging markets private equity investors: Mikhail Lomtadze, Yelena Ivashentseva, Alexei Kalinin, and several others. We were a tight team, very different personalities, very different areas of focus, but we worked well together. We all had skin in the game. Ultimately, we had about $10 billion invested in Russia by the end, some of the biggest and most prestigious limited partners backing us, and we created several companies that went on to become $20 billion plus businesses.
But it was not an upward escalator. About every seven or eight years there was a massive crisis where the currency would devalue by 50% or more. In year four of our first fund, just after we got fully invested, the Russian ruble devalued by four times. Russia defaulted on its sovereign debt, and the stock market fell by 98%.
Not having debt was a powerful lesson. We had some cash and liquidity in the fund. We were able to double down in three or four of our best companies, increase our stake from minority to controlling positions, and the cash we injected gave them a huge competitive advantage. Some of those companies went on to generate 20 times our money. That fund that could have been a dead fund ended up quadrupling the investor’s money. And it enabled us to raise our second fund in 2000, which was the only fund raised and invested in Russia between 1999 and 2003. That was the fund that invested in Yandex at seed stage. Yandex was a 450x return.
It was partly because we were the only people still standing. We were contrarian. We believed when everybody else was exiting Russia. And we were also able to recruit the best people in the market into our own team, because we were the only ones investing, and we had carried interest and all the motivation tools.
Miguel Armaza: You’ve changed your approach from diversified funds to highly concentrated investing. Why?
Michael Calvey: We’re not investing from institutional funds anymore. What we’ve been doing with new projects has mostly been investing our own money from our management company’s balance sheet and maybe raising some capital on a deal-by-deal basis. I really enjoyed raising and managing funds with third-party capital, but I don’t want to go back to that lifestyle. I’d rather do fewer things, but better.
I disagree with almost 100% of what Vladimir Lenin believed and said, but he had a couple of phrases that were brilliant, and one was: “Better, fewer but better.” The part of private equity and venture capital that I love the most is working with a small number of super ambitious entrepreneurs, being a great partner to them, learning from them, helping to share ideas, helping to solve problems, and really being deeply engaged. You can’t have the same level of conviction about 30 companies that you can have about five companies. I’d rather invest deeper commitment to a smaller number of companies. You get a little bit of diversification, but a lot more conviction.
Miguel Armaza: You’ve backed Oleg Tinkov, Mikhail Lomtadze, Arkady Volozh, Nik Storonsky. What do you look for in founders?
Michael Calvey: If there was a single recipe, it would be known and everyone would study it. Those five or six people could not be more different in terms of personality. Some are introverts, some are extroverts. But they’re all intensely competitive. They don’t just want to win. They want to beat the competitors by a mile, and when they beat them, they want to beat them even more, through love of customers.
When I talk to people the first time, I notice what I refer to as a “helicopter quality.” There are some founders who are big picture visionaries, but when you drill down into the details, that’s not their comfort zone. And there are others who are really comfortable in the weeds, but not very capable of zooming out. The truly great ones are good at both.
People who are mostly focused on making money rarely succeed in the long run. In the best quality businesses, you have to believe that you’re doing something special and different and extraordinary. The best people don’t come just for compensation. They come because they believe they’re doing something revolutionary. It’s also a team sport. Even though each of these people are very strong leaders, if people are mostly saying “I, I, I,” that’s a red flag.
Oleg Tinkoff is a marketing genius, a tremendous talent magnet. Mikhail Lomtadze is probably the most complete entrepreneur or manager I’ve ever met. The skills required to be a great investor, a great entrepreneur, and a great operating manager are three different skill sets. He has them all. He’s the only person I’ve worked with who really does have them all. Arkady Volozh was a technical visionary. Nick Storonsky built an amazing business at Revolut. He doesn’t work with investors as partners the same way I was used to with the others, but I think good venture investors should adapt themselves to the owner instead of the other way around.
Miguel Armaza: If they are radically different people, that has to manifest in the culture of the companies. Tell us about those differences.
Michael Calvey: If I compare Kaspi and Tinkoff: similar people joining from similar backgrounds, coming from the top math and physics and science institutes, genius people walking around the offices of both companies. They’re both product-driven, product-led businesses, organized around products, working backwards from what they’re aiming to achieve.
But they have a completely different approach to KPIs. Kaspi is obsessed with Net Promoter Score. Tinkoff never believed in Net Promoter Score, and yet they had the highest app ratings and some of the happiest customers. Tinkoff was more focused on profitability as a KPI. And yet Kaspi and Tinkoff got to the same endpoint: the happiest customers, the best customer experience, and 80% returns on equity, with a completely different approach.
That’s why I’ve learned to not be dogmatic. I don’t think there’s a single recipe for organizational motivation systems. The key is to make sure that managers are aligned to objectives that are going to improve shareholder outcomes. It’s humbling to realize that there’s not just one method.
These are also companies that are anti-complacent. They had a certain plan, but they achieved it early. By the time they’d achieved it, they’d already come up with another plan. They constantly thought of ways to keep raising the bar, expanding the TAM, opening up white space. And it has to be fun. You get a sense with extraordinary companies that people are just having fun being there every day. You certainly get that sense at Kaspi, you used to get it at Tinkoff, and I feel it absolutely with the Plata team in Mexico now.
Miguel Armaza: How do you approach working with founders? What areas do you get involved in?
Michael Calvey: We always at Baring Vostok used to try to position ourselves as a hands-on owner, but not a hands-on manager. If we’re making operational decisions in a company, it’s a sign that there’s the wrong founder and the wrong management team. But there are three areas, and I refer to them as the 3 Cs, that we would always be engaged in, and I think those are really owner’s questions.
The first is capital allocation: where do you allocate capital in the business? The second is compensation: how do you create motivation systems for management where their interests are aligned to long-term shareholder goals? And the third is conflicts of interest: anything that involves a conflict between the company and the management should be something that shareholders have a say in.
We had an advantage over most of the global firms trying to invest in Russia from afar, because we were the same age, the same mentality as the founders we were backing. We were living in the same market. We spoke Russian. We laughed at the same jokes. We felt like we were the same species of animal. Partnership means sharing pain. When problems would come up, I was proud that our founders would call us first. We couldn’t always help, but they felt about us that you don’t hide problems from partners. You share problems with partners, and you try to work it out together. We solved 1% of the problems, and they solved 99%. But that’s important for the concept of partnership.
Miguel Armaza: Google offered to buy Yandex for $100 million. Then $250 million. You said no both times. Tell us that story.
Michael Calvey: We learned through some early mistakes, where we exited a couple of our better initial investments too early. Warren Buffett has this concept of watering the flowers and cutting the weeds instead of the other way around. The problem that a lot of PE firms have, especially in emerging markets, is they’re under such pressure to generate DPI for their LPs that they sell their best companies first, and they end up with the average companies long term. You really want to sell your average companies fastest and make your winners count.
Google approached Yandex and offered to buy the company for $100 million, which would have given us seven times our investment. We rejected it. They came back a year later and offered $250 million, a 20x return by anybody’s standards. We listened to Arkady, who believed the potential was in billions. Nobody was thinking about $20 billion yet, but he definitely believed it was worth billions. We backed him. We continued to believe him.
We actually had to exercise a veto because some of the other shareholders wanted to exit. We had to exercise the veto right to block the sale. About six years later, the company went public at $8 billion market cap, and later grew to more than $20 billion. And all of those people who wanted to sell the company for $250 million had developed amnesia, and they were appearing on Bloomberg and CNBC boasting about being early investors in Yandex. But actually, they were the ones who wanted to sell when Google tried to buy it for $250 million.
Miguel Armaza: You met Mikhail Lomtadze because you hired him, and he ended up becoming CEO of Kaspi. Tell us about that.
Michael Calvey: He had reached out to me through a couple of people. I was always busy, but I agreed to meet him when I was flying back to Oklahoma with my family at Christmas time. We stopped over at an airport hotel at JFK, and he came down from Boston, where he was at Harvard Business School. I met him for an hour, and I immediately liked him as a person. He’s got a wonderful laugh that only an honest and happy and driven person can have.
His mix of perspective and vision, but also ability to drill down in details. A lot of the best technology entrepreneurs are also just really good, sound business people. You can tell from their previous background that they had built businesses that were low-tech but just really spot on in terms of delivering a great proposition for customers. I also knew it would be a pleasure to work with him every day. It was a one-hour meeting, and I knew immediately he would be a great guy to be on the team.
When we first invested in Kaspi, it was with a different management team. After about a year and a half, things weren’t going well. Mikhail came to me and said, “Look, I kind of got us into this, and it’s a mess. I’ve offered to step up as the CEO. I’m ready to move to Almaty and take over for a year as an interim CEO.” There’s a Russian expression: “There’s nothing more permanent than an interim president.” That was about 20 years ago. He really thrived in that role. It’s so unusual for someone who had proven himself as a very successful private equity investor to also have the ability to go in and take over as a strong operational manager. But he also proved to be a very charismatic individual, with his TV presence and ability to stand up in front of 10,000 people and inspire them. Sometimes the unknown unknowns of investment can be happy surprises when you back people with great raw material.
Miguel Armaza: What is harder, building a credit-driven financial institution in Mexico or in Russia?
Michael Calvey: Plata has had an advantage because the people that came there were people who had already built one of the most successful fintech companies in the world. They had experience in developing products at the highest level of quality anywhere in the world. But every country is different, especially when it comes to credit. Even taking 200 out of the top 1,000 fintech specialists in the entire world as the initial team for Plata, even then, it took 18 months to develop the model based on testing and iterating, where we got the unit economics really working properly.
The initial results were loss-making. It took 40 or 50 changes to the risk model, to the approach, to the product structure, to the features, getting the combination of features versus price versus risk so that customers loved it, and you had loyal, sticky, happy customers, but it was also very profitable. There’s a tremendous amount of data and learning behind that. But now we have it, and the company already has about 3 million customers. We reached 3 million customers in about half the time it took Tinkoff. I think that’s because the team already has all that experience, and also because the world has seen the success of that model.
At the time we originally invested in Tinkoff, nobody had proven yet that you could attract deposits with a purely online bank having no branches. It’s hilarious to go back and look at our original investment memo, where the questions were: will we be able to fund the business with deposits, or is it going to always be reliant on wholesale funding? The answer now is, of course you can. Now that that model has been proven, it’s also become easier to raise wholesale funding for such businesses, because lenders around the world realize that these are great platforms. We were able to scale up Plata using wholesale funding so far, and now we’ll shortly be taking deposits as well.
Miguel Armaza: Tell us your philosophy of managing geopolitical risk, because the places you invest in are not Switzerland.
Michael Calvey: I thought for the first couple of decades of my career that talent density was the most important thing and could overcome any problem. And actually, the results of Baring Vostok during those years seemed to validate that thesis. If you avoided obvious risk factors like too much leverage or borrowing in a foreign currency, the inevitable macroeconomic downturns were more opportunities than threats, if you had the right capital base and the right team.
But geopolitics is not the same as political risk. If you compare Russia to Mexico, Russia looks a bit better from a macroeconomic perspective. Its debt situation is better, its budget situation is better, it has a huge export surplus. But it has become a primary geopolitical competitor to the United States and has an antagonistic relationship with Europe. Mexico has problems with crime, bigger problems with crime than Russia does. But it doesn’t have the same sort of institutionalized, systemic risk that Russia does with its security services.
More importantly, Mexico and the United States are never going to go to war. These are countries that have to coexist, and they will coexist. Even under the stress tests that the relationship is experiencing today with Trump as president, both countries realize they have to coexist. As an investor, you don’t run the same risk of investing in a country that becomes toxic or sanctioned. Besides Russia, there are probably only two or three countries in the world which fit into that category. I’m not an expert in them, but I’m not investing in them either.
Miguel Armaza: What’s one habit that has made you a better investor over the last three decades?
Michael Calvey: Humility. Being able to quickly realize and recognize your mistakes and learn from them. Always make new mistakes. At Baring Vostok, that was part of our culture. People were encouraged to own up to their mistakes and admit them quickly, learn and correct. That’s essential in any kind of investment profession.
Miguel Armaza: In 10 years, which is a bigger company, Kaspi or Nubank?
Michael Calvey: Kaspi has already stacked a couple of S curves, and now they’re in the process of stacking another big one by their expansion into Turkey. There was an example several years ago when Mercado Libre started to lose market share to Amazon, and they started to invest heavily in logistics, last mile, and financial services. The market didn’t like it. Profits were affected, the share price went down. But it proved to be exactly the right strategic move. They now have an unbeatable last-mile infrastructure across the key markets of Latin America.
I believe that three years from now, people will look at this period in Kaspi and say they just stacked a brilliant S curve by their move into Turkey. But it’s going to take another year or so before anybody will see that in the markets. It takes courage on the part of a founder and CEO to do something that in the short term may not deliver immediate results, but which in the long run is going to pay off.
Miguel Armaza: If you were starting over right now, late 20s, early 30s, what would you do?
Michael Calvey: There are so many different things you can do now. In comparison with when I was 21, there are more opportunities to become an entrepreneur directly, to raise capital from venture investors. There were probably only 20 or 30 venture funds in the entire United States when I was that age. Now there are 20,000 or 30,000, and they’re so specialized. It’s definitely a great time to start businesses as an entrepreneur. That’s probably what I would do if I was that age.
But I’m very happy with my life and where I am right now. I still feel a lot of energy. I’m at a stage in life where I only choose to work on things if it’s people that I really like and I just enjoy spending time with. I’m trying to do fewer things, but do them better. And I’m excited about what the next 10 or 20 years is going to bring.
This interview has been edited and condensed for clarity.
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