- Heavyweight boxing legend Wladimir Klitschko has returned to Ukraine to fight against Russia’s invasion.
- Insider spoke to Kostya Kovalchuk, who is the investing chief of Klitschko’s family office, which manages $100 million.
- Kovalchuk listed Warren Buffett, Ray Dalio, and Terry Smith as three of his biggest influences.
Ukraine’s Wladimir Klitschko won more heavyweight title bouts than Muhammad Ali and Mike Tyson.
But the retired boxer is currently engaged in a different sort of fight right now — defending his homeland from Russia’s ongoing invasion.
Klitschko returned home last month to join Ukraine’s army alongside his older brother Vitali, a fellow former world champion who is now Kyiv’s mayor.
In London, Klitschko’s family office continues to run smoothly. KLIWLA allocates around 35% of its $100 million assets under management to Ukraine, and invests the other 65% internationally. It employs two staff in the UK, with another two based in Liechtenstein.
KLIWLA is headed up by Kostya Kovalchuk, who spent a decade in UBS’s oil and gas corporate advisory group and has known the Klitschkos for over 25 years. Kovalchuk, who still has several relatives based in Ukraine, told Insider the Klitschkos’ most important role would be as figures of hope.
"To see the brothers, as well as [fellow boxers] Oleksandar Usyk and Vasiliy Lomachenko defending Kyiv is incredibly inspirational for the people of Ukraine," the 37-year-old said in a recent interview. "Ukraine is ours - it's not Russia's."
KLIWLA doesn't manage any of Vitali's assets, given his political position as mayor of the Ukrainian capital. But Kovalchuk and the younger Klitschko brother are in regular contact as the crisis enters its fourth week - as they have been for the past five-and-a-half years, developing a portfolio of investments in commodities and disruptive technologies.
"Wladimir is optimistic, very entrepreneurial and always interested in meeting new people", Kovalchuk told Insider. "Whereas I'm the guy who's always looking for value or a particular niche."
Value investing
Kovalchuk allocates Klitschko's $100 million portfolio through specialist managers who better understand tech and commodities. He said the most important skill for heading up a family office is being able to absorb knowledge.
"I'm a highly-paid librarian - I read all day," he said. "I focus on investor letters, market research, raw equity data, and crypto white papers."
Kovalchuk described himself as a value investor. He and Klitschko try to invest in quality companies that are trading at an attractive price.
"Value investing isn't about just buying stocks when they're extremely cheap," Kovalchuk told Insider. "We are happy to pay high multiples for companies that are growing fast, but already have a profitable business model."
"We avoid hype stories that have no path to profitability over the next few years," he added. "Last year there was a SPAC boom, but we didn't touch them - we treated them as if they were radioactive."
Kovalchuk listed Warren Buffett, Ray Dalio, and Fundsmith chief executive Terry Smith as three value investing influences.
Klitschko's portfolio
Throughout his boxing career, Klitschko was nicknamed "Dr Steelhammer" because of his PhD in sports science. He also teaches a master's degree level course at Switzerland's St Gallen University.
That's encouraged him to invest in disruptive technologies.
"We like to concentrate on 'frontier technologies'," Kovalchuk told Insider. "We define those as something that isn't yet commercialized, may not be commercially viable within the next three years, but could be revolutionary in the long-term."
KLIWLA also invests in biotechnology, e-commerce, and video gaming as other disruptive tech plays. Kovalchuk told Insider that he's recently spent time researching cryptocurrencies and Web3 as well.
"At first I was very negative about crypto - I thought it was purely speculative," he said. "But then I realized that there are actually companies with good business models, and that tokenization is a revolutionary new way to finance tech projects."
Commodities also play a major role in Klitschko's $100 million portfolio. Kovalchuk said that he has held gold, silver, and oil positions in the past.
"There's a supply-side crunch right now on all sorts of commodities," he told Insider. "From my background in oil and gas M&As, it makes sense that we'd focus on those sorts of assets."
While Klitschko's actively-managed portfolio continues to perform well in a volatile market, Kovalchuk said that his long-term priority is to support the Ukrainian economy as war drags on.
"Market volatility often creates an opportunity for investors like us," he told Insider. "But that's no consolation when there is so much trouble back in Ukraine."