May 18, 2026
Richard Deitz, the founder of the hedge fund VR Capital, who worked in Russia for many years, became one of the largest creditors of strategic Ukrainian companies engaged in military and energy projects during the war. In the 1990s, he built the investment bank Renaissance Capital in Moscow, married, and lived in Russia until 2013. This investment bank was one of the main conduits for Western investment in Russia after the collapse of the USSR.
Deitz himself has been investing in Eastern Europe for over 30 years. In the 1990s, he focused on the Russian debt market, which was then actively purchased by foreign investors. In 1998, when Russia defaulted on its domestic GKO debt, he founded VR Capital and began working with distressed debt without his Renaissance colleagues. He says it was Ukraine’s political turnaround in 2013–2014 that convinced him to increase his investments in the country, as Russia was moving back toward authoritarianism.
By 2022, approximately 20% of VR Capital’s assets were placed in Ukraine. The company does not disclose the size of its investments. However, Deitz estimated the fund’s investments to be between $5 billion and $8 billion. VR Capital holds significant bonds of the railway company Ukrzaliznytsia and energy giants Naftogaz and Ukrenergo. All of these entities play a key role in Ukraine’s war-torn economy. International credit investors, lawyers, and traders call VR Capital the largest and most influential player in the Ukrainian corporate debt market. After the outbreak of the war, when many investors withdrew from Ukrainian assets, Deitz’s fund maintained and strengthened its position. “Markets have become overly pessimistic about the ability of Ukraine and its companies to function,” Deitz told Bloomberg.
VR Capital now exerts significant influence over debt restructuring negotiations. Ukrzaliznytsia is negotiating with creditors on international bonds worth nearly $1.1 billion, with over $700 million due for repayment or refinancing by July. In January, the company stopped making coupon payments. Last year, Ukrainian railways suffered 1,195 attacks, significantly exceeding the figures for previous years. Naftogaz facilities suffered 1,399 attacks last year. Ukrenergo is also a regular target of attacks and has still not completed its debt restructuring following the 2024 default.
Deitz admits that his approach is not well-received by many in Ukraine. The fund is known for its tough negotiating style and a reputation as one of the most aggressive investors in the distressed debt market. However, he rejects accusations that he is demanding money from the country during wartime without regard for the circumstances. “They didn’t start this war and deserve to have their interests taken into account,” he said. He believes that refusing to repay could deprive Ukraine of the ability to borrow from investors. “The day will come when all this is over, and it will be important for Ukrainian companies to maintain access to the market,” he said. “If the existing rules are completely destroyed, returning to normal relations with the market will become more difficult.”
Maria Repko, Deputy Director of the Ukrainian Center for Economic Strategy, believes that reputation in the debt market is not paramount: “Survival is more important for Ukrainians now than a few hundred additional basis points on bonds in the future.” She believes investors should be prepared for significant write-downs. Deitz himself insists that maintaining the rules of the game is also necessary for Ukraine’s post-war recovery. The IMF estimates that Ukraine’s financing gap in the coming years will amount to $136.5 billion, and the country’s recovery will require $588 billion.