Nikita Chirkov: Building an Investment Practice

Nikita Chirkov

Efficient and productive, this is what is desired from one’s time and finances whether you’re an individual or a company. Nikita Chirkov is particularly predisposed to recognize opportunities which maximize this. The professional community perceives him this way, as indicated by his membership in prestigious groups like the UK Business Angels, Campden Wealth, and status as a judge at the annual Unicorn Battle for international startups. In his role as Investment Director at UK’s Adeta Family Group (“AFG”), Chirkov provided financial/analytical support to its clients within Real Estate, Hospitality, Renewable Energy and Oil & Gas drilling sectors.

He explains, “After three years of Private Equity assignments, I realized that the team was doing a decent job with the value creation but we could do much better with the cash flow management. I was lucky enough to be heard and trusted by the shareholders to take up the challenge to build an internal investment department to manage the liquidity with a vision to build a successful private debt investment firm in the future.” Nikita’s implementation of this system to improve the cash flow management yielded tremendous results.

What has been achieved stands as an example to other businesses about how to make the most of an opportunity as well as how to create a culture that values all voices. Nikita’s insight reveals that the human elements of business are essential to financial progress and the attainment of goals. 

In designing the investment practice, Chirkov was hyper aware that his calculations required the inclusion of a number of factors. Competition is quite high for attractive investment opportunities and necessitates a specific angle that is built on specialization. The incentives need to be designed so that both the investment team and the external business partners are a motivated driving force. While the investment processes must be fast, the investment team needs to be patient as they might receive their bonuses in a matter of years.

Choosing the perfect investors was as vital to success as the process itself. Nikita informs, “As an in-house experiment on a very limited budget, we decided to focus on co-investments with the best and learn from them. Gradually, we shaped our angle – be sharp, walk the talk, and act fast. We co-invested alongside strong local players. Due to our NDA, I cannot disclose who these are but I can say that given their deeply rooted knowledge of the local markets, quality deal flow, and strong negotiation power, they are well positioned to get access to investment opportunities and negotiate hard.”

One of the most beneficial parts of the strategy was to partner with strong co-investors until AFG became one of them. As a result, Chirkov’s team built a multimillion portfolio with 30+ investment projects consistently delivering double digit returns in EUR/USD/GBP with no defaults (despite COVID), and early redemptions.

One of Chirkov’s favorite success stories is the project codenamed “German machine.” A comprehensive but unified checklist was compiled and IT solutions were implemented to assess the market in real-time with standardized legal due diligence checks and a special light approval process for approving investments. Applied only to specific projects in certain markets, this led to AFG prominence as one of the fastest private institutional foreign investors. This high-tech approach might cause one to ponder how important people are in the process but Nikita is adamant that the human element is essential.

He relates, “Decision making is the key. Who makes the decisions and how objective are they? It’s important that you ignore titles and focus on what matters the most; seeing things through. We’ve taken steps to make certain that everyone has a chance to contribute regardless of their position. As an example, top management personnel refrain from indicating their position (directly or indirectly) before junior colleagues ask all their questions and start shaping up an opinion about the investment opportunity.

I believe the best way is a meritocracy based voting system where each voice counts but more weight is assigned to the person with a specific merit, knowledge or experience in a particular question. Experience and expertise must be considered but you have to be open to new and fresh ideas if you’re going to present something unique and innovative.”

Writer: Coleman Haan