Meet The New Billionaire Behind Kazakhstan’s Surprisingly Hot Brokerage

33-year-old Russian Timur Turlov owns the lion’s share of a U.S. list­ed stock bro­ker­age tar­get­ing clients in coun­tries like Russia and Kazakhstan.

Timor TurlovMaxim Shemetov/Reuters/Newscom

Timur Turlov has made a for­tune tied to the stock mar­ket. But when the usu­al­ly sto­ic Russian native is asked his thoughts about trad­ing shares in GameStop, the video game retail­er made red hot by Reddit day traders? He smiles, then rolls his eyes. “It’s too volatile. It’s bad for busi­ness in the long term.” 

The 33-year-old’s busi­ness is sell­ing stocks to retail investors—an activ­i­ty that has made him incred­i­bly wealthy. Shares of his Nasdaq-list­ed bro­ker­age firm, Freedom Holding, rose a mete­oric 200% in the year through ear­ly March, and enough to make Turlov a new­com­er to Forbes’ list of the World’s Billionaires, ranked No.1,517, with an esti­mat­ed net worth of $2.1 billion. 

Turlov owns 72% of Freedom Holding, which is head­quar­tered in Almaty, Kazakhstan. It had some 200,000 cus­tomers and rev­enues of $122 mil­lion in the year through March 2020. Freedom Holding—which has sev­en Freedom Finance sub­sidiaries sprin­kled across Europe, Central Asia and the U.S.—is some­what like Charles Schwab or oth­er plat­forms that give every­day peo­ple access to invest in the stock mar­ket, except it’s aimed at pro­vid­ing cit­i­zens of the for­mer Soviet bloc invest­ment oppor­tu­ni­ties in U.S. stocks and IPOs as well as access to stocks on oth­er glob­al exchanges. 

Revenue surged to $126 mil­lion in the six months from April to September 2020. And the stock has soared, tripling between March 5, 2020 and March 5, 2021. On April 12, it was trad­ing at a hefty 13 times trail­ing rev­enues, with a $3 bil­lion mar­ket cap­i­tal­iza­tion. The surge, accord­ing to a February Bloomberg arti­cle, came about in part because Freedom Holding offered clients bet­ter access to American IPOs like Beyond Meat or Snowflake if they pur­chased more shares of Freedom’s own stock, along with heat­ed con­sumer inter­est in retail trad­ing. Russia in par­tic­u­lar has seen a spike in retail traders in 2020, accord­ing to Standard & Poor’s. 

But his bro­ker­age has some unusu­al fea­tures. Trades in the U.S. mar­kets are processed by an enti­ty in Belize that is sole­ly owned by Turlov. That enti­ty locks up investors’ mon­ey for as long as 93 days, a rel­a­tive eter­ni­ty in the fast-mov­ing world of stock trading.

Turlov spoke to Forbes about his life and busi­ness for near­ly two hours over Zoom in February. He was at the Almaty home he shares with his wife and six chil­dren, dressed in a light blue sweater, white but­ton down shirt and black wire rim glass­es. (Disclosure: Turlov is a for­mer con­trib­u­tor to Forbes Russia, a licensed edi­tion of Forbes.

Born in Moscow in 1987, Turlov grew up with­out his bio­log­i­cal father, who he says left the pic­ture when he was three years old. He has faint mem­o­ries of his father buy­ing him toys as a young child before he dis­ap­peared completely—and to this day Turlov says he remains on the country’s miss­ing per­sons list. The Soviet Union’s fall added tur­bu­lence to the back­drop of his child­hood, which includ­ed watch­ing Hollywood movies about the American mid­dle class. John Hughes’ Home Alone had a big influ­ence, Turlov says, and not for the elab­o­rate boo­by traps laid by Kevin McCallister, played by child star Macauley Culkin. “I want­ed to own the same kind of home” as the icon­ic house from the film, Turlov explains.

Hollywood movies also inspired him to work in finance. As a young teenag­er, he heard a friend of a friend was using his com­put­er to buy and sell stocks on the Russian mar­ket. “I remem­bered these Wall Street movies. And if you are doing some­thing with the stock mar­ket, you should be very, extreme­ly rich,” he says. Armed with $800 inher­it­ed from his grand­fa­ther, Turlov began his for­ay into the finan­cial markets.

Although he lost mon­ey on his first online stock trades, Turlov says in 2003 he felt con­fi­dent enough at age 16 to apply to a Moscow trad­ing firm as a part-time junior trad­er. Once employed, he says he went from school to work in the late after­noon so he could work until mid­night while the New York Stock Exchange was open. Turlov says he went to work as a trad­er at anoth­er bank in 2005 with the goal of build­ing access to U.S. mar­kets. He was 18 and mak­ing $1,000 a month, a decent salary for a young Russian trad­er, accord­ing to Turlov, but not as much as some of his more suc­cess­ful colleagues.

Then the glob­al finan­cial cri­sis struck in 2008. Turlov’s Moscow employ­er got clob­bered, he says, when the bot­tom fell out of local junk bonds pegged to the Russian ruble. He and all of his col­leagues lost their jobs when the bank decid­ed to shut­ter their depart­ment. “At that time, it was not so easy to find a new job,” Turlov recalls. “I made the deci­sion to start [a] firm based on our [exist­ing] cus­tomer relationships.”

This is where Turlov’s ori­gin sto­ry turns into American-style hus­tle. The firm that would become Freedom Holding was born with the help of a half dozen of Turlov’s col­leagues from the bank’s failed trad­ing divi­sion, who togeth­er con­tributed $100,000 to launch the new com­pa­ny. (Turlov claims he con­tributed the most start­up cap­i­tal, and lat­er re-mort­gaged his house to keep the busi­ness going.) That same year, Turlov earned his bachelor’s degree in eco­nom­ics and man­age­ment at age 20 from Moscow State Technical University and got married.

From there it was a three-year slog. By 2011, com­pe­ti­tion between Russian bro­kers grew intense, Turlov says, prompt­ing him to look for an eas­i­er path to grow busi­ness. That end­ed up being Almaty, Kazakhstan’s largest city and its for­mer cap­i­tal. As Turlov tells it, there were tons of Western-edu­cat­ed peo­ple in Almaty who weren’t yet trad­ing on the stock mar­ket, mak­ing the city a nat­ur­al fit for his grow­ing bro­ker­age. Business, he says, began to flourish.

As Freedom opened up shop in Ukraine, Uzbekistan, Kyrgyzstan and Germany, Turlov set his sights on America. “It was a very big dream for us,” Turlov says. “I had become deter­mined to become a pub­lic com­pa­ny that would be good enough to be trad­ed on [U.S. exchanges.] Because that’s the top of this busi­ness.” Freedom began the process in 2015 of a reverse merg­er with Bmb Munai, a for­mer pub­lic Kazakh oil and gas explo­ration com­pa­ny incor­po­rat­ed in Nevada. By then Bmb Munai was a shell cor­po­ra­tion, hav­ing sold its inter­ests off to a Hong Kong com­pa­ny. Turlov says a mutu­al friend intro­duced him to Bmb President Askar Tashtitov, who “invit­ed” him to go through the process of buy­ing the shell and relist­ing it on a U.S. stock exchange. (Tashtitov now serves as pres­i­dent of Freedom Holding.)

After years of paper­work, legal foot­work and mul­ti­ple rounds of fundrais­ing, Freedom Holding made its Nasdaq debut on October 16, 2019. Turlov says it’s the accom­plish­ment of which he’s the most proud. “Never in my first days of my career would [I have been] able to expect that we will become a stock trad­ing a mil­lion shares in a day,” he says. 

Turlov cel­e­brates Freedom’s debut on the Nasdaq in New York City.pho­to by Freedom Holding

Yet there are ques­tions about the enti­ty that Turlov owns in Belize, a stock bro­ker­age that process­es U.S. trades for Freedom Holding’s Kazakh and Russian clients. That enti­ty alone con­tributed a stun­ning 70% of Freedom’s earned com­mis­sion fees from stock trades for the first half of the 2021 fis­cal year, accord­ing to S&P ana­lyst Roman Rybalkin in a November 2020 note. “We believe that oper­a­tions in Belize are less trans­par­ent than those in the group’s domes­tic juris­dic­tions, which can con­tribute to com­pli­ance risks,” Rybalkin wrote. 

Turlov claims that he is sim­ply rout­ing U.S. stock trades through the Belize-based enti­ty because until recent­ly, Kazakh reg­u­la­tors didn’t allow them to per­form elec­tron­ic mar­ket trad­ing with­in the country’s bor­ders. He says the Belize accounts are in the process of being “trans­formed” (i.e. trans­ferred) onshore to Kazakhstan and Russia because local reg­u­la­tions around mar­ket access have eased. “Enough peo­ple have asked [about Belize] that it’s mov­ing high­er up as some­thing that needs to be addressed,” Freedom Holding’s cor­po­rate sec­re­tary Adam Cook told Forbes

Another crit­i­cism of the way Freedom does busi­ness is its manda­to­ry 93-day lock­up peri­od for invest­ing in IPOs. The pol­i­cy states that cus­tomers who receive shares at or before an IPO are forced to keep their mon­ey tied up in those stocks for 93 days before the IPO, which dif­fers from U.S. bro­ker­ages, which allow cus­tomers to place and can­cel orders until the IPO takes place. A December 2020 arti­cle by the Foundation for Financial Journalism crit­i­cal of the bro­ker­age described the IPO prac­tices as “unusu­al.” Asked about the long lock­up peri­od, Turlov replies via email: “As you are aware, IPO syn­di­ca­tion and ini­ti­at­ing an order­ly trad­ing mar­ket is a com­pli­cat­ed under­tak­ing.” He also says that Freedom’s meth­ods are sim­ply in ser­vice of their clients and partners. 

Freedom Holding con­tin­ues to expand. In late December, it spent $2.4 mil­lion to acquire Kassa Nova, a Kazakhstan bank, which offers con­sumer cred­it cards, along­side check­ing and sav­ings accounts. The bank was pur­chased from anoth­er bil­lion­aire in Forbes’ ranks: Bulat Utemuratov, who’s worth an esti­mat­ed $3.4 bil­lion. In Kazakhstan, Freedom also offers auto insur­ance poli­cies. As of January the com­pa­ny has its own seat on the New York Stock Exchange, thanks to the $2.5 mil­lion acqui­si­tion of bro­ker deal­er Prime Executions. That came with an office at Manhattan’s 40 Wall Street—a build­ing owned by Donald Trump, right around the cor­ner from the NYSE. 

A 2017 Bloomberg sto­ry report­ed that Turlov had a card­board Trump cutout for vis­i­tor self­ies in Freedom’s head­quar­ters. When asked about the cutout and if he was a Trump fan, Turlov expand­ed his cir­cle of admi­ra­tion. “We did have a cutout of Donald Trump in the office; now we have cutouts of Joe Biden and Elon Musk,” he wrote in an email.  “Each of these men has traits I believe are worth emu­lat­ing and I believe we can learn from each of them.”

As for the future, Turlov isn’t rul­ing out addi­tion­al acqui­si­tions. His biggest con­cerns, he says, are keep­ing up with com­pet­ing bro­ker­ages and main­tain­ing smooth oper­a­tions for Freedom cus­tomers, who have expe­ri­enced hic­cups in ser­vice over the past year due to an influx of new cus­tomers paired with Freedom’s work­force tran­si­tion­ing to remote work amid the pan­dem­ic. Millions of Russians opened new retail bro­ker­age accounts in 2020, per S&P ana­lyst Rybalkin. Turlov cred­its Freedom’s upsurge to mar­ket volatil­i­ty induced by the pan­dem­ic accom­pa­nied by low inter­est rates, paired with a larg­er cul­tur­al inter­est in investing. 

Our rev­enue was unex­pect­ed, even to me,” Turlov says. “It was some kind of mir­a­cle that we suc­cess­ful­ly built this com­pa­ny. We were lucky guys. We didn’t know it was sup­posed to be impos­si­ble. But now I’m under­stand­ing that it was a mir­a­cle that it hap­pened at all.”Follow me on Twitter. Check out my web­site. Send me a secure tip

Lisette Voytko is a wealth reporter at Forbes Magazine, focus­ing on bil­lion­aires, mon­ey and the world’s rich­est peo­ple. Previously on the Forbes break­ing news desk. She…

Lisette Voytko , Forbes

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