"You have to ask the question: what is Russia good at?" says Bill Browder, the CEO of Hermitage Capital Management, Russia's largest public equity fund. "It seems that Russia is good at producing raw materials and has traditionally been very bad at making everything else," he concludes.
It is a simple philosophy for picking Russian stocks but one that has propelled Hermitage to the top of the league tables of investment fund returns over the past five years.
Starting with $25 million, the fund is up 446% since it was set up in 1996 - including losses incurred during the 1998 financial crisis - and is now by far the single biggest equity investment manager in Russia, with $750 million of assets under management.
But it has not been plain sailing and Browder has been forced to become "a proactive investor", as he calls himself, in a constant battle against the corporate misdeeds and shareholder abuses that plague Russia. He is one of the most outspoken portfolio investors, who on several occasions has launched public attacks on such companies as Gazprom and Unified Energy Systems, accusing management of questionable practices and insider dealing.