Rich Russians Make London Their Playground

June 1, 2007 — -- A group of very rich Russians are becoming highly influential on the British economy, and the city of London might never be the same again.

In fact, the next time you visit London, you may notice a few new additions to its usual list of core attractions. Extravagances like chilled vodka and caviar are more popular, leading some English residents to a simple conclusion -- London is turning Russian. To some, the city is now called Moscow-on-the-Thames.

"If you took the Russians away, London would feel it in a very, very big way," said James Black, a public relations agent at Red Square Projects, a promotions company that specializes in the Russian market.

London has always been a bolt hole for Russians. Pre-revolution Lenin was in exile there. Anna Pavolova, the ballerina, relaxed there between tours. More recently, KGB dissident Alexander Litvinenko was mysteriously poisoned in London last year.

Today it's the oligarchs -- the businessmen made rich on the back of Russia's vast natural resources. They're the men who snapped up assets in the chaos and confusion of the collapse of communism.

Spending Sprees

Many Russians now have a stake in London. One in three high-end London properties sold last year were bought by Russians. Some of the players include Boris Berezovsky, who has lived for six years in a London pad worth $30 million; Oleg Deripaska, the aluminium king, who is only 39 but is worth $13.3 billion; and the most visible oligarch, Roman Abramovich, worth more than $18 billion.

Abramovich even purchased Chelsea, one of London's major soccer clubs -- a national institution. It's tantamount to moving to New York and casually buying the Yankees.

Abramovich pays out about $200 million a year in salaries for the global superstars that he has brought to London to play for Chelsea. If you're worth as much as he is, that staggering amount of money is basically pocket change. Soccer was of course invented in England, but Abramovich, with his cash, is reinventing the way the game is played, and other British clubs are struggling to keep up.

"I think Roman Abramovich was the first to show that there's business sense," said Aliona Muchinskaya, another PR agent at Red Square. "You know, that people stopped growing potatoes, drinking vodka, hugging bears."

Spend a Million Pounds in an Hour? 'It's Easy'

The Russian presence in London has expanded so earnestly that Elena Ragozhina, a former banker and a Russian now living in London, wrote a guide to London shopping for her fellow Russians.

"I started this tour guide like joke. How to spend £1 million (nearly $2 million) during one hour in London. It's easy," she said.

Ragozhina took ABC News to meet her friend, Gyunel Boateng, a Russian model who is now the face and marketing director of Moussaieff diamonds. She handles the growing number of Russian clients.

"I have quite a few clients that would sort of spend £20,000 once a month just because it's a nice new bracelet or pair of earrings, and it isn't highly expensive [to them]," said Moussaieff.

But why do the Russians come here to London? Why not New York, Geneva, Paris?

"We don't pay taxes for all money we have abroad, not like American people," said Ragozhina.

Settling In Is Easy

A lot of Russian men work in Moscow and commute to London on the weekends, and British residences don't require any taxes. Their kids go to school here. As for the language barrier, for some Russians, there isn't one.

"My daughter is speaking better English than she speaks Russian," said Natasha Chouvaeva. publisher of the Russian Courier newspaper. "My husband pursues all of the activities that a normal Englishman would do, like hunting and shooting."

In fact many Russians have enjoyed traditional English trademarks like Wimbledon and the ascot. During the years of communism many dreamt of English opulence. They spent cold nights reading English literature and watching television that painted pictures of a better life -- an English life.

Many Russians also have great respect for Margaret Thatcher. She embraced Gorbachev, famously proclaiming him as a man she could do business with. The Russians still love her for it.

Ronald Reagan and "Magnum PI" didn't exactly tickle the Russians' fancy as England did.

"Are you joking?" said Muchinskaya. "It was the Cold War. America was the biggest enemy."