Key Points:

The Bolshevik Biscuit Factory seems an unlikely place to start the story of a Taranaki boy who became a billionaire.

But Stephen Jennings kick-started his way to wealth at the Moscow plant.

It was 1992 and Russia had just opened its doors to the world after 70 years of communism.

Jennings, then 32 and working for consultants Credit Suisse First Boston, went to Russia for a six-week job: to privatise Russia's first-ever company.

There were no street lights, no neon signs, just one or two restaurants.

"It felt," says Jennings, "like we were driving into a very dark place."

For the free-market economist and former New Zealand Treasury official, the disintegrating Soviet Union had shadows everywhere.

Communism had collapsed, and while Jennings was there to help get capitalism in place - "people literally didn't know what private ownership meant".

Jennings and his colleagues needed to find, then persuade, a guinea-pig enterprise to sell, not easy when entrepreneurship had long been viewed as a crime.

They had to organise buyers too: the method was "voucher privatisation", which involved issuing vouchers to Moscow's 12 million citizens to trade for shares in the factory.

There were no laws in place to facilitate the sale, says Jennings, so "during the day we'd draft a decree and send a note to the president (Boris Yeltsin) saying 'if you want to meet your target for six weeks you've got to pass this presidential decree"'.

The factory sold for less than $1 million. Jennings had seen a similar factory sold in Poland for more than $100 million.

He saw the profits to be made. He also saw the way the world was changing, and that there were not just more Bolshevik Biscuit Factories, but many more countries like Russia as well.

The six weeks in Russia turned into 16 years. The company Jennings founded, Renaissance Group, is a major player in Russian finance.

It has Russia's top brokerage, investments including the Ukraine's biggest land-holding and Russia's biggest forest estate, and a consumer finance arm with 12,000 employees that provides credit cards and personal loans.

Jennings is now on to his next challenge: Africa.

Some believe Jennings could be New Zealand's richest man. Last month, Forbes magazine put his stake in Renaissance Group at $5.2 billion, much higher than previous estimates of his wealth at $1.6 billion.

He's a big name in the international business press. An article in British magazine Spectator quoted a fellow banker who called him "the only foreign oligarch in Russia".

Despite this, Jennings is still relatively unknown here in New Zealand.

He can even walk anonymously along Oakura beach, 12 kilometres southwest of New Plymouth.

That's about to change. Jennings, 48, is talking to the Weekend Herald because he believes New Zealand is "squandering" its potential. He's ready to give away his low profile here, saying he wants to pass on what he's learnt.

It is predictably and unashamedly free-market, but he doesn't just believe it - he's done it.

"It's easy to grizzle at the barbecue," says Jennings.

"I'd rather stand up and say what I think."

This week's economic meltdown will affect Renaissance Group, says Jennings, with "global contagion" of the worst crisis since the 1929 depression likely to affect all the world's markets.

But for Jennings, the developing economies where Renaissance Group works have strong underlying economies and good prospects for growth and, therefore, better prospects to weather the storm.

And, says Jennings "globally, investment banks are being decimated, so from a competitor's standpoint there's some reasonable things happening".

The financier had to beat Lehman Brothers and other international heavyweights to dominate investment banking in Russia. This week, Lehman, a 158-year-old firm collapsed, the biggest bankruptcy in United States history.

This reflects Jennings' theme about New Zealand: that the world is changing quickly, the emerging economies are on the rise, and the old guard of the Western economies and multinationals simply aren't nimble enough to go with it.

Jennings started his first job in 1984 at Treasury: a boiler-room of free-market economics.

"I believed in a lot of the myths and sacred cows about New Zealand and the New Zealand economy," he says. "Being told that agriculture shouldn't be subsidised and should stand on its own two feet was a pretty radical idea."

He credits secretary Graham Scott, and senior officials Roger Kerr (now executive director of the Business Roundtable), Bryce Wilkinson (economist) and Rob Cameron (investment banker) for teaching him "common sense".

He hit the free-market highway, working on "Telecom's deregulation, health reform, ports, airports, environmental resource management, deregulation, corporatisation, privatisation" in New Zealand and Australia.

He worked on electricity reform with American economist Vernon Smith - now a Nobel Prize winner for economics.

"Without being melodramatic, I saw it as making a difference," he says.

If so, going to Russia in 1992 would have been like doing God's work for Jennings.

He says the Bolshevik Biscuit Factory was the pilot for 5000 more privatised companies in the next three years - more than had been done in the rest of the world in total.

"There was a huge amount of dislocation, there was a huge amount of corruption, there was a huge amount of asset-stripping," Jennings says.

"You had to be a little bit crazy and have a medium-to-long-term view."

This view saw Jennings and a colleague break away from Credit Suisse First Boston to set up Renaissance Capital as an investment bank in 1995.

Russia was effectively a fire sale. Oligarchs like Roman Abramovich made a killing by buying the up the country's assets. Jennings knew them - they were his clients. Many are now either in jail or exile.

Jennings says Renaissance stayed clear of corruption, yet was also able to be accepted into the Russian circle. He somehow managed to play the perfect double game. "If you wanted to get into the oil industry or gas, or if you wanted to get involved in big state privatisations as a buyer, or if you wanted to buy big steel mills, then you are had to deal with corruption-type issues.

"But if you wanted to start an industry based on pure market transactions, you didn't face those same issues."

Just as Russia went through growing pains, so did Renaissance, nearly going under in 1998 when the economy collapsed and the Government defaulted on its debt repayments.

Jennings stayed on when others didn't. He's keep out of politics as much as possible, but kept connected people close to him.

He says the free market wasn't just good for him, it was good for Russia.

"As assets found their way into stronger hands, as private ownership caught on, then the people who owned these assets wanted the institutions and mechanisms to make these effective."

Jennings says Russia is easy to bag.

He is defensive about it, once criticising British Prime Minister Tony Blair for making a "rash statement" that investors would turn away from Russia because of concerns over democratic principles.

"All [Western commentators] can see is the historical issues and the existing problems rather than the trajectory they are on."

Jennings is Renaissance Group's chairman, chief executive and the main stakeholder as it expands to Africa.

His line is that if Russia was a once-in-a-lifetime opportunity, then Africa is a second-in-a-lifetime opportunity.

Renaissance has ploughed more than half a billion dollars into everything from real estate to banking, and plans to quadruple this investment.

He has just been in Ghana, Kenya and Zimbabwe, a day before the power-sharing agreement between President Robert Mugabe and his rival, Morgan Tsvangirai.

Zimbabwe looks good in Jennings' "medium-to-long-term view". It has resources, a good education system, "the best management in Africa, is in a high growth region, with a seven million-strong diaspora that will come back if things go well."

Jennings sees an economic reordering of the world coming - a "convergence".

"The poor and middle-class countries are going through a massive amount of growth, their incomes are catching with the relatively small number of people who live in the so-called rich part. In the next 20 years, two billion people will join the middle class."

He fears New Zealand could be left behind in this. That's why he's speaking out to the media now, and at the Business Roundtable's annual Sir Ronald Trotter lecture next month.

New Zealand, he believes, needs to become more open, with a more entrepreneurial culture and approach to life. It needs to embrace the opportunities in emerging economies, like he has. It needs to look at the way they are non-ideological and "wide-awake".

Jennings says New Zealanders tend to keep their thoughts to themselves.

So what is he thinking?

He sees New Zealand as dominated by "powerful interest groups". Asked to elaborate, he says, "the health area, environmental issues, the size of Government" and the way they are "sacred cows". One gets the feeling of unfinished business.

Where would he start? "We've had a lot of government involvement in many aspects of our lives. We have a very comprehensive and very generous and in my view, excessive, welfare system. That is an obvious place to start."

Jennings says too much government involvement entrenches "really dangerous values" and that "the mainstream" New Zealander would agree with him.

Won't many just see him as a Rogernome who became a billionaire pillaging his way around economies that didn't know better?

Jennings dismisses that as New Zealand's "labelling process".

"I'm not going to let anyone label me. What do they mean by Rogernomics? None of those policies have been unwound. Do they want to go back to a 66 per cent tax rate?"

Jennings, the man who sees what others can't. So what for New Zealand?

"If we don't change, the future is quite predictable. It is really more of the same: a continued downward slide in our relative income standards relative to the rest of the world and every other indicator going with that: social indicators, health indicators, cultural indicators, sporting indicators."

Jennings says New Zealand's Polynesian explorers had the values needed for the modern economic world - adventure, exploring, risk, pushing into the unknown - and that heritage is still there.

"I believe if you scrape a few layers of the top, and, to be colloquial, with a little bit of boot in the bum, we can reinvigorate those values."

Taranaki boy
Stephen Armstrong Jennings is a typical son of Taranaki. Born in Waitara's old maternity hospital, the farmer's boy spent his early years in Awakino, north Taranaki, then moved to Oakura, a beach village 12 km southwest of New Plymouth. He went to Spotswood College.

Bright spark
The tall (2m) rugby-lover studied business at Massey University and economics at Auckland where he graduated with first class honours. He went to work at Treasury, then Jarden Consulting, which became Credit First Suisse Boston, which sent him to Russia.

His wife, Tina Podplatnik, is at Oxford, turning her doctorate on the "rise of state corporatism in Russia" into a book. She has a collection of Russian art, and set up the Sotheby's auction house in Moscow. They have four children, aged 6 to 15.

Jennings says he usually gets back to New Zealand twice a year. He likes to surf a bit when he can. He has a $1.5 million home on Oakura's beachfront Messenger Tce, and a share in a bach at Awaroa inlet in the Abel Tasman National Park. He also has shares in a company here with Bill Trotter (son of Sir Ronald) who was the subject of a foiled kidnap plot in 2002. Jennings donated $20,000 to Don Brash before the 2005 election but says he does not know any current New Zealand political leaders, including John Key, and did not believe he should have too close a relationship.

Jennings' plays it down, but Renaissance Group needs international political contacts and Vladimir Putin, Colin Powell and Tony Blair are among them.

He's known to party hard: Renaissance Group once hired a 18th century palace and flew the United States waterski team in entertain guests with stunts on its lake.

He likes to keep his New Zealand links, and has had Moana and the Tribe to Moscow to teach the haka. London-based former All Black captain Sean Fitzpatrick works three days a week for Renaissance Capital.