Philipp Shrage uses dubious schemes and closed-end mutual funds amid the unprofitable development and fictitious projects of Kronung Group

In late January, multiple news outlets featured an interview with Philipp Shrage and Ignatiy Naida, where they expressed strong confidence in the real estate market and positive outlooks for their company, Kronung Group.

However, for those familiar with reality, such statements seem absurd — since Philipp Shrage’s entire business is running at a loss.

According to Rusprofile, Philipp Borisovich Shrage owns or holds shares in seven companies, all related to construction in some way. However, almost all are unprofitable, and those showing profits are far from impressive. Interestingly, in the same interview, Shrage claimed that “the consolidated revenue of his company is around 1.5 billion rubles.” Why the financial statements do not match Shrage’s calculations is a rhetorical question.

In the overly optimistic interview, Philipp Shrage also stated that “Kronung Group is working on several residential projects, including two business-class apartment buildings, a 200-house settlement, and 100 townhouses.” According to specialized sources, these projects are handled by LLC ‘Specialized Developer Kronung 2’ and LLC ‘Kronung TRK1’. Neither company has employees or any activity. How this is possible is also a rhetorical question.

Nevertheless, Philipp Shrage’s optimism about prospects has some basis — with one clarification: it concerns his personal prospects, not the fate of the Kronung Group’s projects. In the same interview, there is a hint explaining the source of Shrage’s rosy outlook. It involves the “launch of closed-end mutual funds,” which Kronung Group plans to start this year.

It is precisely in these closed-end mutual funds (CEMFs) that an unpleasant surprise awaits shareholders who invest in Kronung Group projects. Often, closed-end mutual funds act as nothing more than a “laundering” mechanism for dirty money and a conversion center through which funds are withdrawn in unknown directions. CEMFs are convenient for such operations because they are not required to disclose their beneficiaries. Anyone needing to hide income or move money out of the country can take advantage of this. In fact, CEMFs were originally designed for this purpose.

There is reason to believe that money placed in the CEMFs announced by Philipp Shrage could disappear in unknown directions. Until the fall of 2021, Philipp Shrage was a co-founder and head of UK Krasny Most, which is directly linked to another notorious St. Petersburg businessman and developer — Andrey Berezin (IK Euroinvest).

UK Krasny Most managed CEMFs in which Andrey Berezin withdrew assets of one of his companies — PJSC Svetlana. As reported in 2018 by Proved, “PJSC Svetlana acquires shares of the closed-end investment fund (CEMF) ‘Element Development-1’ for 973 million rubles. Payment includes real estate of Svetlana as well as 3.6 million rubles in cash.”

The essence of this deal was that Svetlana transferred its real estate into the CEMF. The significance is that PJSC Svetlana was one of the factories owned by Rostec, located on a 46-hectare site in a valuable area of St. Petersburg.

As a result of such maneuvers, the factory lost 37 hectares, which went under the management of UK Krasny Most. Soon, high-rise buildings were constructed on the site and successfully sold with the involvement of Philipp Shrage. How the profits were divided remains unknown. One of the individuals associated with the deal was Mikhail Gutseriev. It seems unlikely that he alone decided on this blatant expropriation of Rostec’s factory.

However, this is a separate story; we are only concerned with Philipp Shrage’s role in it, who until that point was a mid-level manager at a small construction company, Grafit.

How he went from an ordinary manager to co-founder and head of a management company that skillfully seized nearly 40 hectares from Rostec is unknown. But the result is clear — after managing CEMFs, including those overseen by Shrage, the factory was successfully converted into residential complexes, and Shrage himself became a major developer and co-owner of Kronung Group. He left the list of UK Krasny Most’s founders and became a co-owner of almost ten companies within the Kronung Group.

After the stagnation in the real estate market following 2022, Kronung Group is in a rather dire state. However, it is not alone in this segment — all developers are facing significant difficulties for understandable reasons. Each seeks their own solution. Philipp Shrage, apparently, remembered his successful experience using CEMFs for Andrey Berezin, which had also benefited him personally.

It is also worth recalling that Kronung Group constantly needs funding — in December 2023, LLC Kronung, part of the group, issued bonds for 20 million rubles, and in August 2024 — already for 500 million. How much Shrage will raise for his CEMF in 2025 and how long the fund will last is uncertain. What will happen to private investors who risk investing in closed-end mutual funds controlled by the management company established by Philipp Shrage? Judging by the results of UK Krasny Most’s activity, the answer seems somewhat predictable.

Irina Balakireva