The Russian billionaire who saw the crisis coming

By Mark Thompson and Robin Paxton

MOSCOW (Reuters) - In a few short months, Russia's business elite have seen their billion-dollar fortunes crumble.

Not Mikhail Prokhorov. He says he saw the crisis coming.

While many of his peers tap the Kremlin to repay debts incurred to expand their empires, the 43-year-old former banker and mining executive sits pretty on the $10 billion earned from the sale of assets just before the bull market turned.

"The whole world suffered from optimism. Like every system and every model, it has come to an end," Prokhorov, now widely regarded as Russia's richest man, told Reuters in an interview.

"It was inevitable the problems with real estate in the United States would touch the banking system."

Prokhorov, in the trademark pinstripes of the banking profession where he learned his trade, stands two meters tall. Flush with cash in a debt-laden market, he has snapped up half of leading Russian investment bank Renaissance Capital for only $500 million.

With many good companies over-borrowed, Prokhorov said he was prepared to refinance loans.

"I'm ready to refinance you: 51 percent on the table. This is the business for Russia for the time being."

Convinced other deals will arrive, he is in no rush, and instead must quell the entrepreneurial drive of young employees.

"What is the risk for me? It's to be too active," said Prokhorov, now sprouting a few grey flecks in his dark hair.

"If I can paraphrase Chinese philosophy: the good and experienced soldier needs to wait and have a look on the river for the good assets coming. The best thing now is to wait."

Russian stocks have plunged 70 percent from May peaks and the government has spent one quarter of its foreign exchange reserves propping up the economy. Falling crude prices promise further economic hardship for the world's No. 2 oil exporter.

Prokhorov's business model today, applied throughout his Onexim investment group, is to keep control of assets while staying debt-free. Mining company Polyus Gold (PLZL.MM), of which he owns 30 percent, always keeps $1 billion on its books.

"I will not, for the time being, invest in portfolio investments. You can't predict them," he said.

"The best investor is a strategic investor."