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48-649: Fridman describes the Indigo Era as a disruptive era driven by extraordinary levels of human creativity, where abnormally talented individuals and entities are able to realize new levels of human potential and economic achievement. It is "a new economic era where the main source of national wealth is no longer resource rent but the socio-economic infrastructure that allows every person to realise his or her intellectual or creative potential." But, according to Fridman – based on his observations of recent economic indicators, political and market volatility, and historical patterns – it

96-442: A country or region will no longer be a natural resource, but a social infrastructure that will allow everyone to realise their intellectual and creative potential. Therefore, he asserts that "The future Indigo economy is an economy of free people. And this means that the world will become more and more free." In November 2016 LetterOne launched a journal, Global Perspectives , as a platform to explore "the new emerging economic era,

144-526: A dashboard measuring six key assets: physical assets, natural capital , human capital , intellectual property, social and institutional capital, and net financial capital. Their essay stated that "GDP never pretended to be a measure of economic welfare", and proposed that the new measure should assess "the range of assets needed to maximise individuals' capabilities to lead the life they would like to lead"; this would include "financial and physical capital but also natural and intangible capital". They asserted that

192-502: A letter from a senior government official that the previous Energy Secretary's decision to require the sale of the North Sea fields "is not a judgement on the suitability of LetterOne’s owners to control these or any other assets in the UK". On 14 October 2015 LetterOne Group announced that it had agreed a deal to acquire German utility Eon’s interests in three producing Norwegian fields, located in

240-581: A new European exploration and production company, in May 2019. LetterOne held 33% of the shares, with the rest owned by  BASF . LetterOne invested £1 billion in the infrastructure company Upp in 2021,  and also in 2021, L1 Health acquired Remedica, a pharmaceutical company in Cyprus. In October 2021, Browne left LetterOne as well as his chairmanship of Wintershell Dea. LetterOne had $ 26.8 billion in equity at

288-442: A new way of measuring the economy in the 21st century that moves beyond the limitations of mere GDP measurements. Entrants were asked to submit an essay of up to 5,000 words answering the question: How would you design a new economic measure for global economies that fully acknowledges not only social and economic factors but the impact of creativity, entrepreneurship and digital skills? How should your new measure be used to improve

336-504: A variety of clients including public pension funds, international wealth managers, multinational corporations, family offices and funds of hedge funds. Jonathan Muir serves as LetterOne's chief executive officer (CEO), while Vitalij Farafonov serves as chief operating officer (COO). The LetterOne board changed significantly in early 2022 after the start of the Russian invasion of Ukraine, with all co-founders leaving

384-399: Is also an era that will generate winners and losers as lagging countries and groups fail to adapt quickly enough. In late 2016 LetterOne's Global Perspectives journal published an Indigo Index, ranking 152 countries on their ability to compete and grow as economies move away from being powered by natural resources to being powered by ideas, creativity, and digital skills. In 2017 it launched

432-416: Is between nations or within nations. Those left behind may be either emerging countries, or the average person – as opposed to the intellectual elites – within developed Western countries. Authoritarian leaders and authoritarianism often rise during periods of uncertainty and insecurity and economic deprivation. Fridman maintains however that in this ever-changing new economic era, the main source of wealth in

480-454: Is commonly called resource rent . It can also be conceptualised as abnormal or supernormal profit . In practice, identifying and measuring (or collecting) resource rent is not straightforward. At any point in time, rent depends on the availability of information, market conditions, technology and the system of property rights used to govern access to and management of resources. Rent can be categorised into different kinds depending on how it

528-414: Is created. In general one can distinguish three different kinds of rent, which can also occur together: differential, scarcity, and entrepreneurial rent. A landowner who holds oil or mineral rights to his property may transfer those rights under a license to another party. In exchange for allowing another party to extract resources, the landowner receives either a resource rent or a "license fee" based on

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576-435: Is unhindered by convention or the past. This new “Indigo” generation is now shaping tomorrow's economy and creating national wealth. I use the term Indigo because it has been used to refer to children with special or unusual abilities. This is an era where abnormally talented individuals and entities are now able to realize new levels of human potential and economic achievement. LetterOne's Global Perspectives website adds that

624-515: The North Sea . Norway’s oil minister said that approval would be handled ‘in the usual way’. LetterOne's first annual LetterOne Rising Stars Jazz Award was awarded in 2017. The firm's investment unit L1 Retail launched in December 2016.  Working with a $ 3 billion fund focused on Europe sans Russia, the unit initially acquired  Holland & Barrett , a healthcare retailer in

672-717: The World Bank , UNESCO , the CIRI Human Rights Data Project , the Center for International Development at Harvard University , and the Global Education Monitoring Report . The index sought to measure a country's entrepreneurial ecosystem, and therefore its potential to adapt and develop. Each country was given a combined overall Indigo Score, with 200 being the highest possible score. The 10 top-ranked countries were Sweden, Switzerland, Finland, Denmark,

720-425: The telecoms , technology , healthcare , and energy sectors , the firm has four main units: L1 Health, L1 Technology, L1 Retail, and  L1 Energy , all of which are supported by L1 Treasury Services, which manages the group's liquidity. LetterOne was set up LetterOne in 2013 as part of a broader new investment vehicle using the proceeds from the sale of TNK-BP . LetterOne had $ 26.8 billion in equity at

768-496: The Indigo Prize, to award new concepts of economic measurement beyond mere GDP as countries in the 21st century transition into economies where innovation, creativity, and digital skills are economic drivers. The competition is intended to "stimulate debate about factors currently measured, given evolving economies, technology and skill bases, and what should now be taken into consideration in official economic statistics that measure

816-1097: The Indigo era, from different perspectives, including education, religion, politics, economics, history and business" and to examine " global issues through the eyes of leading commentators and business people around the world". The inaugural issue contained articles by Fridman, Dominic Barton , Michael Bloomberg , Stan Greenberg , Carl Bildt , Vince Cable , Ken Robinson, Brent Hoberman , Alex Klein , Deirdre McCloskey , Yuri Milner , Nick D'Aloisio , Lynda Gratton , Parag Khanna , Ian Goldin , George Freeman , Ian Bremmer , and others. The November 2016 inaugural issue of Global Perspectives also published an Indigo Index, which rated 152 countries based on five key metrics for doing business as economies move away from being powered by natural resources to being powered by creativity and digital skills. The five metrics are: creativity and innovation, economic diversity, digital economy, freedom, and stability and legal frameworks, which were scored based on over 30 measures from published data sources such as

864-517: The Indigo shift. Fridman considers the growth of Indigo economies to be a paradigm shift; he states that the pace at which technology is developing is creating worldwide tectonic shifts, and predicts huge global change over the next five to ten years. He and other analysts predict that the growing economic gap between free, creative economies and groups in contrast to repressive, authoritarian, totalitarian, or tradition-bound economies or groups will widen and create resentment and hostilities – whether this

912-484: The Minerals Management Service. An example from Canada's northern territories is the federal rules on royalties for oil in border lands. The royalty rate begins at 1% of gross sales for the first 18 months of commercial production and increases by 1% every 18 months up to a maximum of 5% until initial costs are recovered, after which the royalty rate is set at 5% of gross sales or 30% of net sales. Thus,

960-471: The UK government not to force him to sell the newly acquired North Sea oil and gas assets. A senior western oil executive said the UK was entering "uncharted territory" by intervening publicly in a corporate transaction over fears of the effect of future sanctions against Russia. In October 2015 LetterOne sold its North Sea oil fields to Ineos, the chemical company, for an undisclosed sum. The Financial Times has since reported that LetterOne has been told in

1008-542: The UK, the Netherlands, Norway, Germany, Ireland, and Japan. The United States was 18th overall. The report also included three key findings: Creativity and innovation was the biggest overall driver of high scores; this accentuated the importance of fostering entrepreneurialism and lifelong learning and of investing heavily in people. Nordic countries scored particularly high on the Indigo Index, with three Nordic countries in

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1056-612: The United Kingdom, in 2017 for £1.77 billion.  LetterOne gained total control of Spanish retailer  DIA in May 2019  when it acquired 70% of its shares, after having first bought 29% in 2017. Also in 2019, the firm's unit L1 Health acquired the pet heath platform Destination Pet and was a founding investor in K2 HealthVentures. After receiving regulatory approval in nine countries, LetterOne merged its oil and gas businesses into  Wintershall Dea ,

1104-526: The United States, simple ownership of mineral rights is possible, and royalty payments to individuals are quite common. Local taxing authorities may levy a severance tax on non-renewable natural resources extracted or withdrawn within their authority. The federal government receives royalties for mining on federal lands, which is managed by the Bureau of Ocean Energy Management, Regulation and Enforcement, formerly

1152-527: The company in March.  Early that month, LetterOne froze the shareholdings of two EU sanctioned directors and co-founders,  Mikhail Fridman and  Petr Aven , and removed them from its board, leaving chairman Mervyn Davies in control of the firm.  Despite "repeated calls" from various figures in British politics for Davies to step down in light of the sanctioned directors, Davies stayed with

1200-522: The complex legal, political, and social systems, institutions, and changes that will support an effective free and innovative intellectual-resource economy. The freedoms, protections, and political and legal frameworks of developed Western countries rest on centuries-long histories, socio-political traditions, and mindsets, and therefore will be difficult to replicate quickly in emerging economies. Fridman singles out India as an emerging country that has adequate legal infrastructure and freedom to probably survive

1248-679: The distribution of income, and removing unproductive financial activity – before scrapping it entirely. Following her prize-winning essay, Coyle now leads the Six Capitals research project, funded by LetterOne, at the Bennett Institute for Public Policy at Cambridge University ; the project was inaugurated in January 2019 and explores social and natural capital. Haskel is professor of economics at Imperial College Business School . Rather than abandoning GDP, he proposed refining, updating, and extending

1296-401: The end of 2021, up from $ 22.3 billion the year prior. Among LetterOne's active investments in 2023 were the telecommunications companies  Qvantel , Upp, and Turkcell, the energy company Wintershall Dea, the retail chains DIA and Holland & Barrett, the health companies DestinationPet and K2 HealthVentures,  and the recycling company Plastic Energy. Also

1344-584: The end of 2021. Co-founders Mikhail Fridman and Petr Aven stepped down from the company in early March 2022, after the EU imposed sanctions on them in the wake of the Russian invasion of Ukraine. The board now includes Mervyn Davies , Jonathan Muir, Franz Humer , Richard R. Burt , and Wulf von Schimmelmann , with Davies serving as chairman and Muir as CEO. Among major investments in 2023 were  Turkcell ,  Qvantel ,  VEON ,  Wintershall Dea ,  DIA  and  Holland & Barrett . LetterOne

1392-450: The existing GDP measure. He proposed better measurement of services and intangibles, and direct measurement of the economic welfare being created by digital goods. His essay focused on the fact that economies have dramatically changed structure since GDP was originally developed, with more knowledge production, more digital goods, more free things and free information, and more intangible assets such as intellectual property. He also emphasized

1440-504: The firm and denounced the Russian invasion, stating he and the new board were "determined to ensure that the 120,000 jobs throughout the UK, US and Europe [funded by LetterOne were] protected." With Davies also making a point to the press of the sanctioned co-founders' "love and passion for" Ukraine and their Ukrainian heritage, the LetterOne board stated it would donate US$ 150 million to Ukrainian relief efforts. Although LetterOne itself

1488-540: The group's liquidity and financial investments, including private equity holdings. All units are long-term investors taking either minority holdings or full ownership of portfolio companies. Apart from particular sectors, LetterOne participates in private equity funds such as those operated by Pamplona Capital Management, a specialist investment manager that provides an alternative investment platform across private equity, fund of hedge funds and single manager hedge fund investments. They manage assets for

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1536-652: The health, size and growth of a modern economy." In an April 2016 article in RealClearPolitics , retitled and reprinted in May 2016 in the Jerusalem Post , and reprinted in November 2016 under the original title in LetterOne's Global Perspectives journal, Fridman wrote: We are entering a disruptive era driven by extraordinary levels of human creativity. A new generation of curious, strong-willed and talented individuals

1584-442: The importance of factoring in the environment, sustainability, and societal welfare, in addition to calculating the value of goods and services that are provided for free. Lassman, the recipient of the "Rising star" award, was a 19-year-old geography student at Durham University . Her entry proposed a "Global Integration and Individual Potential" index, which measures each nation on two levels: its value relative to other nations, and

1632-582: The inaugural Indigo Prize were announced on 25 October 2017. A joint first prize, £125,000 to be equally split, was awarded to two teams of writers: Diane Coyle and Benjamin Mitra-Kahn; and Jonathan Haskel , Carol Corrado , et al. A third place "Rising star" award of £10,000 was given to Alice Lassman. Coyle was professor of economics at the University of Manchester , and Mitra-Kahn is chief economist at IP Australia . They proposed radically replacing GDP with

1680-448: The indigo symbolism "embodies a breaking of the norm, something that is highly reflective of the new era that we are entering into, one that lacks convention and is driven by innovation." In a series of articles published in 2016, Fridman cites the recent extreme volatility in markets, and worldwide political change and instability, as signs of an emerging global shift. He notes two frequently cited prominent indicators of an economic shift:

1728-481: The individuals and their contributions within each nation. Resource rent In economics, rent is a surplus value after all costs and normal returns have been accounted for, i.e. the difference between the price at which an output from a resource can be sold and its respective extraction and production costs, including normal return. This concept is usually termed economic rent but when referring to rent in natural resources such as coastal space or minerals, it

1776-541: The intellectual and creative potential of each human being: "The world has entered a new era where the source of a nation's wealth is no longer natural resources. Intellectual capacity has now replaced land, raw materials and trade routes as the biggest source of wealth." According to Fridman, three interconnected factors are needed for successful Indigo companies and an Indigo economy: He notes that most emerging economies have focused on building physical structures (roads, buildings, cities, physical infrastructure) rather than

1824-596: The largest shareholder in the telecommunications company  VEON , in February 2022, LetterOne invested in H2scan Corporation, a California-based company that builds gas monitoring systems. As of 2023, the firm had four main business units: L1 Health, L1 Technology, L1 Retail, and  L1 Energy , the latter of which is an oil and gas investment company formed by LetterOne in 2015. All four units are supported by L1 Treasury Services, which manages

1872-480: The new statistics should focus on measuring changes in the stock of important assets, rather than flows of income, expenditure, and output. Tracking the evolution of stocks of physical assets, financial assets and liabilities, natural capital, skill levels, and implicit state liabilities would better measure the sustainability of the economy. Coyle and Mitra-Kahn also proposed interim improvements to GDP measurements – such as better measurement of intangibles, adjusting for

1920-595: The risks and profits are shared between the Government of Canada (as the owner of the resources) and the oil developer. This attractive royalty rate is designed to incentivize oil and gas exploration in Canada's remote frontier areas, where costs and risks are higher than elsewhere. LetterOne LetterOne Holdings S.A. ( LetterOne ) is an international investment business based in Luxembourg. With long-term investments in

1968-525: The sharp decline in prices of natural resources including oil, and the slowing of China's economic growth despite this decline in the cost of natural resources. He and other commentators also note the rise of populism and populist leaders and candidates, both right-wing and left-wing, as these changes occur. Meanwhile, companies like Apple and Google – digital and technological companies he calls "Indigo companies" – have replaced longterm traditional natural-resource or manufacturing companies such as Exxon as

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2016-478: The start of 2014, LetterOne had announced plans to invest in global oil, gas, telecoms and technology sectors. On 2 March 2015, Lord Browne was named executive chairman of L1 Energy , renouncing his other roles to focus on the newly formed oil and gas company. On 4 March 2015, the Secretary of State for Energy and Climate Change , Ed Davey , gave company co-founder Mikhail Fridman a one-week deadline to convince

2064-407: The top four and four Nordic countries in the top ten; this was attributed to their high rankings both in creativity and innovation and in freedom. And the lowest-scoring countries were beset with social and political problems, such as war , political turmoil , and corruption . In July 2017, LetterOne's Global Perspectives journal announced the Indigo Prize, to stimulate discussion towards finding

2112-410: The value of the resources sold. When the government owns the resource, the transaction often must comply with statutory and regulatory requirements. The calculation of the value of oil and gas royalties involves estimating future revenues based on recent production trends. A common method is to take the average monthly income for the last three months and use that as a basis for forecasting. In

2160-462: The way we measure GDP in official statistics? Entries were due 15 September 2017, and were open worldwide to groups or individuals over the age of 16, with entries particularly encouraged from people at academic institutions, businesses, charities, think tanks, consultancies, or other organisations. The award amount was announced as £100,000, with second- and third-place winners to receive £25,000 and £10,000. The judging panel included: The winners of

2208-451: The world's largest companies. Fridman observes that throughout history innovations, alternatives, and technologies have always overcome any perceived shortages of any natural resource. He therefore posits that the new "Indigo era", fueled by digital and technological resources, will be marked by a shift away from the struggle for natural resources and their perceived scarcity, to a reliance on ideas, innovation, and creativity and on supporting

2256-456: Was not sanctioned,  Andrei Kosogov ,  Alexei Kuzmichev  and  German Khan  all stepped down as directors later that month. Franz Humer  was appointed to the board as a replacement in 2022. The board of directors of the L1 Group is the company's highest decision making body and is responsible for setting the investment strategy and making investment decisions. In 2023,

2304-414: Was set up LetterOne in 2013 as part of a broader new investment vehicle using the proceeds from the sale of TNK-BP . As of 31 December 2014 assets managed by LetterOne amounted to approximately $ 25 billion. The sources of these assets were funds from the sale of TNK-BP, but also from assets invested in prior to the L1 Group's formation. These include VimpelCom , Turkcell and private equity investments. By

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