The news about the government’s creation of the Ukraine Development Fund, designed to attract private and public capital from all around the world for large business projects with the help of a financial giant from Wall Street, was widely reported in the mass media. As a reminder, on May 5, the Ministry of Economy of Ukraine signed an agreement with BlackRock Financial Market Advisory on providing support services. The ceremony of signing the agreement was attended by the President of Ukraine V. Zelenskyy. He noted that this is a ” strong signal of strengthening the investment climate ” and the huge “investment case” since the day of independence. At the same time, the managing director, Global Head of the Financial and Strategic Investors Group (FSIG) BlackRock and FMA Ch. Hatami called the signing of the agreement “a historic moment”. For the transparency and success of the project implementation, in addition to BlackRock, Ukraine attracts the best financial and consulting organizations in the world – JP Morgan and McKinsey.
! BlackRock is one of the largest investment companies in the world by the size of the assets with its headquarters in New York City. At the end of 2022, the company had $8.59 trillion in assets under management. At the same time, the company’s net income decreased by 12% and its assets under management decreased by 14% according to the results in 2022. The agreement with BlackRock was preceded by the signing of a Memorandum of Understanding (MoU) between the Ministry of Economy of Ukraine (“MoE”) and BlackRock in November 2022, which agreed to develop a special platform to attract private capital for the reconstruction of Ukraine and mobilizing investments in crucial sectors of our economy.
Will the BlackRock cooperation really provide large investments in Ukraine?
At the beginning of the process, it is impossible to give a definite (unequivocal) answer, but taking into account the previous experience of BlackRock’s work and the peculiarities of the agreement with Ukraine, certain forecasts can be given already now.
First of all, the signed documents do not mention investments so far, but only advisory assistance to the Ukrainian government from the Financial Market Advisory (FMA) unit, which provides support to financial and government institutions in consulting, analytics, capital markets and strategic advisory services. However, consulting from such a global giant at the first stage, on the one hand, will allow to set up the organizational process for the management of the fund, in particular with the involvement of professionals from Ukraine, and on the other – will become an additional motivating factor for potential investors to invest in Ukraine.
Secondly, according to O. Valchyshen, an employee of the Global Institute for Sustainable Development, a participant of Ph.D.  – of program in economics at the University of Missouri (Kansas City), the benefit for Ukraine from cooperation with BlackRock will be if the company is able to quickly attract investments aimed at creating the attraction of means of production and technologies that Ukraine cannot create on its own. It should be noted that BlackRock specializes in so-called portfolio investing, i.e. purchase of securities in order to earn on the growth of their value or dividends (or interest). So the company, as a rule, doesn’t include into the operational management of specific businesses or directly create new capacity.
Therefore, it is quite logical to predict that among the investors whom BlackRock FMA will help to attract, there will be mostly portfolio investors led by BlackRock itself. And given BlackRock’s current investment business model, there is a risk that the company will direct its activities in Ukraine to the search and purchase of real estate at low prices with subsequent resale (especially against the background of proposals to unblock a large privatization of state-owned properties).

This approach has prevailed in our country for the last 30 years and has not led to real economic growth.
So, against the background of certain risks, the option involving BlackRock to create an investment fund for the accumulation of private investors’ funds and the financing of Ukrainian projects is considered optimal. However, in order to adequately protect the rights of investors and the interests of Ukraine, it is still necessary to form an appropriate normative legislative framework, where monetization methods will be clearly prescribed and guarantees of compliance with the signed contract terms will be established. In particular, at the highest level, it is necessary to establish an algorithm for monitoring project implementation at all stages, controlling the targeted use of funds and protecting against corruption. In addition, all preparatory work and the regulatory framework should be worked out now, so that large-scale investment projects can be implemented immediately after our victory.
Only under such circumstances, there is confidence that the Ukraine Development Fund will work to its full capacity, and foreigners will be able to provide a flow of investments to Ukraine to support crucial sectors of the economy: energy, infrastructure, agriculture, production and IT.