Americas

Brookfield’s rose sits amid growing thorns

9 May 2024

The parent company’s $929 bln asset manager has a model rivals crave: a pure fee-earning machine with stable income. Yet it sits amid a web of listed entities and its fee structure is getting complex. As deals come to the fore, its unusual model will weigh on valuation yet again.

EQT strikes a deal for post-Covid tech hangover

9 May 2024

Despite a 75% premium, the buyout shop’s take-private of IT consultancy Perficient values it on par with peers thanks to a sagging share price. The collapse of giddy Covid-era tech valuations and deals has lingered enough for some buyers to swoop back in without overstretching.

Arm encounters the AI bubble’s ups and downs

9 May 2024

The $110 bln chip designer reported record revenue in the fourth quarter, but investors disliked a less punchy outlook. Big Tech’s AI-fuelled data centre land grab is powering Arm’s revenue and margins. But its toppy valuation means any perceived upset gets punished.

HSBC’s big pair of shoes will be hard to fill

9 May 2024

The surprise departure of boss Noel Quinn, who dramatically reshaped the firm, puts the globe-straddling bank on the spot: appoint a steward of its strategy from within, or a new thinker from outside? In this Viewsroom podcast, Breakingviews columnists debate the $170 bln choice.

New ASML CEO’s job is harder than it might look

9 May 2024

The $360 bln Dutch firm is the sole maker of machines that produce the most advanced chips for Intel and TSMC. New boss Christophe Fouquet effectively runs a monopoly. But he still faces risks from staff retention, China-US spats, and as-yet-opaque risks to ASML’s domination.

Reddit answers almost everything post-IPO

8 May 2024

In its first quarterly results since making a market debut, the $8 bln social-media site grew revenue 48% and swung to positive adjusted EBITDA from a loss. Boss Steve Huffman is addressing many concerns raised ahead of the listing, but the valuation remains questionable.

Financial elite go long American exceptionalism

8 May 2024

The US economy’s strength buoyed spirits at Michael Milken’s annual jamboree, where everyone from Elon Musk to Ken Griffin held court. More surprising is optimism that the streak has longer to run. It’s a bold consensus with inflation, deficit and property-loan threats lingering.

Securitization limbers up for the oddball Olympics

8 May 2024

The race is on to find esoteric assets that can be sliced, diced and sold to investors. Taco Bell receipts, IP addresses and Picassos have so far cleared the bar. While many buyers of the $150 bln-plus in unusual deals will recoup their gold, some may overstretch.

Total’s US re-listing idea could backfire

8 May 2024

The $170 bln oil major is considering decamping to the United States to court oil-friendly investors. Yet getting included in the big stock index would mean cutting French roots, and a valuation boost looks unlikely. Staying at home may also be better for its growing power unit.

Apple has a cash problem

7 May 2024

The tech giant produces over $100 bln of excess cash a year. An event showcasing a new pencil reveals its quandary. Investing in AI ventures may be necessary but is riskier for Apple than for rivals like Microsoft. But a rush gained through stock buybacks isn’t a long-term fix.

Basketball deal will help settle TV score

7 May 2024

Comcast is trying to steal NBA rights from rival Warner Bros Discovery for its Peacock streamer and NBC network. The indebted owner of TNT and HBO is probably tempted to pass up the $2.5 bln annual cost. But with live sports so pivotal for viewership, it would be a big miss.

How investing in news can make sense

7 May 2024

The media industry has been struggling since the digital era and VC-led initiatives like BuzzFeed and Vice failed. Yet betting on independent outlets can reap decent financial rewards, Harlan Mandel, who runs a specialised impact fund, tells The Exchange podcast.

Europe has little to fear as ECB and Fed part ways

7 May 2024

The European Central Bank is set to cut rates before the US Federal Reserve for the first time in its history. Hardliners warn that will weaken the euro and feed inflation. But the effects are likely to be muted. Besides, a lower currency helps exports more than it hurts imports.

Green spending strain boosts infrastructure buyers

6 May 2024

GIP, soon to be part of BlackRock, is buying Allete, an energy firm that is set to spend over $4 bln on clean power. Listed utilities’ funding costs are rising while green upgrades demand big outlays, a tasty opportunity for infrastructure funds with $350 bln of capital.

‘Be like Buffett’ mantra takes on new meaning

6 May 2024

Financial masterminds like KKR’s Henry Kravis aped Berkshire’s model by soaking up permanent capital. Yet their stocks have more recently bested the Omaha Sage, burnishing reputations that win plum deals. As Berkshire’s guard changes, New York firms may now overshadow the master.

College Inc gets Stakeholder 101 crash course

3 May 2024

From Columbia to UCLA, universities are grappling with violent protests over Israel and Gaza amid final exams and graduations. As ever, a lot of money is at risk. There’s a corporate blueprint for diffusing activists, but campuses cater to an even wider array of constituents.

Private equity giants choose their own adventures

2 May 2024

Blackstone, Carlyle, KKR and Apollo’s first-quarter earnings each illustrate a different central quest: sustaining the firm, fixing it, reshaping it or growing it. With a total $2.7 trln of assets, all four are hitting some new goals, but still have their own ogres to vanquish.

Trustbusters target poor man’s John D. Rockefeller

2 May 2024

Today’s energy producers wield far less clout than the industrialist’s Standard Oil, whose breakup shaped US competition law. By comparison, the FTC’s collusion case against Pioneer’s ex-CEO linked to the $65 bln Exxon deal is mostly symbolic. Robber barons lurk elsewhere now.

Microsoft’s AI land grab becomes costly power game

1 May 2024

The tech giant is splurging on artificial intelligence models and chips. Now it’s made a big commitment to buy renewable energy for data centres, enabling Canadian investor Brookfield to build a massive 10 gigawatts of capacity. It’s another long-term bet on nascent technology.

Anti-obesity drugmakers savor pandemic leftovers

1 May 2024

The main obstacle to Eli Lilly and Novo Nordisk selling more weight-loss treatments is the ability to produce them. It turns out Covid-vaccine infrastructure has useful capacity. Quickly solving supply concerns gives both a shot at bigger slugs of the potential $100 bln market.