One thing to start:
McKinsey is considering spinning off its in-house asset manager MIO Partners, which invests the private wealth of the consulting firm’s senior staff and alumni. The unit has been dogged by years of controversy over potential conflicts of interest with the firm’s consulting work.
And a scoop:
The Trump administration’s embrace of cryptocurrencies is fueling a speculative mania that could cause "havoc" when prices collapse, according to an investor letter seen by the Financial Times.
Welcome to Due Diligence, your briefing on dealmaking, private equity, and corporate finance.
SoftBank plots its OpenAI affair
Masayoshi Son has been laying low in recent years, rebuilding the strength of his tech conglomerate SoftBank. DD has missed his often adventurous financial forays. Masa has been circling the AI craze with relative quiet, but finally, he’s within grasp of securing a seat at the table of Silicon Valley’s great investment craze. SoftBank is in talks to invest as much as $25 billion in OpenAI, the darling of the AI frenzy. The deal would make the Japanese group OpenAI’s biggest financial backer.
The investment would be part of a bigger funding round of about $40 billion at Sam Altman’s company, which would push the ChatGPT-maker’s valuation to $300 billion, the FT reported late on Thursday. Masa’s known for majorly leveraging up his investments (one banker in 2019 said there were "layers of leverage upon leverage"). This cuts two ways: when things turn sideways, they implode. But a good call can lead to massive payouts. When it comes to AI, is Masa buying in at the end of the cycle?
Stellantis gears up for Trump’s America
Just before Donald Trump’s inauguration, the scion of Italy’s billionaire Agnelli family, John Elkann, joined a swelling list of high-powered executives to visit the returning US president. As ever with Trump, a deal was on the cards. Days later, the Dodge and Jeep maker Stellantis, which Elkann chairs, committed to invest $5 billion across its US car factories. The move is part of Elkann’s plan to turn around the struggling carmaker, after the company parted ways with charismatic but uncompromising chief executive Carlos Tavares last month.
Stellantis’s share price has cratered in the past year as it has struggled with a shortfall in demand for its cars. Tavares’s unrelenting style also damaged relations, not least with US dealers saddled with high-priced vehicles they were unable to shift.
A new star emerges inside Blackstone
Blackstone, the world’s largest alternative manager, is flexing its muscles again after enduring a test when interest rates soared in 2022, causing many investors to sell their investments in its massive property fund, Breit. It’s on the offensive again after raising $171 billion and investing $134 billion in 2024, not far off the New York-based group’s activity in 2021 when chief executive Stephen Schwarzman professed an "out of body experience" as cash sloshed around freely.
In its fourth-quarter results, Blackstone’s relatively nascent infrastructure business emerged as a driver of better-than-expected returns. Its $43 billion perpetual infrastructure fund soared about 20% for the year, lifting its fee-related performance revenues by $1.2 billion, or 728%, from the same time in 2023.
At the helm of Blackstone’s infrastructure unit is a rising star inside the group who was name-checked by Schwarzman in front of shareholders on Thursday. In 2017, Sean Klimczak was tasked with getting Blackstone on the map in infrastructure, an area where non-US groups such as Brookfield, Macquarie, and EQT dominate. The efforts didn’t start off swimmingly — a Saudi Arabia-backed effort initially stalled.
Job moves
- BDT & MSD, the merchant bank, has hired Ryan Nolan to co-lead its technology practice, a source tells DD. He previously worked at Goldman Sachs.
- Clifford Chance has hired Emma Ghaffari as a partner for the firm’s global private capital team in London. She joins from Skadden Arps.
- Morgan Stanley banker Michael Grimes is expected to take a senior job at the US Department of Commerce, the New York Times reports. Grimes is the co-leader of the bank’s global technology banking practice.
Smart reads
- Space lasers: Donald Trump has ordered work on a defense shield that goes beyond Ronald Reagan’s famed "Star Wars" program, the FT reports.
- Deutsche’s woes: For much of the past 15 years, the only thing consistent about Deutsche Bank was its ability to step on every rake it encountered, Lex writes. But disappointing annual results suggest anxiety over hidden garden implements remains.
- Bonus value: As bonus season kicks off, Bloomberg analyzes the bonus currencies for a dozen of the world’s biggest banks to help demystify the awards.
News round-up
- Deutsche Bank chief says ‘nothing is off limits’ as profits plunge (FT)
- Staley discussed Madoff with Epstein, FCA alleges (FT)
- Microsoft sheds $200 billion in market value after cloud sales disappoint (FT)
- Court rules Sanjeev Gupta owes $53 million to rival steelmakers (FT)
- Intel sales slide as chipmaker pursues turnaround strategy (FT)
- Meta sticks with big bet on AI even after DeepSeek shook markets (FT)
- UK regulator proposes easing obligations on Royal Mail (FT)
- Shell boss vows to take Jackdaw gasfield battle to UK’s highest court (FT)
- Thales Alenia Space wins €862 million deal for Europe’s first lunar cargo vehicle (FT)
Conclusion
In this week’s Due Diligence, we explored various stories across dealmaking, private equity, and corporate finance. From SoftBank’s potential investment in OpenAI to Stellantis’s plans for the US market, we covered a range of topics. We also analyzed Blackstone’s infrastructure business and job moves in the industry. Finally, we shared news round-ups and smart reads on various market trends and events.
FAQs
Q: What is the purpose of Due Diligence?
A: Due Diligence is a weekly newsletter that provides readers with an overview of dealmaking, private equity, and corporate finance news.
Q: Who writes Due Diligence?
A: The newsletter is written by a team of journalists and editors at the Financial Times, including Arash Massoudi, Ivan Levingston, Ortenca Aliaj, and Robert Smith in London, James Fontanella-Khan, Sujeet Indap, Eric Platt, Antoine Gara, Amelia Pollard, and Maria Heeter in New York, and Kaye Wiggins in Hong Kong.
Q: How can I stay up-to-date with the latest news and analysis?
A: You can sign up for Due Diligence here or explore other Financial Times newsletters, such as India Business Briefing and Unhedged.
