Goldman Sachs is prepared for Rishi | USAEMALL.com

One scoop to start: Renault will name an interim chief executive next week as it continues to search for a replacement for Luca de Meo, who is to leave the carmaker to head luxury group Kering.

More fallout from BCG’s Gaza work: Boston Consulting Group’s chief executive said its involvement with a postwar plan for Gaza that envisioned relocating a quarter of the population had been “reputationally very damaging”, as the Save the Children charity halted a two-decade partnership with the firm.

And another thing: Elon Musk’s SpaceX is preparing to sell about $1bn of its shares in a deal that would value the rocket and satellite group at $400bn.

In today’s newsletter:

• Rishi Sunak rejoins Goldman

• Parisian bankers brave an American onslaught

• Doge victims tap private credit

Rishi’s new Goldman gig

Rewind to April last year and the big topic of conversation in the City of London was where then-prime minister Rishi Sunak would be headed after the UK’s general election.

The smart money was betting that Sunak would launch his own venture capital firm or join private equity group Blackstone, whose executives he’d long established close ties with.

Instead, the Brexit-supporting Tory politician is set to join the place where he started his career.

DD’s Ortenca Aliaj and the FT’s Jim Pickard first reported on Tuesday that Sunak is set to join Goldman Sachs as a senior adviser, where he’ll work with its executives to advise clients on geopolitical and economic issues.

Ahead of his disastrous general election defeat last year, speculation was rife that Sunak would exit politics and return to finance.

But he always maintained he’d remain in parliament, and true to his word, the ex-Goldman analyst stayed on, as the MP for Richmond and Northallerton.

His new side gig at Goldman lets him maintain that promise while setting him up nicely for life after politics.

He follows in a long line of prime ministers who’ve moved on to advise finance groups after leaving Downing Street.

Tony Blair joined JPMorgan in 2008, professing to the FT that he’d “always been interested in commerce” as he accepted what was thought to be a $1mn-a-year role. David Cameron later joined Greensill Capital, but the less said about that, the better.

The Goldman role is less of a radical departure for Sunak, who started out as a summer intern at the investment bank before joining full time as a junior analyst.

He’s also promised to donate his pay from the advisory role to charity, and the UK government’s appointments watchdog has restricted him from some activities for another year, such as lobbying the government on behalf of Goldman, using Whitehall contacts to influence policy, or advising the bank in relation to bids or contracts with the government.

Last month, Sunak was hobnobbing with the great and the good at a party celebrating 25 years in Europe for Blackstone in Mayfair. Those he was spotted with include Blackstone’s co-chief investment officer Lionel Assant, who worked with him at Goldman more than 20 years ago.

While DD has reported extensively on the end of on-cycle private equity recruiting, we are aware of no such prohibition on former prime ministers.

Wall Street boutiques take on Paris

Just over five years ago, the news that French dealmaker Matthieu Pigasse was leaving Lazard to lead a new French office for Centerview Partners shocked Parisian business circles.

The French capital is one of the most competitive in the world. Prestige houses Lazard and Rothschild compete with Wall Street and French banks to secure mandates from the country’s huge businesses, such as luxury group LVMH or TotalEnergies, or on private equity deals.

But in the past few years, US boutique banks have tried to muscle their way in. As well as Centerview, Evercore, PJT Partners, Perella Weinberg and Moelis have started operations in France. 

They’ve hired more than 150 bankers in Paris since 2018, when Perella opened offices, with several players setting up offices a stone’s throw from Lazard and Rothschild in Paris’s chic eighth arrondissement.

But there are not 150 new dealmakers in Paris, as one boutique banker has noted.

Often, boutiques have built their presence by poaching talent from existing players, especially Lazard. Although the brand names are American, the bankers are almost exclusively French, helping to navigate France’s business scene. 

Several years in, the American upstarts are steadily climbing league tables of M&A fees. Centerview has scored a few big wins, advising L’Oréal on the acquisition of luxury brand Aesop, for instance. 

Pigasse told the FT that he can make a good return on a small number of high-value deals. Or, as he put it with typical panache: “We’re not a bee that goes from one flower to the next: our only honey is that of the client.”

But it’s not an easy market to break into. Lazard and Rothschild continue to dominate the rankings and several people said they were weathering the storm. 

With deals not exactly flowing in France, or elsewhere in Europe, the new boutiques’ fiercest competition may yet be themselves. Many will have to put up with limited business in the years ahead. 

“If you’ve opened an office in Paris, it’s long-term,” said one boutique Parisian banker. “But people are going to realise the French market is far from being an El Dorado.”

Doge’s casualties are private capital’s new clients 

Private credit groups are always on the lookout for a new lending opportunity and they’ve just spotted a fresh group of clients: victims of the so-called Department of Government Efficiency’s (Doge) cost-cutting crusade.

One California-based private capital lender, Legalist, has extended $100mn in bridge loans to dozens of slashed government contractors waiting for reimbursement from the federal government. 

It currently has about 70 borrowers for its government receivables strategy, and targets an interest rate of at least 12 per cent, with a loan size of 50-80 per cent of expected reimbursement. 

It’s a windfall for Legalist, a litigation finance investor launched in 2016. The San Francisco-based lender is now looking to raise $250mn from investors for further loans. 

And it’s yet another case of private credit outfits stepping in when traditional lenders are unwilling or unable. 

One contractor with USAID told DD’s Sujeet Indap and the FT’s Joe Miller that big banks it had previously worked with had been unwilling to extend new liquidity after it was issued with a stop-work order.

The government owed the contractor nearly $200mn, but no matter: “Banks had been pricing us as low risk. That wasn’t true anymore and it was easier for them to walk away rather than find a solution.”

The stop-gap could turn out to be a shrewd play for private credit groups. They’re lending to businesses owed money that’s in effect guaranteed by the mighty US government.

Job moves

• Pfizer’s corporate affairs chief Sally Susman is leaving after 18 years at the pharmaceutical company. She oversaw communications at the US-based drugmaker through the Covid-19 pandemic, five presidential administrations and three CEOs’ tenures.

• Covington has named Henry Liu as its antitrust co-chair. He returns to the firm after an 18-month spell leading the Federal Trade Commission’s antitrust unit under former chair Lina Khan.

• Skadden partner Yuting Wu has recently joined Chinese start-up Xiaohongshu. Skadden closed its Shanghai office last year.

• Apollo has hired Brian Chu as a partner. Chu, who previously worked at Centerbridge Partners, will lead an Apollo unit tasked with providing operational support to companies owned by its private equity funds.

• Weil has appointed David Markman as a partner in its technology and IP transactions practice in Los Angeles. He joins from DLA Piper.

Smart reads

Balance sheet gymnastics Behind CoreWeave’s purchase of rival Core Scientific is a smart piece of financial engineering, Lex writes.

Hard times As passive funds continue their relentless march, a sale of asset manager and City of London stalwart Schroders is looking ever more feasible, Bloomberg reports.

A dying medium Cable TV remains profitable, but viewership is falling, Business Insider writes. A growing number of companies are weighing spin-offs and sales.

News round-up

UniCredit doubles its equity stake in Commerzbank to 20% (FT)

Private equity abandons early recruiting after Jamie Dimon fightback (FT)

US universities face $1bn revenue hit over foreign student fears (FT)

Wall Street turns more bullish on US stocks despite Donald Trump’s tariff threats (FT)

SpaceX, Blue Origin stand to gain from tax benefit in Trump bill (FT)

BP and Shell sign Libya deals as majors accelerate return after civil war (FT)

Brookfield set to take over 20% stake in Sizewell C (FT)

Hotelier turned bitcoin hoarder Metaplanet plots acquisition spree (FT)

M&S turned to FBI for help after ‘traumatic’ cyber attack (FT)