Perella Weinberg’s blood feud goes to court docket | USAEMALL.com

One billionaire spat to start: OpenAI hit back at Elon Musk’s criticism of Stargate, the new $500bn artificial intelligence infrastructure project hailed by President Donald Trump as a “resounding declaration of confidence in America’s potential under a new president”.

And a pub quiz: Our friends at FT Alphaville are hosting another of their finance and economics-themed pub quizzes in Washington, DC, on February 6. Here are all the details.

In today’s newsletter:

• Perella Weinberg’s day in court looms

• The UK ousts an antitrust traffic cop 

• Fee hunger games for Hong Kong bankers

Perella’s decade-long legal fight

Exactly 10 years ago, in January 2015, Michael Kramer hosted about 10 of his colleagues at his New Canaan, Connecticut, estate on a cold Sunday afternoon.

At the time, Kramer led the restructuring practice at the famed investment bank Perella Weinberg Partners.

Though the meeting took place in a grand house and neighbourhood known for festive get-togethers, the gathering wasn’t exactly a party. The group, starting with Kramer, wasn’t happy with their situation at the firm.

And the agenda of that meeting is now, a decade on, the focal point of a trial in New York state court that is set to begin on Friday.

Perella Weinberg has accused Kramer and three colleagues of violating their employment agreements, which barred them from competing with the company and soliciting firm employees for a specified period of time.

Kramer has countered that the firm’s leadership, including the likes of Peter Weinberg, Joe Perella and Robert Steel, had marginalised the group within PWP.

DD’s Sujeet Indap has the preview of the courtroom fireworks to come.

The trial’s star witness will be a more obscure figure: Kevin Cofsky, who attended the Connecticut meeting as a junior executive in the group.

A few weeks later he admitted to PWP management that the meeting was to advance a new firm. That’s when things took a dramatic turn.

PWP took that information and fired Kramer via voicemail in February 2015. Kramer now wants the court to order PWP to hand him back $60mn in pay and equity.

PWP says Kramer’s treachery cost it tens of millions of dollars in lost deal fees, ill-gotten bonuses and guarantees owed to replacement bankers.

The court is set to decide who is at fault in one of the messier Wall Street blow-ups in recent memory. Kramer and everyone at the meeting, save Cofsky, will testify that there was no solicitation ever made.

PWP did manage to rebuild its restructuring group and prospered broadly enough to go public in 2021. It now has a $2bn market cap. Kramer’s new firm, Ducera Partners, is thriving now with about $150mn of annual revenue.

All the bankers at the Connecticut meeting joined Ducera eventually, except for one: Cofsky, who remains at PWP.

UK’s competition regulator gets kicked out

London has had a tough time keeping up with the US’s blistering growth.

One reason, according to some ministers, at least, is an overburdensome regulatory apparatus that scares off multinational companies that might otherwise like to cut deals in the UK.

The government’s latest effort to loosen up financial markets is a shake-up of the leadership at the UK Competition and Markets Authority. On Tuesday the FT reported that officials pushed out its chair, Marcus Bokkerink.

He’s departing the agency after the FT reported that business secretary Jonathan Reynolds had intervened.

One government official told the FT that the Department for Business and Trade had made clear to Bokkerink on Monday that he wasn’t sufficiently focused on growth — a major priority for the Labour government.

The CMA came under intense pressure in 2023 for initially trying to block Microsoft’s acquisition of Activision Blizzard. (It eventually did approve the deal between the two US-based businesses.)

Bokkerink formerly worked as a managing director at BCG before joining the regulatory body in 2022. With CMA chairs allowed to serve up to a five-year term, his tenure was decidedly cut short.

The government has appointed Doug Gurr, who ran Amazon’s UK business during the company’s fight to allow it to make a minority investment in Deliveroo (the ecommerce giant did eventually get the CMA’s blessing), as an interim chair.

Reynolds said in a statement that the government had a plan to boost growth for businesses and communities across the UK and that the CMA would play a part in “supercharging the economy”.

Bokkerink, for his part, defended his record. In a statement he said he helped to refocus the agency on helping consumers and ensuring effective competition “instead of being held back by a few powerful incumbents setting the rules for everyone else”.

The ousting of Bokkerink has also led to speculation about the fate of the CMA’s chief executive Sarah Cardell and whether she may also be replaced.

Sceptics have already emerged. One antitrust lawyer at a London firm said the move would have a “chilling and intimidating effect” on independent regulators across the country.

Yet, evidently, complaints from corporate chieftains tipped the scale.

“We know that [the CMA’s] performance has not been good enough,” said one government figure. “There is a lot of frustration about this across the board from business. We are hearing unhappiness from everyone.”

A race to the bottom in Hong Kong banking fees

If you want to know what the life of a Hong Kong investment banker is like these days, there are worse places to look than a plan by CATL, the world’s leading electric vehicle battery maker, to list in the city.

The secondary listing, which Morgan Stanley estimates could raise more than $7bn, is the hot ticket in a market where the pace of IPOs has been slow. Despite CATL having been added to a Pentagon blacklist this month, it seems every banker wants a role.

So much so, that some Chinese banks pitched to work on the deal for fees of as little as 0.01 per cent, DD’s Kaye Wiggins and the FT’s Cheng Leng, Zijing Wu and Arjun Neil Alim report.

“I think in this market, competitors are willing to do things for almost nothing,” said a senior banker at an institution that pitched for a role.

As things stand, China’s CICC and CSC have been lined up alongside JPMorgan and Bank of America for leading roles on the deal. CATL has told bankers it is planning to pay 0.2 per cent in underwriting fees, plus incentive fees which could make the final number higher.

Listing Chinese companies was for years the key fee generator for global investment banks in Asia. If such low fees become the norm, it stands to put their business model in the region under serious pressure.

Why would bankers work for so little? They want their name to be linked to a high-profile, large listing that one executive described as a “franchise-defining deal”. They want to win future business with CATL, such as block trades. And they want the league table credits.

But also, at least in some cases, they want something to do. One banker said it was not a surprise to see the cut-throat pitches from mainland banks given their China bankers had “lots of capacity but no deal flows”.

Job moves

• Matthew Wesley, who is currently global head of the private capital group at Jefferies, is leaving to join Moelis in the coming months to lead the bank’s global private funds advisory business, a source tells DD.

• Paul Hastings has hired Jeffrey Ramsay for its investment grade finance group. He joins from Davis Polk in New York.

• Wells Fargo has hired Peter Thomson to join its leveraged debt capital markets team. He previously worked for Barclays and before that was at UBS.

Smart reads

IRA undone Donald Trump’s return to the White House has put more than $300bn of potential federal green infrastructure funding at risk, the FT reports.

Design titan The British architect Norman Foster has designed landmark office buildings and exquisite monuments for ultra-wealthy clients, The New Yorker writes. How has he pulled it all off?

Mindset shift Corporate leaders need to embrace risk for the long-term good of their companies, the FT’s Anjli Raval writes. The confidence to make bold decisions is critical to corporate growth.

News round-up

LNG exporter Venture Global slashes IPO valuation target by $45bn (FT)

Saba loses battle against Herald board in first blow to UK campaign (FT)

Brussels proposes extending EU banks’ access to UK clearing houses (FT)

Google invests further $1bn in OpenAI rival Anthropic (FT)

Norway’s oil fund places £306mn bet on Mayfair property (FT)

Polestar seeks new suppliers after US ban on Chinese software in electric vehicles (FT) 

Trainline shares hit by UK plans for state-backed rival (FT)

Lacoste to make ‘aggressive’ push into lucrative US sportswear market (FT)