Private fairness’s détente with Jamie Dimon | USAEMALL.com

One scoop to start: A $35bn US semiconductor industry merger is being delayed by Beijing’s antitrust regulator, after Donald Trump tightened chip export controls against China in a move that exacerbated trade tensions between the world’s two largest economies.

A crypto scoop: Anthony Pompliano, one of America’s most prominent crypto influencers, is set to be installed as chief executive of a new publicly traded company that is seeking to raise $750mn to fund a bitcoin buying spree.

And another scoop: Thermo Fisher Scientific has put part of its diagnostics unit up for sale for about $4bn in the latest move by a life sciences company to attempt to offload some of its low-growth assets. 

In today’s newsletter: 

• JPMorgan’s talent war détente

• More Greensill revelations emerge

• Europe’s big space race 

Jamie Dimon, the peacemaker 

Has Jamie Dimon forged a peace deal in the escalating talent war between investment banks and private capital that’s gripped Wall Street for years? 

Just days after the longtime JPMorgan head hardened his bank’s stance on private equity’s poaching of its graduates, two buyout giants have retreated from the brink of raging hiring battles for baby-faced analysts and associates still living in university dorm rooms.  

DD’s Sujeet Indap and Ortenca Aliaj scooped that General Atlantic had followed rival private capital group Apollo Global Management in abandoning early recruitment for its junior roles.

For Dimon, it marks two quick wins after he drew a red line.

Once upon a time aspiring buyout tycoons were trained up at one of Wall Street’s vaunted investment banks, with top performers later plucked from bullpens to take on more lucrative PE roles.

But as DD wrote last month, that path has been subverted in recent years.

PE firms have slowly pushed forward recruitment cycles to lure top talent. Nowadays recent college grads with Wall Street offers are simultaneously fighting for PE jobs — with start dates two to three years into the future.

The trend has irked Dimon, who said it could create conflicts of interest if junior bankers work on deals with firms they know they’ll work for down the line.

“I think that’s unethical. I don’t like it and I may eliminate it regardless of what the private equity guys say,” he told students at Georgetown University late last year.

Last week, JPMorgan told recruits they’d be fired if they accepted deferred job offers soon after starting on analyst programmes.

Dimon’s message resonated with some industry chieftains. 

“When someone says something that is just plainly true, I feel compelled to agree with it,” Apollo chief Marc Rowan said as his firm told graduates that it would delay recruiting for junior associates until next year.

General Atlantic followed suit, saying it didn’t “plan to conduct formal interviews or extend offers this year for the Associate Class of 2027”.

It’s worth mentioning PE’s well-documented deal flow troubles here: trade tariffs have extended a drought for the industry that is bound to slow down industry asset growth and the need for armies of new workers.

For now, with the heads of three major finance houses seeing eye to eye, it looks as if Dimon’s threats have laid the foundations for a détente.

Greensill court case brings Credit Suisse revelations

The legal fight around Greensill Capital continues and it’s bringing up a plethora of information about practices at the late Credit Suisse.

Here are a few highlights, which we have thanks to DD’s Robert Smith and the FT’s Simon Foy. They got hold of a 500-page confidential report by Switzerland’s financial regulator Finma after making a request to the High Court in London.

First off, the Swiss watchdog’s claim that Credit Suisse obstructed investigators during a probe of the bank’s ties to Greensill.

Finma said its questions on allegations against Greensill and metals magnate Sanjeev Gupta were “sometimes answered incompletely, misleadingly or incorrectly” by Credit Suisse.

“This behaviour is difficult to understand,” the watchdog said, in files released this week during a $440mn legal battle between a Credit Suisse investment fund, SoftBank, and a subsidiary of Greensill Capital.

Greensill Capital’s 2021 collapse caused billions of dollars in losses for investors including SoftBank and Credit Suisse.

Critics had argued that its practices concealed risks on companies’ balance sheets and accused it of opaque and circular financing techniques.

The new Finma files pull back the curtain on discussions at Credit Suisse, which tried to push Greensill to cut back its funding for Gupta’s GFG Alliance of metals businesses.

Credit Suisse employees were alarmed at the exposure to Gupta’s companies. At one point, a senior executive emailed a colleague: “Why is GFG back at 1bn!!!!!”

Greensill’s eventual collapse came after it lent more than $5bn to GFG Alliance. It caused major losses for Credit Suisse’s clients.

For a full round-up of the Credit Suisse files, read the FT’s story here.

And if you missed yesterday’s news of the accusations levelled at a former Credit Suisse asset management head — now a partner at BlackRock’s Global Infrastructure Partners — catch that here.

Europe’s space dreams struggle to take off

At a time of giant geopolitical shifts, the EU is contending with its legacy of bureaucracy and the frictions of dozens of competing markets tending to their own interests.

Yet in a sign of change, France’s Thales, Italy’s Leonardo and the Franco-German Airbus have since last year been in talks to merge their space operations.

If accomplished, that would show Europe can create champions of its own.

The aspiration is a jointly held company spanning satellites, space systems and services that could bring in €5bn a year.

But even if an agreement is reached by the end of this year, red tape and political scrutiny mean we’ll likely have to wait until at least 2028 for the combined enterprise to launch.

It comes as Europe’s space giants fight over the scraps of the satellite market that SpaceX’s Starlink has left behind.

The three European companies’ space businesses make a range of technology for commercial, civil and military applications. But they’ve all been walloped by a fall in demand for traditional geostationary telecom satellites, which sit 36,000km above Earth.

So why might the merger take a while?

In effect, each company wants to see a deal to create a more efficient manufacturing giant.

But there are significant political hurdles that underscore Europe’s challenges, according to the FT’s Peggy Hollinger, Sylvia Pfeifer and Barbara Moens.

France wants the deal because it would stop the fratricidal competition between Airbus and Thales and give them a virtual monopoly over the European satellite manufacturing industry.

However, Germany desperately wants to break the French stranglehold. Some in the country’s space sector fear the merger could give France dominance on key technologies, hitting local jobs.

Italy is keen on the deal, but insists on an equal partnership.

The mood in Europe is one of collaboration. Nevertheless, it’s looking like a long uphill climb.

Job moves

• Ventura Capital has appointed ex-UK chancellor Philip Hammond as chair of its advisory board.

• UBS has hired David Larsen and Robert Michlovich as managing directors in its US technology team. They join from Bank of America Merrill Lynch.

Smart reads

Here to stay Stablecoins were once the preserve of crypto traders, drug traffickers and money launderers, the FT writes. They’re now entering the mainstream.

New oligarchs The departure of western businesses from Russia has given local knock-offs a windfall and a line to the Kremlin, the FT reports.

Wealth exodus Wealthy foreigners are leaving the UK in droves, reports Bloomberg in a novel analysis of Companies House data. It could spell trouble for the nation’s economy.

News round-up

BlackRock sets $400bn fundraising target to take on private capital giants (FT)

Meta invests $15bn in Scale AI, doubling start-up’s valuation (FT)

Barbie-maker Mattel partners with OpenAI to make artificial intelligence child’s play (FT)

BYD brings EV price wars to small cars in Europe (FT)

City firms order workers back to the office as WFH perks end (FT)

Afreximbank accuses Fitch of ‘erroneous view’ over exposure to losses (FT)

Universal Music inks joint venture with Hollywood agent Patrick Whitesell (FT)

Poundland sold for less than a pound (FT)