The UK’s Apollo-backed insurance coverage juggernaut | USAEMALL.com

One scoop to start: Revolut is in talks to raise new funding from investors at a $65bn valuation in a transaction that would fuel global expansion for Europe’s most valuable start-up.

And a sibling rivalry scoop: Grant Thornton’s UK and US businesses are vying to take over their German sister firm in a private equity-fuelled race to secure a greater share of the accounting group’s global network.

In today’s newsletter:

• Private capital’s UK insurance push

• A patent cliff for Big Pharma

• Jane Street’s India problem

Apollo wades deeper into UK insurance

There’s a new Apollo-backed entrant in the UK pensions market and it promises to reshape Europe’s largest retail marketplace in the coming decades.

Last week, Athora, an insurance group created by Apollo in 2018, struck the UK’s largest deal this year, agreeing to buy retirement savings group Pension Insurance Corporation for £5.7bn. 

The move plants a big Apollo-esque flag in the UK just as the private capital behemoth reshapes the US financial system by matching giant lending marketplaces with insurance policies.

And Apollo isn’t alone. America’s private capital groups have been looking across the pond at European insurers with envy for a while. Now they’re expanding quickly.

Brookfield, KKR and Carlyle have all started insurance operations in the country or studied acquisitions over the past few years. The FT previously reported that Carlyle and KKR had also studied bids for PIC.

The UK is a lucrative market for insurers and one that’s ripe for dealmaking.

Employers in the UK are looking to move pensions liabilities off their balance sheets by selling them to insurers. British businesses are forecast to offload a record £70bn of pensions risk this year, according to pensions consultant WTW.

And there’s much more of that to come: more than a third of the UK’s defined benefit pension schemes, managing more than £1tn of assets, could afford to hand over their schemes to an insurer, according to the Pension Protection Fund.

Private capital groups have become the US insurance market’s dominant players, but Europe’s sceptical regulators make it harder to crack.

For the continent’s watchdogs, Italian life insurer Eurovita’s collapse in 2023 looms large.

Eurovita went into administration as interest rates rose, and its private equity backer failed to put in all the extra capital that regulators wanted. Policyholders rushed for the exits.

Last year, Apollo chief Marc Rowan complained that acquisitions were proving “politically very difficult” in Europe and some jurisdictions had been “hostile to private markets”.

That Athora, minority owned by Apollo, is buying PIC instead of its wholly owned US insure Athene is an interesting quirk of the deal.

Apollo owns only a quarter of Athora, with its large investors and management owning the remainder, meaning the private capital group will forgo the full insurance spread it retains through deals with Athene. Instead, it would collect a fee for managing some — though not all — of PIC’s assets.

Athora is presenting itself as a long-term strategic owner of PIC, versus the private equity backers Reinet Investments and CVC that are selling the insurer.  

“The most common question I get is: ‘Do you have private equity fund capital?’ We have none,” said Athora chief executive Mike Wells.

Merck courts Verona, reviving Big Pharma’s M&A love affair

Pharma giants are fast approaching patent cliffs and they’re returning to a tried and tested strategy to keep them falling off the brink: buying biotechs with promising drugs.

Merck’s $10bn deal for Verona Pharma, scooped by DD’s Oliver Barnes on Wednesday, is a case in point. 

Verona holds the patent for Ohtuvayre, a drug to treat chronic obstructive pulmonary disease that’s already been approved in the US.

Ohtuvayre could plug a revenue hole when Merck’s trophy product, Keytruda, comes off patent in 2028.

Keytruda is the world’s bestselling drug, raking in $30bn every year. But once the patent expires, rivals will be able to sell the drug on the cheap, decimating Merck’s sales.

So it’s no wonder that Merck splashed the cash to get a hold of Ohtuvayre: the Verona Pharma deal is the second biggest in biotech this year and Merck’s biggest takeover in two years.

(The deal is also a huge coup for Merck’s legal adviser, Freshfields. The London-based Magic Circle firm rarely advises on big US acquisitions.)

It all comes at a trying time for Big Pharma, which is contending with the threat of sectoral tariffs from US President Donald Trump and the looming spectre of competitors from China.

And in 2027 and 2028, an alarming $180bn of drugs will go off patent, leaving Merck and other pharma giants such as Bristol Myers Squibb and Pfizer with a shortfall to fill. 

The revenue gap could be existential for the industry if it doesn’t act soon.

Fortunately for drugmakers, they’re sitting on $1.3tn of dry powder. In a fallow year for mergers and acquisitions, that’s giving dealmakers hope that a biopharma M&A boom could be on the horizon.

Nasdaq’s biotech index was up nearly 3 per cent on Wednesday in the wake of Merck’s acquisition, a sure sign that investors foresee a flurry of deals in the sector.

Trouble in paradise for Jane Street in India

A week ago lots of people at New York trading powerhouse Jane Street were probably eagerly awaiting a long, warm and barbecue-filled July 4 weekend. By the end of it they were shell-shocked.

On the eve of Independence Day in the US, India’s financial regulator abruptly slapped Jane Street with accusations of “sinister” market manipulation and banned the proprietary trading firm from the country until it stumps up about $550mn of “illegal gains” that it says it has found so far. 

The scandal has cast a pall over Jane Street, which until now seemed like it could do no wrong.

Last year it made more than $20bn of net trading revenues, and in the first quarter of 2025 alone it made $7.2bn, more than Morgan Stanley’s traders. Even its interns earn more than Federal Reserve chair Jay Powell.

Now, the FT reports that the interim order from the Securities and Exchange Board of India could prove to be just the beginning of its troubles. 

For more details on precisely what Jane Street is alleged to have done in India, our friends at Alphaville have zoomed in on what appears to be the crux of the issue: heavy trading in India’s wildly engorged options market.

(Alphaville also had an attempt at “steel-manning” Jane Street’s defence.) 

Jane Street strongly disputes the allegations. In an internal email seen by the FT, it told its more than 3,000 employees that it was “painful to have our firm’s reputation tarnished by a report based on so many erroneous or unsupported assertions” and promised to fight the charges.

However, many rivals both publicly and privately said the Indian regulator’s report reflected poorly on Jane Street.

“Sometimes you read a regulator’s complaint and think they just don’t get what’s going on,” an executive at a competitor told DD. “But in this case Sebi laid out a strong case.”

Job moves

• X’s Linda Yaccarino said she would step down as chief executive of the social media platform owned by Elon Musk after two years at the helm. 

• Apple has named Sabih Khan as its chief operating officer. Khan joined Apple in 1995 and succeeds his current boss Jeff Williams, who will retire later this year. Tim Cook held the role before he was appointed chief executive.

• EG Group has named Mark Segal as its finance chief. He was most recently at Spin Master, where he was CFO.

• Lazard has appointed Jon Steinberg as a managing director in its media, entertainment and sports advisory group. He was most recently chief executive of Future Plc and founded Cheddar News.

• King Street has hired Philip Brown as a managing director on its US research team. He joins from P. Schoenfeld Asset Management, where he was a partner.

Smart reads

Digital renminbi The US dollar remains the currency of choice for stablecoins. But in mainland China, where cryptocurrencies are banned, local policymakers are starting to take interest, Lex writes.

Dogefight Elon Musk may be gone from the so-called Department of Government Efficiency, but his allies remain, the Wall Street Journal writes. And they’re sparring with the White House for control.

Crypto lobbyists Trump’s Damascene conversion to crypto cheerleader followed “one of the great lobbying free-for-alls in recent history”, the New York Times writes, in a behind-the-scenes dissection of his transformation.

News round-up

Nvidia becomes first company to reach $4tn in market value (FT)

BCG’s role in Gaza probed by UK parliamentary committee (FT)

Goldman demands oath from junior bankers to fend off private equity (Bloomberg)

Italian candy maker Ferrero in talks for storied US cereal maker Kellogg’s (FT)

Singapore’s Temasek sours on European companies amid US tariff threats (FT)

Hedge funds to blame for coffee price surge, says Lavazza boss (FT)

Apple bids for Formula 1 rights in US after success of Brad Pitt film (FT)

Blackstone-owned casino operator Cirsa rises on market debut (FT)

Top financial watchdog recommends limits on hedge fund leverage (FT)

Thames Water refuses to claw back bonuses despite government threats (FT)