Trading the commerce battle | USAEMALL.com

One scoop to start: Goldman Sachs is fundraising for its 1869 alumni programme and has slashed the investment minimum by 90 per cent for a new vehicle that will put money into its private market funds. 

And an activist campaign: Hedge fund Elliott Management has built a stake in BP, which could push the struggling UK oil major to refocus on its core oil and gas business after years of building up a sprawling empire of green energy projects.

In today’s newsletter:

• How to trade the trade war

• Apollo chief: asset partnerships will shake up Wall Street

• Trump’s memecoin inspires wave of copycats

On-again, off-again. Navigating the trade war

For the financial markets, the stop-start trade war that has characterised Donald Trump’s opening weeks in office has been a reminder of the special brand of unpredictability that the US president brings, writes Ian Smith in London. 

A burst in volatility, after the announcement and then partial postponement of tariffs on key trading partners, has delighted foreign-currency traders but divided longer-term investors into two camps: those who are staying away from taking positions that could fall victim to tariff headlines, and those who are looking to benefit from the market shifts and reversals.

Exporters are an obvious target. Goldman Sachs and UBS are among those banks offering equity investors baskets of tariff-exposed companies to bet against, or on, for those investors who think levies can be negotiated away. 

Hedge funds have been shorting exporters such as carmakers, with London-based AKO Capital short Daimler Truck and Marshall Wace short companies including BMW and Mercedes, according to Breakout Point data.

In fixed income markets, some long-only debt fund managers such as BNP Paribas Asset Management have been buying the dip when a Trump broadside pushes the price lower on a target country’s sovereign debt. 

Such news gives us the “opportunity to get involved in names that, in our assessment, are strong fundamentally or mispriced,” says Alaa Bushehri, the investment manager’s head of emerging markets debt.

In developed markets, some fund managers are looking to minimise their tariff risks by trading currency pairs that aren’t swept up in the tariff-on, tariff-off sentiment shifts that have determined the path of the dollar since the US election.

“I think we have learnt to have most of our risk in trades which are not hostage to headlines,” said Mark Dowding, chief investment officer for fixed income at RBC Bluebay Asset Management, which is betting on the yen against the euro.

Click here for more on what investors think Trump 2.0 means for markets.

Apollo chief: wave of asset partnerships will shake up Wall Street

The convergence between mainstream and alternative asset managers is heating up and playing out in different iterations. Last week Marc Rowan became the latest top executive to endorse this trend — and throw his marketing pitch into the ring.

The Apollo Global Management chief executive says a wave of partnerships between alternative and big asset managers will shake up Wall Street, reports Antoine Gara in New York.

During Apollo’s fourth-quarter earnings call, Rowan predicted that large private capital companies would increasingly distribute their investments, such as corporate buyouts, to traditional asset managers that had prioritised raising their clients’ exposure to unlisted assets. 

He said companies such as Apollo could create co-branded investment funds or “massive managed accounts” with traditional asset managers that would widen investors’ ownership of unlisted assets. 

“I see a very good marriage between our industry, our company, and the public or traditional asset managers who I believe are going to reinvent their businesses spurred on by competitive forces,” said Rowan.

The Apollo chief said BlackRock’s acquisition of private credit manager HPS Investment Partners and infrastructure group Global Infrastructure Partners should be taken as a “wake-up call” to the investment industry. 

Those megadeals signalled a need for traditional investment groups to offer private funds, which would lead to greater “convergence” between public and private investment portfolios, he said. 

We’re already seeing this. In recent months, BlackRock and Partners Group, KKR and Capital Group, and indeed Apollo and State Street Global Advisors have all announced tie-ups.

Partnerships do of course typically avoid the high price and execution risk that comes with big ticket M&A. So conceptually, this all sounds sensible. But some of our readers were more cynical:

“The private equity funds are struggling to exit their investments in a public equity market that is dominated by index tracking funds. Teaming up is probably their plan B. Investors should beware that liquid and illiquid or semi-liquid investments are very different animals. I can already see the headlines.” (windmill69)

“An excuse to keep long-only asset managers relevant and to give the pe dons more capital and potential liquidity to exit their bad investments. Stick with the tracker.” (Bob999)

What do you think? Email me: harriet.agnew@ft.com 

Chart of the week

Donald Trump’s new cryptocurrency has sparked a flood of imitators, leading to warnings that investors risk being duped. 

More than 700 copycat and spam coins have been sent to Trump’s digital wallet by people apparently seeking to suggest their creations have his endorsement, according to a Financial Times analysis. 

It comes after the president and his wife Melania launched memecoins, which lack practical use and whose value is entirely underpinned by speculation, days ahead of his return to the White House last month. 

The FT found 736 different memecoins have been deposited in the official Trump coin wallet over the past three weeks. Among them, nearly 200 — including “OFFICIAL TRUMP” and “OFFICIAL MELANIA” — are named after Trump or members of his family but have no connection to the president. 

Trump and Melania’s decision to launch their memecoins has drawn fierce criticism for luring retail investors into backing tokens more volatile than bitcoin. 

By creating a memecoin, Trump has “opened the floodgates to deception . . . and at a minimum to rampant speculation”, said Eswar Prasad, senior fellow at the Brookings Institution. He added that ordinary investors buying the copycat coins “just exposes them to enormous risk”. 

The FT analysed the holdings of the official Trump coin wallet, which is controlled by entities backed by the president and holds 80 per cent of his token, with the aim of releasing them to investors in the future. 

After the real Trump coin was launched, the first so-called copycat coin was minted within 30 minutes, underscoring how rapidly creators sought to benefit from Trump’s interest in crypto. 

Memcoin creators are taking advantage of a function in Solana — the blockchain that underpins Trump’s memecoins — that allows users to dump new coins into another wallet without needing permission. Anyone can create a memecoin, with online generators helping users make them without needing any coding skills. 

Appearing in a high-profile wallet such as the official Trump reserve increases the visibility of tokens and the possibility that traders may confuse them for official coins, or may give the illusion of official Trump backing, which could push up the price. 

“For the uninformed investor it’s very difficult to separate the genuine projects” from copycat coins, said Omid Malekan, adjunct professor at Columbia Business School.

Five unmissable stories this week

US foundations and university endowments are ramping up their exposure to cryptocurrencies to join the digital assets rush prompted by President Donald Trump’s promise to make the nation the world’s “bitcoin superpower”.

UnitedHealth Group has raised concerns with the US Securities and Exchange Commission over a social media post by activist investor Bill Ackman, who claimed that the healthcare group could be inflating its profits.

Amundi is “in the market” for more acquisitions, according to its chief executive Valérie Baudson. And M&G has acquired a majority stake in Swedish private credit firm P Capital Partners. 

Vanguard, the world’s second-largest asset manager, is making good on promises to disrupt bond funds and continue to squeeze costs out of equity investing with the largest round of fee cuts in its history.

The National Employment Savings Trust, the UK’s state-backed pension scheme, has pledged to invest £5bn with Australian infrastructure giant IFM Investors, in a boost for chancellor Rachel Reeves. 

And finally

If you can’t make it to Rio Carnival later this month then the ‘Brasil! Brasil!’ exhibition at the Royal Academy is the next best thing. It feels like summer in this sumptuous show, writes our chief art critic Jackie Wullschläger. Modernist pioneers offer an upbeat winter tonic and Burlington House hasn’t looked this eye-popping in years.