One big move to start: Bob Iger is stepping down as chief executive of Walt Disney a year after extending his contract, handing day-to-day control of the world’s largest media company to the head of its theme parks business. Get the full story here.
One big event to start: We are just over a week away from the 2nd annual FT Business of Football Summit in London. Hear from some of the most influential club owners and dealmakers in the sport. Join DD’s Arash Massoudi and James Fontanella-Khan as well as the FT’s sports editor Murad Ahmed on March 5 in person.
Now back to the show . . .
Wanted: Chief executive for major European lender. Must be low-key, cost cutter with a knack for digital and an eye for retail. Highly paid dealmakers or divas need not apply.
When the FT revealed that UBS had named Ralph Hamers,pictured centre, the mild-mannered head of Dutch bank ING, as its new chief executive, people in the banking industry were surprised.
But Hamers typifies the new breed of chief executive Europe’s banks are looking for. Although he has presided over a money-laundering scandal, sparred with Dutch politicians over executive pay and criticised central bank policies, he’s avoided one of the major pitfalls of a high-profile job: personal scandals.
Bank boards, to borrow from Mary J Blige, want no more drama. They’ve had it with the spying scandals, questionable relationships and big pay demands that have dogged some of Europe’s best-known CEO’s of late.
Bank executives, boards of directors and external headhunters told the FT’s David Crow, Stephen Morris and Nicholas Megaw, that the next generation of leaders will need different qualities compared to the crisis managers appointed following the financial crash.
What they’re looking for is Goldilocks CEOs — leaders but not flamboyant, the right public profile without being too flashy, but not dull or boring.
To lend a helping hand, we’ve compiled a pool of candidates that board members can dip into below, though we certainly can’t guarantee they fit all the quotas. (We know Lloyd Blankfein was joking, but he wasn’t wrong when he said “some of you guys in the media are doing God’s work too”.)
Standard Chartered executive Simon Cooper — The insider
RSA Insurance Group boss Stephen Hester — The boomerang CEO
Vim Maru, head of retail at Lloyds Banking Group — The loyal lieutenant
Andrea Orcel, formerly the head of UBS’s investment bank and currently at war with Santander — The dealmaker
Lloyds CEO António Horta-Osório — The veteran
Christian Meissner, Bank of America’s former investment banking head — The globetrotter
Former HSBC chief John Flint — The comeback kid
Whitbread chief Alison Brittain — The prodigal daughter
Goldman Sachs’ top European executive Richard Gnodde — The budget buster
For a detailed biography on the CEOs in waiting, and to put names to faces, check out the full article here.
The evolution of Man Group
They say hindsight is 20/20. So how has one of the biggest deals in the hedge fund industry fared a decade on?
That’s the question the FT’s Laurence Fletcher looks to answer by investigating how Man Group’s $1.6bn acquisition of GLG Partners in 2010 has affected Europe’s largest hedge fund manager.
At the time, the deal was described as transformative. It was the coming together of a buttoned down quantitative specialist and a high-profile hedge fund famous for star traders like Greg Coffey, Philippe Jabre and Pierre Lagrange.
Man Group thought it made sense to add a so-called discretionary strategy — where managerial skills are relied upon — as its computer-driven funds lost money in 2009 after a jackpot year in 2008 and the group sought to diversify, betting that GLG would be a steadier source of profits.
Ironically, the glow of star traders has faded in the years since Man Group bought GLG and quant funds have become one of the most popular strategies in the industry with groups like Renaissance Technologies, Two Sigma and Bridgewater Associates pulling in billions.
Man Group’s quant business has also grown substantially, with funds that now rank among its top performers. AHL, the group’s flagship quantitative strategy, has seen its assets surge by 40 per cent to $30bn.
Meanwhile GLG’s value has been written down by more than $1bn, confirming the fears of some investors who always warned the price was too high, and performance has at times flagged. But GLG has provided the next generation of Man Group’s executive management team — current chief executive Luke Ellis arrived with GLG.
As Man Group turns its back on the “Master of Mayfair” it has to ask itself the question, was $1.6bn a fair price to pay? Its share price may have something to say about that.
CVC makes another play for professional sport
Whoever wins rugby union’s Six Nations championship next month, CVC Capital Partners will be cheering.
The private equity group is on the verge of a £300m deal for a roughly 14 per cent stake in the flagship tournament, the FT’s Murad Ahmed and Sammy Mngqosini and DD’s Kaye Wiggins report.
But that’s not all. CVC has been snapping up a whole load of rugby stakes: it’s about to finalise a £120m stake in club competition Pro14, and it bought a 27 per cent holding in Premiership Rugby, the top tier of English club rugby, in 2018.
That’s given it a seat at the table with the sport’s global decision makers. It’s also in talks with World Rugby,the sport’s governing body, and national governing bodies in New Zealand and South Africa, two of the dominant forces in the sport.
Though it’s an unconventional approach from a private equity group — the deals, while funded from its main €16.4bn buyout fund, don’t involve debt or controlling stakes — it opens the door to what could be an ambitious and lucrative reshaping of the game.
That could involve bundling TV rights for rugby competitions around the world into a single package for broadcasters, streaming deals with digital players such as Amazon, or creating an “over the top” internet subscription service for fans.
In time, CVC also envisages the creation of a “Club World Cup”, a money-spinning tournament involving the best sides on the planet.
World Rugby’s response is, well, pragmatic.
“Private equity is a reality,” Brett Gosper, the body’s chief executive, told the FT. “We are where we are. [World Rugby] has to deal with reality in the most constructive way.”
Ajay Banga is stepping down as chief executive of Mastercard in 2021 and moving to the role of executive chairman after leading the company for almost a decade. The group’s chief product officer, Michael Miebach, will replace him. Full tale here.
Keith Block has stepped down as co-chief executive of Salesforce after just 18 months on the job in an unexpected move that leaves Marc Benioff alone at the helm. Full story here.
Khalid al-Falih, who was removed from his position as Saudi Arabia’s energy minister and chairman of Saudi Aramco last year, has returned to lead a new government ministry for investment as part of a cabinet reshuffle. More here.
Jason Droege, the executive in charge of Uber Eats, which is under immense pressure to cut costs, is leaving the company. He will be replaced by Uber’s current head of international rides, Pierre-Dimitri Gore-Coty. More here.
David Abrams, a former partner at Apollo Global Management, has been named head of investments for Harris Blitzer Sports & Entertainment, the parent company of the Philadelphia 76ers and New Jersey Devils.
Citigroup has appointed Alvaro Revuelta and Jorge Ramos as co-heads of investment banking in Iberia.
Sam Newhouse has joined Latham & Watkins in London as a M&A partner from Freshfields.
Corporate gibberish Terms like community-adjusted Ebitda, parallel path, directionality and utilisation are just a small sample of the verbal fluff that companies have developed to communicate with their employees and customers. Molly Young asks why corporations speak the way they do and nails the description of WeWork’s prospectus — “it reads like something a person wrote in the middle of an Adderall overdose with a gun to his head”. (Vulture)
The path to Atlassian Almost two decades ago two college friends in Australia took out $10,000 in credit card debt to start their own business. That garage start-up has turned into the country’s most successful technology group and helped put Australia’s tech scene on the map. Scott Farquhar and Mike Cannon-Brookes tell the FT’s Jamie Smyth how they did it. (FT)
BlackRock’s black box For a platform that holds more than $21tn, equivalent to 10 per cent of global stocks and bonds, little is known about Aladdin, the technology hub created by BlackRock. Used by some of the world’s largest fund managers, public companies and sovereign wealth funds, Aladdin’s success has attracted scrutiny. Could the world’s most powerful risk management system become a liability for its owner? (FT)
Three charts that pierce the private equity hype (FT Alphaville)
Intuit/Credit Karma: the trial (FT Lex)
Anyone on Wall Street want a Swiss bank? (Reuters)
Due Diligence is written by Arash Massoudi, Kaye Wiggins and Robert Smith in London, Javier Espinoza in Brussels, James Fontanella-Khan, Ortenca Aliaj, Sujeet Indap, Eric Platt and Mark Vandevelde in New York, Miles Kruppa in San Francisco and Don Weinland in Beijing.
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