It’s time to buy into the US

One scoop to start: Christine Lagarde has discussed cutting short her term as European Central Bank president to become chair of the World Economic Forum, according to WEF founder Klaus Schwab.

And another scoop: Elon Musk has agreed a $300mn deal with Pavel Durov, founder of Telegram, to distribute xAI’s Grok chatbot to the messaging app’s 1bn users, in a sign of a blossoming partnership between the two mercurial billionaires.

In today’s newsletter:

The new boss at EQT

This week Per Franzén took the reins as chief executive of EQT, the Swedish private equity firm that manages €273bn in assets. 

The Stockholm native, who is said to be as competitive a tennis player as he is a dealmaker, sat down with DD’s Alexandra Heal. 

Franzén said he could imagine infrastructure becoming the biggest part of EQT in time. This would represent a dramatic shift, as the world’s biggest buyout groups increasingly shift their focus to other strategies. 

Infrastructure accounts for about a third of EQT’s assets under management today compared with about 60 per cent for private equity, and Franzén declined to put a timeline on the shift.

But perhaps more interestingly, Conni Jonsson, EQT’s founder and chair, told Alex that the firm was looking to expand in the US because now was a particularly good time to buy. 

“We probably need to get more presence in the US. Everybody is now running away from the US. And that might be a good time for us to do more,” he said, adding that the firm could either expand in the country through mergers or acquisitions, or grow organically.

Jonsson also discussed the relative strengths of outgoing chief executive Christian Sinding and the newly crowned Franzén.

The firm’s new head was “probably a bit less of a consensus seeker than Chris has been” and that with things changing so quickly today, it was “important that we have a leader with the self-confidence to . . . make decisions fast”. 

Top on Franzén’s plate will be bedding in the firm’s massive growth under Sinding’s watch, including its acquisitions of Asian buyout shop Barings in 2022 and real estate group Exeter in 2021.

One adviser to EQT said: “If you wanted someone to go out and grow the business, [Sinding] was the guy. If you want someone to transform it into a more stable and viable platform, that’s Per.”

Will Musk work a 40-hour week at Tesla?

It’s highly rare for staid pension funds to team up against a major S&P 500 company and make demands.

But a group of 12 institutional large funds have banded together with a demand for Tesla: they want Elon Musk to work 40-hour weeks at the carmaker.

While that’s the big takeaway, the group — which includes the New York City Comptroller, the American Federation of Teachers, and Denmark’s AkademikerPension — went even further.

They called for broad corporate governance reforms at Tesla to address what they see as a “crisis”. Even though the group only holds 0.25 per cent of the carmaker’s shares, they will be hard to ignore. They manage about $950bn combined.

The tech entrepeneur has been busy lately. On top of running the White House’s so-called Department of Government Efficiency, his other companies include social media group X, xAI, SpaceX, Neuralink and the Boring Company.

Musk has gone head-to-head with activist investors before. But those hedge funds are a different calibre to the sort of sticky and deep capital that pension funds can provide.

The carmaker and Musk have been busy wrestling with shareholders in recent months. A $54bn pay deal from 2018 has twice been rejected by a Delaware trial court after a challenge by a shareholder with about 200 shares.

Any big pay package should come with a commitment to a set minimum of working hours for Tesla, the letter said. If he’s too busy with other commitments, then perhaps he should consider stepping aside?

Elizabeth Steiner, state treasurer of Oregon, who signed the letter, said: “If you’re not prepared to be the CEO of Tesla any more, that’s OK. Just help us figure out who the next CEO is.”

An activist love affair

Hedge fund Elliott Management’s activist campaign-turned-love-in with industrials giant Honeywell took its next logical step on Wednesday: partner Marc Steinberg was added to the board.

Steinberg, who also serves on the board of previous Elliott targets Etsy and Pinterest, will assume the role of independent director and audit committee member from the end of the month.

The new gig consummates one of Elliott’s most conciliatory activist campaigns in recent memory.

Honeywell’s 12-person board will play a key role as the industrial conglomerate executes a vast and complex break-up into three separate companies.

It will first spin out Solstice Advanced Materials, and hive off its aerospace division to leave a leaner Honeywell, focused on automation.

Vimal Kapur, Honeywell’s chief executive, welcomed Steinberg’s addition to the board, saying he had appreciated his “constructive insights” since Elliott went public with its $5bn stake and break-up thesis for Honeywell in November.

Steinberg’s appointment also comes with a co-operation pact, ensuring confidentiality and non-disparagement clauses for a certain period of time.

When Elliott arrived on Honeywell’s shareholder register, the company was already analysing the merits of the break-up.

That led to quick peace being brokered between activist investor and target. Within four months Honeywell had unveiled its grand plan for a three-way split.

The friendliness of Elliott’s Honeywell campaign jars with more combustible recent campaigns, including that against oil refiner Phillips 66, where Elliott won two out of four board seats at its first-ever proxy vote against a US corporation last week.

Honeywell now faces the tasks of separating one business, buying new assets to bolt on to its pure-play automation business and finding executives to run its separated units.

Meanwhile, Elliott’s in the stock for the long haul. Honeywell’s shares are just up 7 per cent from when it announced its break-up in February, giving it a market value of $144bn.

Job moves

• Stellantis has named its North American boss Antonio Filosa as chief executive, picking an internal candidate to replace Carlos Tavares after he abruptly resigned in December.

• Anthropic has named Reed Hastings to its board of directors. He’s the chair and co-founder of Netflix and has also sat on Facebook’s and Microsoft’s boards.

• Rémy Cointreau has named Franck Marilly as its chief executive to replace Eric Vallat as the business navigates a global downturn in alcohol sales and trade tensions between its two biggest markets, China and the US.

Smart reads

Privates in 401ks Private equity and credit firms have pushed hard to have their offerings in US retirement accounts, the FT’s Brooke Masters writes. But should ordinary Americans be investing in private assets?

King of DWI Criminal defence lawyer Edward Burke Jr has become the go-to guy for drunk-driving cases in the Hamptons, The Wall Street Journal writes. 

Sartorial trade-up The FT’s Bryce Elder heads to the high-end tailor Bryceland’s to try on £1,800 jackets in lieu of his supermarket garb. 

News round-up

Nvidia quarterly revenue surges nearly 70% despite China curbs (FT)

Donald Trump orders US chip software suppliers to stop selling to China (FT)

Shein shifts focus from London to Hong Kong for listing (FT)

Nissan plans $7bn fundraising with British government backing (FT)

Bitcoin price surge encourages more companies to acquire crypto (FT)

Brazilian airline Azul files for Chapter 11 bankruptcy protection (FT)

Thames Water fined £123mn over sewage leaks and ‘undeserved’ dividends (FT)

Starling Bank profits slump as it reveals Covid loans compliance hit (FT)