Jony Ive and Sam Altman take on Apple

One scoop to start: US industrials group Honeywell has agreed a £1.8bn all-cash deal to buy the catalyst technologies arm of FTSE 250 chemicals company Johnson Matthey.

And another thing: Investor Steven Wood has failed in his bid to win a board seat at Swatch Group, after the powerful Hayek family voted against his resolution at the struggling watch group’s annual meeting.

In today’s newsletter:

• iPhone designer teams up with OpenAI

• Trump considers 401k order

• Elliott wins Phillips 66 board seats

OpenAI takes on the smartphone

Jony Ive has re-emerged with a next act that may further cement the British iPhone designer as one of this era’s most influential technologists.

Ive, who designed products used by more than a billion people worldwide, has struck a $6.4bn deal with OpenAI, which will buy his artificial intelligence device start-up io and bring him into the fold at the ChatGPT maker.

It puts him squarely at the heart of OpenAI, a company that has led the way on AI. Many see its ChatGPT software as the most disruptive new technology since the iPhone.

The acquisition is a further bet from OpenAI chief Sam Altman on Ive’s design prowess.

OpenAI already held just under a quarter of io’s shares but it paid a further $5bn for full ownership. The start-up’s 55 staff will join OpenAI, but Ive himself won’t become an employee.

Instead, he’ll take on “deep creative and design responsibilities across OpenAI and io”, according to a statement on OpenAI’s website.

Ive left Apple in 2019, bringing to an end a decades-long career in which his fingerprints could be seen on many of the tech giant’s biggest breakthroughs.

In recent years he’s been quietly plotting a second act and a year ago he set his eyes on bringing his hardware prowess to AI software.

Wednesday’s announcement was light on details but one person close to OpenAI said it was working on “something totally different [to a phone] . . . a completely new surface”.

Earlier this month, Ive said he was working on the “unintended consequences” of the iPhone, referring to the social ills smartphones have wrought.

OpenAI’s purchase may put Ive in competition with his former employer.

Apple has been playing catch-up on AI, after falling behind in the race to develop the technology. It struck a high-profile partnership with OpenAI to integrate ChatGPT into its voice assistant Siri, which has experienced setbacks in recent years.

An image released on OpenAI’s website shows Ive with his hand on Altman’s shoulder. It looks like a reference to the close relationship between the English designer and the late Apple co-founder Steve Jobs.

Ives’ intent is clear, but whether he can replicate the success of his most famous partnership remains to be seen.

Investors certainly think so: Apple’s market cap fell by $45bn on news of the deal.

Private capital’s 401k dream nears reality

Private capital groups have been itching to get their hands on America’s retirement savings. US President Donald Trump is weighing up options to help make their dreams come true, the FT scooped today.

The Trump administration is considering an executive order that would order government agencies including the Treasury to study the feasibility of opening so-called 401k retirement plans to private funds.

Such plans, which hold trillions of dollars in assets, allow Americans to invest a portion of their salaries in publicly traded securities free of tax. They’re among the most popular ways people in the US save for retirement.

But the White House is still deliberating whether to issue the executive order, or take other actions. It would be a coup for private capital groups, which have been lobbying for access ever since Trump’s first term in office.

Near the end of his first presidency, Trump’s labour department, then led by Eugene Scalia, the son of the late Supreme Court justice Antonin Scalia and a current Gibson Dunn partner, issued a directive allowing private equity investments to be a part of retirement-oriented funds.

Industry executives, including Apollo chief executive Marc Rowan, argue that private funds have the potential to earn higher returns that match the long-term nature of retirement plans.

But the large asset managers that oversee retirement funds were reluctant to adopt the changes at the end of Trump’s first term, worried that they might be sued for breaching their fiduciary duties.

Regulators under former president Joe Biden tried to slow the push of PE into 401ks given the investments are less liquid, come with higher fees and leverage, and are valued less transparently.

Retail investors thinking of jumping into private capital funds want to listen to warnings coming from the industry.

Orlando Bravo, the billionaire co-founder of buyout firm Thoma Bravo, told DD’s Alexandra Heal that there was a risk retail investors could end up being sold funds that nobody else wanted.

“Retail could end up saving these companies that people cannot sell,” he said.

Elliott wins board seats at Phillips 66

One of the most important activist campaigns in recent memory came to a denouement on Wednesday.

Elliott Management won two seats on the board of Phillips 66, capping a multiyear campaign in which Elliott pushed the oil refiner to improve its performance.

Elliott wanted Phillips 66 to sell assets, clean up its corporate governance and focus on its core business of oil refining.

The proxy vote was a big moment for the hedge fund, which put forward four nominees to shake up Phillips 66’s board of directors.

Elliott had got close to the brink of a shareholder vote against a US company on three previous occasions, but this was the first time it had gone all the way.

Shareholder activism has receded in recent years and even Elliott has reined in its campaigns compared with its theatrical campaigns of yesteryear.

But Wednesday’s vote was a test of Elliott’s power and its ability to sway shareholders in a new landscape that has put many activists on the retreat.

Ahead of the vote, the momentum was with Elliott. The hedge fund won the backing of influential proxy advisers Glass Lewis and Institutional Shareholder Services.

But fund management behemoths BlackRock, State Street and Vanguard voted against Elliott’s preferred directors, causing a split vote that won Elliott board seats but not the submission of its target.

Nonetheless, Elliott will emerge with its reputation as a fearsome combatant intact.

Even though it didn’t get all four of its favoured candidates into the boardroom, the two spaces Elliott did claw will give it a seat at the table with Phillips 66’s decision makers.

The status quo at Phillips 66 is untenable.

Job moves

• McKinsey has appointed Michael Birshan to head its UK office, DD reports. He joined the firm in 2002 and most recently co-led its strategy and corporate finance practice. He succeeds Tunde Olanrewaju, who will become managing partner for Europe.

• BNP Paribas has appointed Jolyon Luke as its head of financial institutions coverage for the UK. He will also continue in his current role as head of FIC UK advisory.

• The Cashmere Fund has named former J Crew president and The Real Housewives of New York star Jenna Lyons as a partner and investor.

• Advent International has named Mike Ettling as an operating partner. He was previously chief executive of Unit4, a cloud software vendor formerly owned by Advent.

• Simpson Thacher has appointed Anat Holtzman as a partner in the firm’s private funds practice in Washington. Holtzman was previously a managing director at private capital group Carlyle.

• Felix Capital has appointed Laurent Droin as a partner. He joins from Eurazeo.

Smart reads

iPhones thieves Ever had your phone stolen? There’s a chance it ended up in China’s “stolen iPhone building”. The FT paid it a visit.

ChatGPT addict Many young workers are becoming dependent on AI tools, writes Bloomberg’s Parmy Olson. Here’s how one 23-year-old broke his habit.

Smart listens DD generally skips Nicolai Tangen’s podcast, but his interview with The Children’s Investment Fund founder Chris Hohn is well worth a listen. Tangen’s Norges Bank also hosted a discussion with Hohn and EQT’s Christian Sinding that’s worth tuning in to.

News round-up

Donald Trump considers order to open US retirement plans to private equity (FT)

HSBC warns of bonus cuts for staff who work from home too much (FT)

JPMorgan opens geopolitics arm as Dimon warns of ‘hinge point’ (Bloomberg)

Banks’ links to private credit could pose systemic risk, says Boston Fed (FT)

CoreWeave raises $2bn in junk bond offering (FT)

Marsh McLennan settles $143mn lawsuit over role in Greensill collapse (FT)

Daniel Loeb’s Third Point Investors in deal to create London-listed insurer (FT)

Spain eases rules in bid to stop IPOs being derailed by market turmoil (FT)

Bloomberg terminal outage hits traders (FT)

M&S blames ‘human error’ for cyber attack that will hit profit by £300mn (FT)