US army in $150bn revamp talks

Good morning and welcome back. In today’s newsletter:

• US army in talks with private equity for overhaul

• German banks pitch PE funds to retail investors

• EU considers listing ethanol as harmful to humans

• Dutch government plans to send migrants to Uganda

We begin in Wall Street, where the US army has asked private equity groups including Apollo, Carlyle, KKR and Cerberus to pitch “meaty” strategic projects to help the service fund a $150bn infrastructure overhaul.

What we know: US army secretary Daniel Driscoll and Treasury secretary Scott Bessent held a forum with about 15 of Wall Street’s best-known buyout firms yesterday to discuss deals.

Driscoll, the service’s top civilian official, said he asked the groups to draw up “unique financing models” to help meet the army’s infrastructure needs. “We actually just want meaty projects,” he said.

Why it matters: The proposals mark the latest example of the Trump administration’s efforts to work with the $13tn private capital industry and enlist some of Wall Street’s biggest investors in US national security. Read more for details of the discussions.

Here’s what else we’re keeping tabs on today:

• Central banks: Bank of England governor Andrew Bailey gives evidence to a House of Lords committee on the growth in private markets.

• Nicolas Sarkozy: The former French president will begin a five-year sentence for criminal conspiracy in a campaign financing scandal.

• FT Live: This year’s FT Africa Summit starts in London, gathering policymakers and business leaders to discuss the continent’s future direction. Register here.

• Results: 3M, Capital One, Coca-Cola, General Motors, Halliburton, Lockheed Martin, Nasdaq, Netflix, Northrop Grumman, Philip Morris and UniCredit report earnings. See our Week Ahead newsletter for a fuller list.

Five more top stories

1. German retail banks are pitching private equity funds to small-scale investors, with lenders such as Deutsche Bank seeking to cash in on the expanding asset class. The rush to target wealthy individuals comes as private capital groups seek fresh sources of funds. Read the full report.

2. The EU is considering classifying ethanol as a dangerous substance that increases the risk of cancer. But the move to classify the chemical as harmful to humans would mean a de facto ban on many hand sanitisers and detergents used by hospitals. Andy Bounds has more from Brussels.

3. A second act for the billionaire credited with a key role in building modern Dubai takes Mohamed Alabbar beyond the United Arab Emirates and the world’s tallest building, with his global footprint now stretching from Egypt and Serbia to Madagascar. Chloe Cornish interviews the Gulf’s most prolific billionaire businessman.

4. The Dutch government is preparing to send migrants to Uganda under a deal similar to one struck by the Trump administration, despite possible legal and practical challenges. Read the Financial Times’ interview with foreign affairs minister David van Weel about the planned “transit hub”.

5. US President Donald Trump’s announcement that his next meeting with Vladimir Putin will be hosted by the pro-Russian prime minister of Hungary has alarmed European capitals after the US president’s apparent siding with Moscow on how to end its war in Ukraine. Read more on the planned Budapest summit.

The Big Read

German Chancellor Friedrich Merz campaigned on a promise of reform. But he now faces a stagnating economy and a sceptical public as well as a far-right party Alternative for Germany that is gaining momentum. Read how the pressure is rising for Merz to deliver.

We’re also reading . . . 

• Demographic doom-mongering: Stephen Bush doubts that the human race is going to become the first species in history that chooses to go extinct. Here’s why.

• African business: Electric motorbike manufacturer Spiro has raised $100mn in what it says is the biggest capital raise in the continent’s e-mobility sector.

• Pocket problem: Sarah O’Connor prefers a smaller mobile phone. But capitalism is not giving her what she wants. Are manufacturers the ones to blame?

Join Sarah and John Burn-Murdoch for a live Ask an Expert Q&A on Thursday as they tackle your questions on how AI is reshaping the world of work. The conversation coincides with the launch of ‘The AI Shift’, their new newsletter, which you can sign up to here.

Chart of the day

The upfront cost for top scientists coming to work in the UK is more than 20 times higher than the average for other leading research nations apart from the US, hindering efforts to recruit global talent, according to research commissioned by the Royal Society.

Take a break from the news . . . 

Ghost tours are a thriving branch of Edinburgh’s booming tourism industry. But it is more fun, perhaps, to seek out the city’s shades by yourself. Mure Dickie provides us a haunting itinerary through the Scottish capital.