Highlights from the FT’s Banking Summit

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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

One scoop to start: Permira has selected Bank of America, JPMorgan and Mediobanca as joint global co-ordinators for the forthcoming market listing of the private equity group’s Italian luxury sports shoe brand Golden Goose.

And two big things, first: Saudi Arabia’s sovereign wealth fund is taking a £1bn stake in London’s Heathrow airport as the infrastructure group Ferrovial offloads shares in the UK travel hub it has owned for 17 years.

Finally: Charlie Munger, the sharp-witted vice-chair of Berkshire Hathaway and investment partner of Warren Buffett, died at the age of 99 on Tuesday morning at a California hospital, the US investment conglomerate said in a statement.

In today’s newsletter:

Banking chiefs gather in London (minus Barclays boss)

Those attending the Financial Times Banking Summit this week may have noticed there was one important attendee missing: Barclays chief executive CS Venkatakrishnan.  

If Richard Buxton, the former head of UK equities at Jupiter Asset Management, is to be believed, Venkatakrishnan pulled out after the FT published a deep dive earlier this month into whether the bank can move past years of scandal and stagnation. 

During a session on Tuesday, Buxton, a long-term shareholder in Barclays, laid into the bank.

“They have taken over from Standard Chartered as the banana skinned bank. They always find [something] to slip on.”

Even though Venkatakrishnan decided not to attend, Barclays talk dominated the chit-chat at the conference after the FT’s Stephen Morris revealed that the bank is exploring a plan to drop thousands of its investment banking clients as part of a strategic overhaul to cut costs. 

“I don’t think that in my working lifetime and beyond I will ever see Barclays trade above book value,” said Buxton. “It is about flawless execution and delivery and just not falling on those bananas.”

Beyond Barclays, the banking summit delivered plenty of news with a start-studded line up that included Goldman Sachs chief executive David Solomon (just don’t talk about his DJing), UBS chair Colm Kelleher and City of London minister Bim Afolami. Here’s the best of the banking news: 

• As bonus season approaches, the intense competition for top talent will influence how Goldman pays employees, Solomon said. 

• Solomon also said that Goldman is taking a more cautious approach to China amid tensions between Washington and Beijing. 

• Kelleher is hoping to have a shortlist of three potential successors for chief executive Sergio Ermotti within the next “couple of years”, and said external hires would also be considered. 

• Afolami delivered what sounded like music to bankers’ ears, arguing that UK regulators need to allow more risk-taking. “Animal spirits need to be there,” he said on Tuesday in an interview with Stephen. 

• Charlie Nunn, the CEO of Lloyds Banking Group, urged the government to facilitate a “level playing field” with other markets on their financing of the green transition.   

• And JPMorgan Chase, a new entrant challenging Lloyds’ retail banking dominance in the UK, expects its UK retail arm to break even in the next 12 to 18 months, according to JPMorgan president Daniel Pinto. 

Oh, and last but not least. Solomon, who has promised to give up high-profile DJing gigs, told the FT’s Patrick Jenkins that he recently DJed at his daughter’s wedding.  

Norway really wants in on private equity 

By most accounts, the private equity industry is in a difficult spot. But that isn’t stopping Norway’s $1.4tn sovereign wealth fund from trying to get in on the action — for the fourth time. 

In a letter published yesterday morning, Norges Bank Investment Management made its case to be able to invest in private markets. 

Led by former hedge fund manager Nicolai Tangen, NBIM argued that backing buyout firms was a “natural evolution of the fund’s investment strategy”. Also, that it was a necessary one, given that private markets have taken market share from their public counterparts over the past decade.

Many of NBIM’s counterparts, including Middle Eastern and Chinese sovereign wealth funds, as well as large North American pension plans, have invested heavily in the asset class for decades. Doing so has helped them establish close relationships with Wall Street giants like Blackstone Group and KKR who provide access to deal flow and expertise managing the investments.

Their motivation for doing so is simple. The chief executive of Canada’s influential Canada Pension Plan Investment Board told the FT’s Harriet Agnew and DD’s Will Louch, “people invest in private markets because of returns”.

But there are sceptics. Private equity remains a controversial asset class in a strongly social-democratic country like Norway. It also remains expensive and opaque, jarring with NBIM’s transparent ethos. The Norwegian government has already rejected at least three previous attempts to expand into the asset class.

Private equity executives are likely to be following developments closely. The industry is in the middle of a fundraising crunch as many institutions have pulled back from new commitments as they wait to receive cash back from previous investments.

The emergence of a powerful, deep-pocketed investor like NBIM would be a big positive for the industry. Whether it would be good news for the beneficiaries of Norway’s sovereign wealth fund remains to be seen.

Job moves

• Saga, the UK provider of services to over-50s, has said its chief executive Euan Sutherland will be replaced by its chief financial officer Mike Hazell.  

• Adams Street, which manages about $58bn in assets, has named Michael Kurlander as partner and chief financial officer. He spent much of his career at Goldman Sachs and Citadel. 

• ICG, an $81bn asset management firm, has hired Adam Gross and Anne-Marie Peterson as managing directors in its North American private debt team.

Smart reads

New money Led by former Sequoia partner Michael Abramson, the secretive two-year-old firm Newlands has quietly invested billions of dollars in companies like Alphabet and Amazon, Forbes reports. 

Tangled up US security officials are trying to unpick the relationship between G42, an Abu Dhabi-based artificial intelligence group, and the Chinese state, The New York Times writes.

Olive Branch Broadcom chief executive Hock Tan paid $40,000 to have dinner with Chinese leader Xi Jinping. Soon after, China signed off on Broadcom’s bid to buy software developer VMware, The Wall Street Journal reports.

News round-up

Funding for European technology companies plunges by nearly half (FT) 

Atos in talks to change terms of Křetínský deal for IT services unit (FT)

UK warns Adobe’s $20bn deal for Figma would harm competition (FT) 

UK bans vague ‘sustainability’ fund labels in greenwashing crackdown (FT) 

Fidelity and Abrdn agree £1.2bn China trust merger (FT)

Fast fashion: Shein is no shoo-in for pricey IPO (FT)