the world of deal mandates

One thing to start: Hedge funds have slashed their bets on equities and cut their borrowings from banks as they struggle to deal with surging market volatility triggered by US President Donald Trump’s global trade war.

And another thing: Jes Staley sent an email to his daughter referring to convicted paedophile Jeffrey Epstein as “uncle Jeffrey”, a court heard on Wednesday, as the ex-Barclays boss attempts to challenge regulators’ allegations that he played down his ties to the late financier.

In today’s newsletter:

• Dealmaker Ian Hannam gets a verdict 

• Donald Trump Jr’s big business ventures

• German defence group rides European insecurity

Ian Hannam finally gets his millions

As DD well knows, investment bankers lust after deal mandates. But rarely has it been put so poetically as by Judge Simon Gleeson at the High Court in London this week.

“Investment bankers, like teenage lovers, pour out their efforts, almost without limit and in response to the slightest encouragement in the hope of reaching the nirvana of a mandate,” Gleeson wrote on Wednesday.

Gleeson’s remarks came as part of a lengthy judgment that found the veteran banker Ian Hannam, known as the “king of mining M&A”, was due $2mn in a fee dispute.

The trial featured star bankers and cast rare light on the behind-the-scenes deliberations between corporate executives and advisers who work on major deals.

While Hannam came out on top, it wasn’t quite the payout he had hoped for. Hannam’s advisory firm Hannam & Partners demanded up to $18mn from the Canadian Mining group Barrick Gold.

The firm argued that it helped engineer a transformational 2018 merger with London-listed Randgold but was “pushed out” of the deal at the last minute.

During the trial, Barrick Gold “categorically denied” the claims, and the company’s lawyers said Randgold and Barrick had “already been discussing a potential merger for years”.

In any event, there was “no written evidence of any such alleged agreement” with H&P for the payment of fees, the lawyers said.

Barrick chair John Thornton said that while he had been happy to have Hannam’s views on the merger — as there was “very little downside” to doing so — it had always been his intention to use the Wall Street rainmaker Michael Klein on the deal.

Hannam previously told the court that he had been “shocked” to see a press release that announced the deal to create what was at the time the world’s biggest gold miner. Painfully, there was no mention of his firm.

The case underscores one of the murkier features of dealmaking: you’re not truly on the mandate, even if you’ve devoted dozens of hours of work for a deal, until you’ve signed a contract.

Even though Gleeson found that H&P hadn’t signed such a legally binding agreement for fees, he still ruled in the firm’s favour on a legal principle known as unjust enrichment.

Speaking after the ruling, Hannam said: “‘My word is my bond’ is still at the heart of a client relationship.” He said the judge had “underlined the tenets of this relationship, which have existed in the City of London for centuries”.

Hannam said his firm “never took on this litigation just for its fees. There were important matters of principle at stake.”

Trump’s son and the Maga economy

Donald Trump Jr has been raking it in since his dad won the presidential election 128 days ago. And he’s been awfully busy.

Without an official government job, Trump Jr has unrestricted access to the corporate world. He became a partner of 1789 Capital, which has invested more than $50mn in Elon Musk’s xAI and SpaceX, according to a person familiar with the matter.

And he has become an adviser to three publicly traded companies: drone manufacturer Unusual Machines, conservative online marketplace PublicSquare and fintech Dominari Holdings. In each case, the company’s share prices initially jumped.

He has also become the sole trustee of Donald Trump’s $3.2bn stake in his media conglomerate, Trump Media & Technology Group, which is the parent company to social media platform Truth Social.

Trump Jr also became an adviser to online firearm retailer GrabAGun and a board member for BlinkRx, a prescription drug delivery company.

All of that is on top of his day job at the Trump Organization, where he and his brother Eric are co-executive vice-presidents. The traditional business — resort, golf and merchandise — has lately got into digital assets with the blessing of his crypto-friendly father.

The FT reported last week that the president’s launch of his own memecoin earned at least $350mn in its first three weeks.

While it’s hard to tell how much family members earned, an affiliate of the Trump Organization and an entity called Fight Fight Fight LLC collectively own 80 per cent of the tokens.

And seemingly for fun, Trump Jr. worked on a seven-figure deal investing in Happy Dad, the hard seltzer company backed by YouTube stars the Nelk Boys, who helped Trump reach young voters during the campaign.

The German arms maker riding transatlantic tensions

Last month in Munich, US vice-president JD Vance sent a chill through a security conference with a blistering speech that spelled out the dire state of transatlantic relations.

While European attendees were unnerved by the address, the chief executive of German arms maker Rheinmetall, who was also in the crowd, was unfazed.

Armin Papperger told the FT on the conference’s sidelines that the geopolitical tensions were “good for the business”. And so far, he’s been right.

Rheinmetall’s shares have soared since Trump took office in January, with the new administration ploughing ahead with Ukraine peace talks largely without Kyiv and threatening to end decades-long security guarantees for Europe.

Europe had no choice but to dramatically boost its defence capabilities, said Papperger. And his 136-year-old maker of munitions and armoured vehicles “can make it happen”.

Rheinmetall has surfaced as a rare success in a German industrial landscape that has been plagued by decline. On Wednesday, Rheinmetall reported sales last year of €9.8bn — almost double what it made in 2021.

The company’s order backlog, at a record of €55bn, shows no end in sight for the demand boom.

European investors once shunned arms stocks on ethical grounds. Not anymore. Rheinmetall’s stock has surged 10 times higher since before Russia’s full-scale invasion in 2022. And it’s up almost 140 per cent since Trump’s presidential win in November.

Rheinmetall is not the only European company to benefit from the need for the region to bolster its defences. Italian defence company Leonardo, Sweden’s Saab, and the UK’s BAE Systems have all seen their shares surge — while US rivals have lagged.

All those companies could soon see another boost after the first exchange traded fund to focus only on European defence companies came to market on Wednesday on the London Stock Exchange.

And the new fund’s biggest holding? Rheinmetall.

Job moves 

• Donald Trump has tapped Federal Reserve governor Michelle Bowman to be vice-chair for supervision at the US central bank, a White House official said, elevating a champion of light-touch banking regulation to the post.

• Intel has appointed Lip-Bu Tan as its new chief executive, ending a months-long search for a new leader after the troubled US chipmaker’s board ousted Pat Gelsinger in December.

• HSBC has named Alex Paul to lead its internal M&A team out of Hong Kong. He was most recently global co-head of technology, digital and financial services.

• Bernard Arnault has appointed his son Frédéric as chief executive of Loro Piana, the Italian cashmere brand controlled by the luxury group.

Smart reads

Cashing in Palantir’s Alex Karp has sold $1.9bn in the data company’s shares since the start of 2024, the FT reports — all while attacking analysts who say the group is overvalued.

Gaming sell-off Games console makers were riding high until recently, with Nintendo’s shares hitting an all-time peak last month. But Donald Trump’s China tariffs have thrown a wrench in the recent surge, writes Lex.

Riding the Dragon When Nasa astronauts Suni Williams and Butch Wilmore return to Earth this week, they’ll be in a Dragon capsule designed by SpaceX, not Boeing’s Starliner, as originally planned. What went wrong, the FT asks.

News round-up

Northvolt files for bankruptcy in Sweden (FT)

Rheinmetall says it could takeover idle Volkswagen plants to produce tanks (FT)

The loyal opposition inside the SEC (New York Times)

Staley referred to Epstein as ‘uncle Jeffrey’ in email to daughter, court hears (FT)

Trump’s Big Law crackdown sends chill through legal industry (FT)

Abu Dhabi’s MGX to invest $2bn in crypto exchange Binance (FT)

Roche agrees biggest-ever obesity drug deal (FT)

Hedge funds slash bets as Trump’s trade war causes ‘a lot of pain’ (FT)

Blackstone and Goldman Sachs CEOs see upsides to Donald Trump’s policies (FT)