Bill Ackman’s uphill Berkshire climb

One scoop to start: Brookfield Asset Management is nearing an almost €800mn deal to buy the European arm of hostel chain Generator Group, in the private equity giant’s latest bet on the hospitality sector.

And another scoop: Two of FTI Consulting’s top economics experts in Europe have left to join Jonathan Orszag’s upstart rival Econic, expanding the front line in a poaching war costing the company tens of millions of dollars in lost business and higher pay needed to retain staff.

In today’s newsletter:

Bill Ackman pitches Berkshire lite  

When Warren Buffett was sowing the seeds of what would eventually become a financial powerhouse, the deals landscape looked vastly different. 

In the 1960s when Buffett took over Berkshire Hathaway, ferociously competitive private equity firms were virtually nonexistent and markets were inefficient. Using insurance money to finance investments became a decades-long secret weapon for Buffett. 

Now, competition for deals is incredibly fierce and insurance capital is funding high-octane financial empires.

Proof of just how tough it has become to find cheap deals is evidenced by Berkshire’s record $348bn cash pile.

Yet hedge fund manager Bill Ackman boldly unveiled plans last week for a conglomerate to rival Berkshire. 

He wants to transform Howard Hughes Holdings, a collection of US property assets, into a “diversified holding company” in Berkshire’s mould. 

While Ackman has invested in the Texas property developer for 15 years, his latest investment of $900mn of additional cash into the company is his long-awaited Berkshire copycat. 

Under Ackman’s purview, the $4.2bn company will shift its strategy and focus on using its cash to buy company stakes.

Right out of the gate, there are some crucial differences between the two companies.

Ackman will introduce a fee structure to Howard Hughes (unlike Berkshire, which doesn’t charge shareholders any management or incentive fees). For now, Howard Hughes also has a high cost of equity, making deals harder to pull off. 

Ackman’s big ambitions are also challenged by a mixed record on M&A-fuelled bets.

He made billions betting on the merger of Burger King and Tim Hortons. But he lost billions backing Valeant Pharmaceuticals’ plan to be a tax-advantaged pharma industry roll-up.

He also suffered large losses on a bet to turn a property trust called First Union into a conglomerate, a deal that helped spur the demise of his first fund, Gotham Partners.

Ackman maintains his Valeant and First Union investments were far different pursuits and have no bearing on his plans for Howard Hughes. 

DD’s interested in what you think of his latest play. Share your thoughts by emailing us at due.diligence@ft.com.

China’s top battery maker goes global

China’s battery king CATL is nearing the end of its multiyear quest for an offshore listing to boost its overseas expansion.

The BMW and Tesla supplier closed its book on Wednesday and is set to raise just under $5bn in what is Hong Kong’s largest listing this year. 

The battery maker is the latest global-facing Chinese company to launch what is known as an “A to H” listing, referring to a Chinese group listed on the mainland that lists in Hong Kong too.

A recent number of these including white goods maker Midea (which raised $5.2bn last year) have returned some momentum to the Hong Kong market, as well as fee relief for the territory’s equity capital market bankers.

CATL’s share sale implies approval from Beijing.

It’s one of several signs that Xi Jinping’s administration is turning to the private sector to help shore up slowing growth in the world’s second-biggest economy.

One banker on the deal said international demand for the sale was “strong”. Among the cornerstone investors were Lingotto, the vehicle backed by the Italian industrialist Agnelli family, Oaktree and the Kuwaiti sovereign wealth fund.

Other American capital would come in post-cornerstone investment to reduce scrutiny from Washington, the banker told the FT’s Edward White and Gloria Li, and DD’s Arjun Neil Alim.

The deal was nevertheless overshadowed by political pressure in the US that was escalated by CATL’s addition to a Pentagon watchlist for ties to the Chinese military.

It culminated in the House of Representatives China panel urging Bank of America and JPMorgan to cease work on the listing.

Ultimately, though, business won over and the biggest listing globally in 2025 is in its final lap.

Neither rain, nor snow, nor tariffs

It is always nice to get fan mail in the post.

That goes as well for Evri, the UK logistics company owned by Apollo, which agreed a transaction on Wednesday that will see the German logistics giant DHL take a minority stake in the group.

As part of the deal, Evri will also merge with DHL’s UK ecommerce unit to create a new entity, while positioning DHL as a “strategic partner” with the potential to deepen the relationship over time.

It comes after Apollo acquired Evri from Advent last year for roughly £2.7bn, and marks the latest deal in an active sector. 

This week’s transaction follows Polish group InPost’s takeover of the UK’s Yodel and the Czech billionaire Daniel Křetínský’s finalising of a £5.3bn deal to acquire London-listed International Distribution Services, which owns Royal Mail.

But the transaction also comes amid a series of moves by Apollo to return cash to its own investors in a tricky market for dealmaking. 

The private equity group had returned or agreed on more than $1bn worth of sales over the past week, according to a source familiar with the matter, when taking into account the Evri deal, the IPO of its US portfolio company Aspen Insurance and a trade of stock in Italian gambling group Lottomatica. 

Buyout investors are getting increasingly creative when it comes to generating returns in volatile markets. Limited partners, like postal customers of old, will appreciate the returns never mind the rain, snow or tariffs.

Job moves

• The UK Treasury has appointed Jim O’Neil as second permanent secretary, filling a gap in private sector experience in its top ranks. O’Neil is head of Emea corporate and investment banking at Bank of America. He will be replaced by Jeff Tannenbaum, who currently heads Emea capital markets at BofA.

• Deutsche Bank has appointed Samuel Kim as global head of M&A in New York. He joined Deutsche Bank in 2023 as chair of Asia Pacific M&A, from Morgan Stanley. He succeeds Alison Harding-Jones, who was promoted to global head of origination and advisory in April.

• Universal Music Group has announced that Bill Ackman has resigned from its board of directors.

• Citigroup’s commercial bank has named Wyatt Crowell as head of North America. He joins from HSBC, where he headed US commercial banking.

• Vintage Investment Partners has hired Leyla Holterud as a partner. Holterud spent nearly a decade at StepStone Group, where she led venture capital and growth equity as a managing director.

Smart reads

Jetting off China wants a fully homegrown commercial jet. Its efforts could disrupt aviation even without challenging Boeing and Airbus on the global stage, the FT’s June Yoon writes.

Fighting spirit Elliott has waged its bloodiest campaign in years at Phillips 66. The activist investor is likely to have its way, Lex writes.

De-conglomeration Hulking conglomerates once dominated America’s business landscape. The FT’s former US energy reporter Amanda Chu went on Behind the Money to discuss whether that might be changing.

News round-up

Qatar orders up to 210 Boeing jets during Donald Trump’s visit (FT)

Trading platform eToro surges on New York debut after upsized offering (FT)

French IT group Atos shelves asset sales to tap into higher military spending (FT)

Toy group VTech to move production out of China despite tariff reprieve (FT)

Dick’s Sporting Goods nears deal to buy Foot Locker (WSJ)

Western carmakers risk wipeout in China, warns Jeep owner Stellantis (FT)

China’s Baidu in talks to launch robotaxis in Europe (FT)

Foreign states to be allowed to take 15% stake in UK newspapers (FT)