FirstFT: Private equity to lobby Trump as industry seeks to tap retirement funds

Good morning and welcome back to FirstFT. On today’s agenda we have:

• Private equity’s hopes for the incoming Trump administration

• Ukraine launches fresh push for Russian territory

• Ruchir Sharma’s top 10 trends to watch in 2025

• And chef Clare de Boer shares her favourite places to eat in New York

The private equity industry is preparing to lobby Donald Trump’s incoming administration to give it access to broad pools of capital it has not historically been allowed to tap, including retirement savings.

The $13tn industry is hoping the new White House will revive a deregulatory push from the final months of Trump’s first presidency, which allowed private equity investments to be included in professionally managed funds.

Executives told the Financial Times that the industry was seeking to push past that first step and allow tax-deferred defined contribution plans, such as 401ks, to back unlisted investments such as leveraged buyouts, low-rated private loans and illiquid property deals.

The executives said that the effort could give their higher-fee funds a chance to tap a class of investors with at least as much in assets as the sovereign wealth funds, pensions and endowments that have traditionally backed the world’s largest groups such as Blackstone, Apollo Global and KKR.

Industry representatives said the deregulatory push was akin to “doubling demand” for the industry’s various funds. Read the full report.

We are publishing a special edition of FirstFT Americas in the run-up to Donald Trump’s inauguration. Do you have any questions about the incoming administration? Please send them to firstft@ft.com and include your name and location and we will forward them to our experts for an answer and publish the results on Saturday January 18.

And here’s what else we’re keeping tabs on today:

• Canada: Local media reports suggest that Justin Trudeau is preparing to resign and could step down as early as today. The Canadian prime minister has faced growing criticism over his government’s budget.

• New York: Today marks the first working day of operation for New York’s controversial congestion charge scheme, which stretches from the bottom of Central Park to the southern tip of Manhattan.

• Snowstorm: The polar vortex that has caused chaos across much of America is threatening to disrupt commuters in Washington and Baltimore. Follow updates from the national weather service.

• Economic data: The US and Canada release services purchasing managers’ indices for December.

• Central banks: US Federal Reserve governor Lisa Cook gives a speech on the economic outlook and financial stability at a conference in Ann Arbor, Michigan.

• WWE on Netflix: Tonight’s “Monday Night Raw” kicks off a 10-year, $5bn partnership between the entertainment brand and the streaming service as Netflix pushes deeper into live sports coverage.

Five more top stories

1. China’s currency dropped to a 15-month low and its stock markets extended their poor start to the year as investors worried about the impact of the incoming Trump administration on the world’s second-largest economy. Weak manufacturing data added to the sense of unease. The falls prompted authorities to intervene.

2. Investment banks are bracing for a crunch year in which they must deliver a step change in deal fees to justify record share prices and expensive hires made during a two-year downturn. The six listed independent investment banks — Evercore, Lazard, PJT, Moelis, Perella Weinberg and Houlihan Lokey — reached record highs in recent weeks. Here’s more on the outlook for investment banking and dealmaking this year.

3. Ukraine’s forces have launched a surprise new offensive in Russia’s southern Kursk region, even as its troops are struggling to hold the line elsewhere. The renewed push comes after Ukraine is estimated to have lost about half of the 1,200 sq km it captured in August in the Russian region. Here’s the latest on the war in Ukraine, which is nearing the end of its third year.

4. Accounting firms are trying to block new rules that would reveal how many hours are being worked by auditors of US public companies and how much training and experience they have, saying the information risks being misinterpreted by investors. Read more on the new disclosure rules.

5. Elon Musk has called for Nigel Farage to be replaced as leader of Reform UK in a surprising U-turn hours after the British politician refused to endorse some of the tech billionaire’s latest online claims. The disagreement appears to be over Musk’s support for jailed rightwing activist Tommy Robinson.

• Keir Starmer vs Elon Musk: The British prime minister responded to comments by the billionaire about historic sex abuse scandals in the UK. “A line has been crossed,” he said.

The Big Read

Projections about the coming year assume the Trump administration will dictate mar­ket shifts, argues Ruchir Sharma, but the world is not unipolar and does not revolve around one personality — even one as big as Trump’s, he says. Contrarian investing will make a return in 2025 and don’t discount China. Here are Ruchir’s top 10 trends to watch in 2025.

We’re also reading . . . 

Chart of the day

According to Joseph Schumpeter, creative destruction is central to long-term economic growth, as it enables people, capital and other resources to be better deployed. A glance at the US would suggest it is alive and well. But pan out, and signs point to declining business dynamism, writes Tej Parikh. And sign up for Tej’s new newsletter, Free Lunch on Sunday, which in its first edition looked at the case for investing in Europe’s unloved equity market.

Take a break from the news

From Lebanese and Italian in Brooklyn to Korean in Midtown and an old-school NYC lunch counter in Flatiron, restaurant owner Clare de Boer picks her favourite eateries on this eclectic tour of the Big Apple’s world of flavours for FT Globetrotter.

Source: Economy - ft.com