BlackRock answers Trump’s call

One scoop to start: Billionaire Izzy Englander is exploring opening up the ownership of his $76bn hedge fund Millennium Management to its top executives for the first time, in the latest step to prepare it for life beyond its founder.

And one important investigation: Canada’s Brookfield Corporation, one of the world’s most complex financial conglomerates, is attracting scrutiny for circular flows of cash involving its global property portfolio. This FT Investigation asks: How much does Brookfield really make?

In today’s newsletter:

• BlackRock to buy Panama Canal ports 

• The hidden dangers of family offices

• The star trader’s dilemma 

The billionaire elite who answered Donald Trump’s call on Panama Canal

It’s only five months since BlackRock completed its $12.5bn purchase of Global Infrastructure Partners. But the infrastructure investment has already delivered on Larry Fink’s big ambition to put the world’s largest asset manager at the forefront of private markets, writes Eric Platt in New York.

Last week, BlackRock and GIP led a $23bn deal to buy 43 ports owned by billionaire Li Ka-shing’s CK Hutchison, including two at either end of the Panama Canal, the critical juncture that connects the Atlantic and Pacific oceans.

The surprise deal left rivals scratching their heads about both the speed (talks lasted just weeks) and somewhat informal nature of the sales process, which Goldman Sachs helped oversee.

Fink, speaking at an RBC conference last week, said the Panama ports deal pointed to the “logic” of the tie-up between BlackRock and its three private investment acquisitions last year: GIP, HPS Investment Partners and data provider Preqin. 

Public and private markets, he added, were “blending” faster “than I ever envisioned . . . We were growing all our private markets business, especially in infrastructure and private credit, but we were not growing as fast as the world was growing in those areas,” he said. “So we did these two other acquisitions.”

Fink — and his enviable Rolodex — played a crucial role in the ports deal. The 72-year-old billionaire personally briefed the Trump administration, including both the president himself and secretary of state Marco Rubio, who has been a key figure in Trump’s push to retake the canal. 

Meanwhile things haven’t been quiet at HPS either, even if all eyes last week were on Panama. The credit investment shop clinched a major deal, agreeing to lend $1.5bn as part of the up to $24bn buyout of Walgreens Boots Alliance.

For BlackRock’s private markets push, things are only just beginning.

Read the full story here on the billionaire elite who answered Trump’s call on the Panama Canal.

The hidden dangers of family offices

Who’s running your family office? Your lawyer, your private banker, your . . . yoga teacher?

While browsing English legal cases to research this must-read Big Read on the use and abuse of family offices, my colleagues Josh Spero and Owen Walker came across this striking example: an Australian man living in Monaco had asked his yoga instructor to set up his family office in London. (The legal case was even more bizarre than this suggests.) It’s not the grey-bearded consigliere of old, that’s for sure.

Family offices are generally understood to be small companies which can manage a rich person’s investments, business and legal affairs; some also offer philanthropy and lifestyle services, from the kids’ education to walking the dog.

But there are few legal definitions to maintain the integrity of the term “family office”, with plenty of tax sweeteners and regulation exemptions for those who do use it. It has created a ripe environment for chancers and miscreants to take advantage.

Why does this matter? Well, consultancy Deloitte estimates that, globally, there will be 11,000 family offices by 2030, with total assets of $5.4tn. This is more than the entire hedge fund industry currently manages. Critics fear investments on that scale are systemic, as we saw with the collapse of Archegos Capital Management, Bill Hwang’s now infamous family office, which helped up-end Credit Suisse. 

The rise of the family office as a force in global investing is prompting questions and concerns both from detractors and people within that world. What are they, really? How should they be regulated? And what would the economic consequences be if they are not reined in?

“The big private equity and wealth management industry pretty much captures our political system,” says Chuck Collins, director of the Program on Inequality and the Common Good at the Institute for Policy Studies in Washington. “It’s the Wild Wild West part of the economy.”

Where are family offices open to abuse? Email me: harriet.agnew@ft.com

Chart of the week

The $4.5tn hedge fund industry has undergone a shift away from the days when the lions of macro trading like George Soros, Paul Tudor Jones and Louis Bacon placed huge wagers on swings in interest rates, currencies and equities. Instead, the industry has professionalised into polished businesses — multi-manager firms like Citadel, Millennium Management and Point72 — that have tried to de-emphasise the investment prowess of a founder.

The star traders that remain now face the challenge of proving to investors that the hedge funds they created can thrive without them.

In this Big Read, Costas Mourselas and I take you inside two big hedge funds whose founders are trying to do exactly that: Brevan Howard and Rokos Capital Management. The onetime colleagues turned rivals are both grappling with a perennial issue that faces hedge funds with a talented individual at their centre: how to create a sustainable business that can outlive them.

Alan Howard, 61, has seemingly created a durable business powered by the efforts of a team, but amid a recent run of poor performance he has been more involved with the master fund, raising the question of whether he can ever truly disentangle himself from the eponymous firm where he is the majority owner. 

For his part, the 54-year-old Chris Rokos has leaned into his star trader credentials but in doing so has — as things stand — complicated the prospect of the firm outlasting him. People close to the firm say RCM is bigger than one man and succession is not an immediate concern. 

History suggests evolution is inevitable. “Most hedge funds either become firms that handle multiple portfolio managers . . . or they die with the founder,” says Rick Sopher, CEO of wealth manager Edmond de Rothschild and chair of LCH Investments, which has been investing in hedge funds since 1969.

Five unmissable stories this week

“I love punching a bully in the nose.” He’s the Wall Street mogul trying — so far unsuccessfully — to shake up the UK investment trust sector. Saba Capital’s Boaz Weinstein has Lunch with the FT. 

Stanley Druckenmiller has spent years quietly running his family office. Now one protégé is Treasury secretary and another is vying for Federal Reserve chair. ‘Druckonomics’: how the Wall St veteran is poised to shape America’s new economic order.

Schroders’ new chief executive Richard Oldfield outlined plans to save hundreds of millions of pounds in costs as part of a strategy aimed at restoring its fortunes . . . meanwhile his predecessor Peter Harrison has just joined Lazard’s board of directors. 

Norges Bank Investment Management, Norway’s $1.8tn sovereign wealth fund, has made its first investment with an external long/short equity hedge fund, and plans to allocate billions of dollars more to this strategy as it tries to boost returns.

Last year Abrdn increased profit for the first time in three years in 2024. But this was overshadowed by the news that the UK asset manager has rebranded itself as Aberdeen after it was widely ridiculed for removing most of the vowels from its name.

And finally

London’s National Gallery is showing works unseen together for hundreds of years in an exhibition that looks to the dawn of a new era. How Renaissance Siena changed art history forever.

March 8-June 22, nationalgallery.org.uk