Deals are back, baby (for real this time?)

Some hedge fund winners to start: A number of cryptocurrency-focused hedge funds have made a windfall in recent weeks as Donald Trump’s election win fuelled a powerful rally that propelled bitcoin above the $100,000 milestone.

And a high-price offer: Soho House shares surged nearly 70 per cent after the company announced it had received an offer to buy it at a premium to its current market value, following years of stock price struggles.

And one note from team DD: We’ve made it to the final newsletter of this year. We’re taking a break for the holidays and will return to our regular scheduled programming on Tuesday, January 7 (but look out for a special edition in your inbox in early January). Thanks for reading and happy new year.

In today’s newsletter:

Dealmakers are ‘cautiously optimistic’ — but really, this time

We’ve heard it before. “Deals are back.”

Investment bankers and lawyers, made optimistic by their business model of earning fees on each completed deal, have for two years insisted that a reversal in a years-long slump is right around the corner.

A massive backlog of mergers and acquisitions, put on hold because of elevated interest rates, and geopolitical instability, will spill out just as soon as the Federal Reserve cuts interest rates. Or next quarter. Or the one after that.

But heading into next year, DD’s feeling more convinced. The value of M&A globally rose 11 per cent this year from the doldrums of 2022, when dealmaking fell short of its $3tn benchmark for the first time in a decade, DD’s Ivan Levingston and Maria Heeter write.

That (slight) increase — driven by megadeals such as Capital One’s $35bn purchase of Discover Financial, and Mars’s $36bn deal for snacks maker Kellanova — is only set to tick up with the arrival of Donald Trump to the White House, advisers and other market watchers say.

Already, corporations are taking heftier swings. How should we interpret Mondelez’s reportedly shortlived attempt for Hershey, and Japanese carmakers Nissan and Honda’s early-stage merger discussions?

According to one lawyer, those are signs the market is “functioning again”.

“Boards and companies are doing what they’re supposed to do, which is to rigorously look at their portfolio of businesses and say, ‘What makes sense to drive value?’,” Anthony Vernace, a partner at Simpson Thacher & Bartlett, told DD.

Trump’s new antitrust picks have further bolstered hopes of a comeback, even as outgoing Federal Trade Commission chair Lina Khan won a decisive victory after two separate judges blocked Albertson’s $25bn acquisition of rival US retailer Kroger, what would have been the largest supermarket deal in history.

Andrew Ferguson, who’s set to chair the FTC, has pledged to undo Khan’s agenda. And Gail Slater, who Trump has nominated to lead the Department of Justice’s antitrust division, is seen as a strict watchdog, but seems primarily focused on Big Tech.

“We will see that deals will get done,” George Casey, the global chair of corporate at law firm Linklaters, told DD.

“Maybe with remedies — but they’ll get done, whereas in the past, those deals were blocked. So that bodes well for M&A activity overall.”

‘Don’t mess with BX’: Battle of the holiday videos

Blackstone and Apollo used to fight for bragging rights on who had the biggest flagship fund. Now the battle’s over YouTube views.

In the past two days, the biggest alternative asset managers in the world released competing holiday videos back-to-back. Apollo played it safe with some frozen yoghurt and annuity jokes. Meanwhile, Blackstone’s was wild.

The House of Schwarzman’s annual foray into filmmaking is a tradition seven years running. Each one has outdone the last, both in production quality and absurdity. Last year’s Taylor Swift-themed video racked up 8mn views across social media.

This year’s is a mockumentary on how badly last year’s video went over. The production involved about 200 employees, a source tells DD, and includes cameo appearances by BlackRock chief Larry Fink and Real Housewives of New York City star Jenna Lyons.

Other highlights from the Blackstone video: Jonathan Gray rides a mechanical bull, Stephen Schwarzman is on a horse in Midtown Manhattan, and there’s a choreographed dance with two dozen employees in full cowboy gear. Also, might vice-chair Tom Nides have a future in acting?

For contrast: the craziest thing that happens in Apollo’s video is partner Dennis Cornell wearing a Renaissance-style cavalier hat.

If we’re deciding a winner based on pure views alone, Blackstone’s offering is ahead. It had more views in the first 15 minutes than Apollo had in its first 24 hours. (Not that they’re counting, obviously.)

But our friends at FT Alphaville sliced right through all the singing and rodeo-ing.

Bryce Elder wrote: “It’s all just a bit of fun, right? No. It’s not. It’s fun-washing. It’s conscripted corporate levity for the purposes of laundering a reputation, and the blackest stones of all are the ones in our hearts.”

DD figures Blackstone’s extravagant production is proof that it was another lucrative year for its top ranks. Though — per the item above — limited partners will have to hope next year brings more deals and better cash distributions.

PS: While we’re away, check out the FT’s new India Business Briefing newsletter, a must-read on business and policy in the world’s fastest-growing large economy. Sign up here to get the newsletter delivered to your inbox every Tuesday and Friday.

Job moves

• Lord Peter Mandelson, former Labour cabinet minister and EU commissioner, is to become Britain’s next ambassador to Washington. He’ll take up the post next month. 

• Felix Capital’s Julien Codorniou is set to become a general partner at 20VC, the venture capital firm launched by podcaster Harry Stebbings, TechCrunch reports.

• Tesco has named Chris Kennedy to its board of directors. He’s the chief financial officer and chief operating officer of ITV. 

• Jones Day has named 37 lawyers as partners globally, in practices ranging from financial markets to securities litigation.

• Applus Services has named Mike Smith as chair effective immediately, after the testing and inspection company was delisted by TDR Capital and I Squared Capital, a source told DD.

Smart reads

Concentrated bets Venture capital’s wager on artificial intelligence shows that the industry is focusing money on larger deals at a time of extreme indigestion from start-up investors, the FT’s Richard Waters writes.

Custom portfolios Wall Street is selling separately managed accounts that promise tax savings to the masses, Bloomberg reports. Are they worth the price?

Ghost artists As a musician, making money on Spotify can be elusive at best. It turns out the streaming service has an elaborate internal programme that stacks the odds even further against them, Harper’s Magazine writes.

News round-up

Segantii founder Simon Sadler pleads not guilty to insider dealing in Hong Kong (FT)

EY wins first Dax audit client since Wirecard scandal (FT)

Smart ring start-up Ōura raises $200mn as valuation leaps to $5.2bn (FT)

FCA apologises for delay in shutting fraudulent peer-to-peer lender (FT)

Activist Palliser seeks to force Rio Tinto into reviewing London listing (FT)

Ottimo raises $140mn in pursuit of ‘$100bn market’ for new cancer drugs (FT)

Walmart pushes back climate change targets (FT)