Wall Street’s activist battle against the Ivy League

Two scoops to start: Billionaire “vaccine prince” Adar Poonawalla has reached a deal for London’s most expensive home sale of the year, agreeing to pay about £138mn for a 25,000 square foot Mayfair mansion.

And: One of Europe’s largest activist investors Cevian Capital has made gains of almost 20 per cent this year, helped by the strong share price performance of building materials group CRH, which this year switched its primary listing to New York.

Wall Street titans target their former universities

For decades, Ivy League universities have courted the deep-pocketed financiers that once roamed their halls to feed their multibillion-dollar endowments.

But accepting big cheques from powerful donors can also come with drawbacks.

Harvard, the University of Pennsylvania and the Massachusetts Institute of Technology have learnt that the hard way over the past several months, after some of their most powerful alumni have accused them of failing to tackle antisemitism on their campuses following Hamas’s October 7 attack on Israel, the FT’s Joshua Chaffin chronicles in this Big Read.

Leading the charge is Bill Ackman, the Harvard alumnus and hedge fund billionaire who after abandoning the use of aggressive campaigns at his Pershing Square Capital Management has been invoking his flair for activism to rally for a more personal cause.

The activist, known for waging battles at companies including JCPenney, Allergan and Canadian Pacific Railway, is employing the same bare-knuckle tactics at his alma mater, including calling for the removal of Harvard president Claudine Gay.

Gay has come under increasing pressure to step down following her appearance in Congress last week alongside Penn’s Elizabeth Magill and MIT’s Sally Kornbluth.

A question posed by New York Republican representative Elise Stefanik — “does calling for the genocide of Jews constitute bullying or harassment?” — marked a critical turning point for all three women.

“It is a context-dependent decision,” said Magill, who on Saturday evening resigned from her role at Penn. Scott Bok, chief executive of boutique investment bank Greenhill & Co, stepped down as chair of the university’s board moments later.

Gay, who answered the same question by saying it “depends on the context”, has since also found her own job in jeopardy.

Magill had previously lost the support of influential Penn donors, including Apollo Global Management’s Marc Rowan, who took issue with a Palestinian literary festival that occurred on school grounds in September. 

Bok’s day job at Greenhill would also become part of the controversy. The New York public relations firm Gladstone Place Partners circulated a document that broached the idea that Mizuho Financial Group could terminate its $550mn buyout of Greenhill due to the banker’s controversial tenure as Penn board chair.

The Mizuho/Greenhill deal closed this month nonetheless, and Bok is set to collect as much as $78mn in payouts from the transaction.

The fallout remains a cautionary tale for Ivy league universities that have for years courted powerful businesspeople and on whose funding they have come to depend.

“What you’re seeing now is a handful of super-ultra-wealthy individuals — plutocrats that, I guess, you would call philanthropists — who have incredible leverage over higher education,” says Isaac Kamola, a professor at Trinity College in Connecticut.

Nvidia bankrolls the age of AI

The most prolific investor on the artificial intelligence scene isn’t Andreessen Horowitz, Sequoia or any other venture capital stalwart that might spring to mind.

Nvidia, the world’s most valuable chipmaker, said on Monday it had invested in “more than two dozen” companies this year, making it the most active large-scale investor in the space.

“Broadly, for Nvidia, the number one criteria [for making start-up investments] is relevancy,” said Mohamed Siddeek, head of its dedicated venture arm NVentures.

Nvidia invests from its own balance sheet, wielding its hefty cash pile and influence over the industry — its H100 GPU processor has become one of the most sought-after products in Silicon Valley this year — to woo start-ups.

“They’re obviously a very strategic partner; you want to be a priority for them as they roll out new chips,” said one VC who shares investments with Nvidia.

The company recently invested in Mistral, the Paris-based AI start-up that was valued at €2bn this month, and has also backed Hugging Face, a provider of data and tools for AI developers that was valued at $4.5bn in August, and cloud infrastructure group CoreWeave. All three utilise some form of Nvidia technology.

Nvidia denied that it sought special terms with start-ups to ensure they used its chips, or that the group’s portfolio companies receive preferential access to its chips. “We don’t help anybody jump the queue,” Siddeek said.

The strategy sounds like a win-win to DD nonetheless.

An oil mega-deal down under 

Any fears that the sharp rise in interest rates could stem the flow of deals in Australia towards the end of the year have been put to bed. 

Hot on the heels of Brookfield’s failed $13bn tilt at energy provider Origin — a deal no one is willing to call time on just yet — two of the country’s largest oil and gas groups, Woodside and Santos, fired the starting gun on a potential $52bn combo on Thursday evening.

News of the talks, which would create a national champion rivalling BP in shipments, felt fairly predictable in Australia. 

Both companies have already been active in dealmaking. Woodside bought BHP’s lucrative former oil and gas assets last year while Santos solidified an A$21bn takeover of Sydney-based Oil Search in 2021. A Woodside-Santos deal would mean four players have been collapsed into one in a short space of time.

The bumper profits of 2022, as Russia’s full-scale invasion of Ukraine boosted LNG prices, eased this year and attention has focused on problems for the two companies. 

Woodside has been fighting a running battle with environmentalists, who targeted the home of chief executive Meg O’Neill for protests, while Santos has faced trials of its own.

Much has been made of the US takeovers leading up to this deal as the sector’s largest players line up smaller prospects to pad out their portfolios. That appears to have been a trigger for both Australian companies, with Santos under pressure to unlock value — through a break-up or sale — to boost its lagging valuation. 

Morgan Stanley is the lead banker for Woodside while Goldman Sachs is understood to be working for Santos. Talks are still in the early stages. But with regulatory issues, valuation issues and state pride all on the line, expect plenty of action ahead.

Job moves

• Goldman Sachs has named co-president of alternatives Greg Olafson as global head of private credit, according to an internal memo seen by DD. Private credit co-heads James Reynolds and Kevin Sterling have also been named global head of direct lending and global head of investment-grade private credit and asset finance, respectively.

• Former AC Milan player Zlatan Ibrahimović is returning to the Italian football club as an adviser to the team’s owners and an operating partner for RedBird, the US private equity firm that controls the Serie A team.

• Land Securities Group has named Olswang’s former banking head Moni Mannings as senior independent director designate. She joined the board on Monday and will succeed City veteran Edward Bonham Carter as senior independent director in April.

• National Grid has appointed Tesco chair Jacqui Ferguson to its board.

Smart reads

Blood in the water Thames Water’s convoluted financial plumbing is unlikely to do it any favours as the indebted utility prepares to explain itself to an angry parliamentary committee, the FT’s Helen Thomas writes.

Why did Mochida leave? Days before the surprise exit of Goldman Sachs’ Japan chief Masanori Mochida, he met with CEO David Solomon to discuss succession, among other things, Business Insider reports. The meeting has raised questions about his departure.

Some things never change The FT’s soon-to-retire head of Lex Jonathan Guthrie reflects on 37 years as a financial journalist, and the persistent patterns he has observed in financial markets along the way.

News round-up

General Atlantic takes first step towards potential US listing (FT)

Cigna pulls out of blockbuster deal to create insurance giant with Humana (FT)

Occidental Petroleum agrees $12bn deal to acquire CrownRock (FT)

Brookfield chides US bank regulator for ‘secret’ auction of housing loans (FT)

TikTok to take over Indonesia’s Tokopedia in bid to overcome ecommerce rules (FT)

Why Saudi Arabia and private equity have landed stakes in Heathrow (FT)

France’s Saint-Gobain hunts for fresh acquisitions as part of sustainability push (FT)

Gambling group Entain’s chief under pressure as activists circle (FT)