money behind prigozhin
Global markets are calm on Monday morning after a weekend of turmoil in Russia. And there has been no word from Russia’s President Vladimir Putin or his rebel military chief, Yevgeny Prigozhin, since Mr. Prigozhin’s aborted march on Moscow.
But experts expect the Kremlin to clamp down on the man who posed the biggest challenge to Mr Putin’s authority in his 23 years in power – and seek to limit the tools Prigozhin has used to finance his operations. in building a multinational, multimillion-dollar enterprise for ,
The incident exposed deep cracks in the Kremlin’s war machine, Volatility pushed the ruble down, and commodity markets are expected to move for months. European natural gas prices edged higher this morning, and Brent crude is climbing. (European shares and US futures traded mixed.)
“The risk of further civil unrest in Russia should now be factored into our oil analysis for the back half of the year,” Helima Croft, head of global commodity strategy at RBC Capital Markets, wrote in an investor note this morning. Rising commodity prices could put further pressure on central banks already struggling to contain inflation.
Who is Mr. Prigozhin? Europe and the United States have been trying for years to shut down Prigozhin’s vast business operations. On the FBI’s Most Wanted list, Mr Prigozhin rose quickly in Putin’s Russia – from being the president’s favorite caterer to winning key contracts that financed his private mercenary operation, the Wagner Group. Founded in 2014, Wagner fights wars and trains militias in politically turbulent countries, and it helps Mr. Putin when military operations in Syria and Ukraine fail. and Wagner’s Internet Troll Farm Target Western democracy and elections, including the 2016 US presidential campaign.
Wagner is a “brutal” international criminal organization, According to the Treasury Department. Avro Polis, a company linked to Prigozhin, which secured energy concessions in Syria in exchange for military aid. In Sudan and the Central African Republic, Wagner has focused on mining operations to help control its operations.
To avoid sanctions and conceal his finances, Wagner often demands payment in shipments of gold, diamonds and oil and gas. The Financial Times estimated Between 2018 and 2021, the revenue from Wagner’s stake in Natural Resources was approximately $250 million.
Mr. Prigozhin also relies on a global network of corporate lawyers To avoid Western authorities, according to a separate FT report, The Treasury has identified the business partners who are helping Wagner fight in Ukraine: two Russian companies – Terra Tech and AO BARL – and China’s Spacity, which provides satellite imagery to the group.
The rebellion has weakened Mr Putin, but what will he do next? Bill Browder, a former investor in Russia who has become one of Putin’s fiercest critics, told DealBook that the president will try to reassert his authority by any means necessary. “Unless he can show that he is so cruel that everyone has to deal with him, it is the beginning of the end. Recovery will require major action,” he said.
Alexander Gabuev, director of the Carnegie Russia Eurasia Center, told DealBook that Mr. Putin may still be far from finished. “This may be another display of passivity, but he is very good at adapting and finding a way to survive. His main talent is to stay in power.”
What’s going on over here
China’s currency has reached a seven-month low against the dollar. is renminbi facing constant pressure including China’s slowing economy decline in consumer spending, A cheaper renminbi would help Chinese exporters by making their goods less expensive overseas, but domestic businesses are likely to suffer.
Britain plans to tame “greed inflation”. The country’s finance minister, Jeremy Hunt, is due to meet with regulators this week to discuss ways to stop the companies raise prices too much, The move signals a turnaround by the government, which was previously more adamant about alleged profiteering, as Britain continues to suffer from high inflation.
Wall Street continues to get axed. Goldman Sachs At the same time, 125 managing directors are in the process of being retrenched worldwide. JPMorgan Chase As many as 40 investment-banking positions are being cut in North America, Bloomberg reports. The move comes at a time when banks are trying to save costs amid a prolonged slump in deals.
SpaceX is reportedly working on a valuation of $150 billion. Elon Musk’s rocket company is planning a fresh round of employee stock sales According to Bloomberg, this would increase its valuation from the $137 billion it achieved in January. This comes amid SpaceX’s continued success in launching rockets and expanding its Starlink satellite-based internet service.
Ryan Reynolds and Redbird bet on Formula 1
As investment in sports teams grows, a Hollywood-motorsports mash-up was announced on Monday: A group that includes actor Ryan Reynolds is taking a 24 percent stake in the Renault-owned Alpine Formula 1 team. It is the latest bet on sports team ownership and the lucrative sponsorship and media rights deals that can arise from it.
deal: Redbird Capital Partners (which has stakes in Fenway Sports Group and AC Milan), Otro Capital and Mr. Reynolds Maximum Effort Investments are leading an investment of 200 million euros ($218 million) in Alpine at a valuation of $900 million. Joining the investment is actor Michael B. Jordan and Rob McElhenney.
This is the first deal for Otro Capital, which was spun off from Redbird to invest in sports teams and is led by Alec Skinner, who previously worked for the NFL’s Dallas Cowboys and then in business for the Cleveland Browns. Operation was done. Mr. Shiner will join Alpine’s board.
It’s a bet on America’s continued interest in Formula 1. The contest has grown in popularity in the United States since its sale to Liberty Media in 2017. A big reason for this is the Netflix series “Drive to Survive,” which helped propel the sport’s attendance and overall fan following to new heights.
Renault is looking forward to continuing to build the Alpine brand. The team, which finished fourth in Formula 1 last year, is a key showcase for the French carmaker’s electric vehicle prowess as the company seeks to get more than half of its sales to EVs by 2030.
Buyers have found considerable success in profiting from sports teams:
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Redbird bought 15 percent stake Rajasthan RoyalsIndian Premier League cricket team, in 2021 – and the cricket league has seen the value of its investment increase after it sold its broadcast rights for a record price.
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And Mr Reynolds and Mr McElhenney bought low-ranked Welsh soccer club, Wrexham AFC, in 2020 and turned it into a media phenomenon, thanks to the successful reality TV series “Welcome to Wrexham”.
“They looked at us like, ‘Maybe you can help us with the areas where you’ve had success in America — ticketing, hospitality, sponsorship, licensing, merchandising, content,'” Mr. Sheiner told DealBook.
Legal giants reach out to Saudis
Amidst dealmaking turmoil globally, Big Law is increasingly seeking to take advantage of Saudi Arabia’s oil-powered investments to lift its fortunes. This now includes major companies such as Kirkland and Ellis, which are considering opening shop in the stateThe Financial Times reports that Latham & Watkins and Greenberg have joined Traurig.
But doing so can land some companies in an uncomfortable internal struggle:
The entry of large law firms into the kingdom has raised a potential clash between the liberal values espoused by senior employees in the US and elsewhere and the human rights record of Saudi Arabia, which continues to jail dissidents and where homosexuality is a big issue. The crime is made up. ,
US law firms are facing political pressure to drop some clients after widespread outrage over a school massacre in Texas, Kirkland & Ellis last year asked two star lawyers representing the gun lobby, the National Rifle Association Had broken ties. Other companies have refused to do work for anti-abortion groups or opioid manufacturers, while several specific organizations have refused to serve former US President Donald Trump and his allies.
Some top lawyers defend their companies’ deep ties to Saudi Arabia: “We do not independently judge the local customs, religious views and value systems of each jurisdiction and culture,” said Richard Greenberg, executive chairman of Traurig. Rosenbaum told FT. It is not our place to take decisions like this.”
“I’m not going to use the word ‘ESG’ because it has been misused by the far left and the far right.”
, Larry Fink, CEO of BlackRock. At the Aspen Ideas Festival, Fink — a longtime advocate for taking environmental and social concerns into account in investment decisions — said the generic term for that strategy has become too politicized. (He reiterated that he has not abandoned the principles of ESG investing.)
coming week
Inflation data, a big central banker gathering and earnings of big consumer-focused companies will be in the headlines. What to see here
Tuesday: The Conference Board is set to release its latest Consumer Confidence Report. Walgreen Boots reports fiscal third quarter earnings.
Wednesday: The European Central Bank concluded that annual forum in Sintra, Portugal. Central bank leaders including the Fed’s Jay Powell, the ECB’s Christine Lagarde and the Bank of Japan’s Kazuo Ueda will discuss monetary policy there. ready to fed release result In its annual bank stress tests, the first major report card on lenders since the collapse of Silicon Valley Bank.
Microsoft CEO Satya Nadella and his Activision Blizzard counterpart, Bobby Kotick, are expected to testify on the final day of hearings related to the FTC’s effort to block the $70 billion deal.
Thursday: Nike and H&M report quarterly results.
Friday: Japan and the Eurozone will publish their latest Consumer Price Index reports. The Commerce Department will also release its latest report on personal consumption expenditure.
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deal
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Western banks fear rising tensions between Washington and Beijing could prevent them from operating Syngenta’s Shanghai IPO, the agrochemical giant. (ft)
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IBM agreed buy apptio, which makes software for managing information technology, for $4.6 billion. (IBM)
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Junk-bond sales soar – Because issuers are offering more protection to potential buyers. (WSJ)
Policy
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Gerson Lehrman GroupReportedly, which connects clients to a network of industrial experts, is laying off staff in China as Beijing cracks down on Western consulting firms operating there. (ft)
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The centrist political group No Labels is pushing Senator Joe Manchin, a Democrat of West Virginia, to run for president on a third-party bid — but isn’t saying Who is funding this effort?, (Politico)
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