Liam Proud

Private-equity dealmakers like to boast about the ways they improve companies, like supercharging growth or trimming costs. The evidence, however, suggests that buyout barons owe a large chunk of their success to rising valuation multiples instead. Since that boost seems likely to fade away, industry titans like Stephen Schwarzman’s Blackstone and Henry Kravis’s KKR will have to work harder to kee

There’s always a case to be made for cost cuts at HSBC , . The $160 billion lender employed 214,000 people in June and arguably suffers from duplication across its different bits. Still, new CEO Georges Elhedery has a much bigger job than finding the modest savings that he is reported to be eyeing. Growth is the bank’s key challenge.

Brussels wants European companies to join together and compete with U.S. and Chinese rivals. In many cases, however, national politicians and investors may have different ideas. Unless European Commission President Ursula von der Leyen can resolve that tension, she won’t get the European corporate champions that she and her colleagues desire.

Was UBS’s Credit Suisse acquisition the “deal of the century”? That phrase, coined by a Swiss lawmaker last year, sums up the widely held view of the wealth giant’s state-arranged rescue of its arch-rival in March 2023. The benefits for the enlarged bank run by Sergio Ermotti are vast. Yet decisions by regulators could lower UBS’s return on the acquisition from interstellar to merely respectable.

HSBC , has changed a lot in its almost 160-year history. Yet many of its CEOs have grappled with a familiar question: how to manage a global bank with overlapping management teams for the different regions and business lines? New boss Georges Elhedery has landed on a logical fix. But if it works too well, there is a risk investors will wonder if HSBC really needs to be so sprawling.

Rachel Reeves’ speech on Thursday evening must have been music to the ears of the assembled financial grandees at London’s Mansion House dinner. The UK finance minister said that post-2008 reforms had created a regulatory system that “sought to eliminate risk taking”, and pledged to unshackle the sector to boost growth. Yet thus far her reforms look vague – and risk ending up as either marginal or reckless.

Everyone investing in private markets agrees: to go big, you have to go small. Alternative asset managers which dabble in private equity, real estate, and infrastructure grew large and rich by raising money from pension funds, endowments, and other big custodians of cash. Now they are increasingly turning to smaller individual investors. Their estimates of how much is up for grabs range from tens to hundreds of trillions of dollars. The discrepancies betray difficult trade-offs inherent in designing new products - and in squeezing into tight regulations. No wonder investors are taking a wait-and-see approach.

Andrea Orcel’s 10-billion-euro offer for Banco BPM on Monday could trigger a wave of possible countermoves from rivals within Italy and beyond. But as a group, the various players have lost market capitalisation since the day before the UniCredit CEO made his approach. It suggests shareholders fear a value-destructive cascade of possible deals, leaving financial considerations on the back burner.

The last time Donald Trump was in the White House, Mexico’s economy did surprisingly well. The Spanish-speaking country, and global CEOs who have rebuilt their supply chains around it, will be hoping that the U.S. president-elect’s initial hostility once again amounts to nothing. That looks too optimistic.

Europeans are accustomed to trailing the United States on just about every financial metric. Private equity returns may be an exception, at least according to figures from industry data provider Preqin. The hitch is that superior buyout profits aren’t necessarily something to crow about, especially if they’re just a reflection of bargain-basement valuations.