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Google co-founder Larry Page is building a new company called Dynatomics that’s focused on applying AI to product manufacturing, according to The Information.

Page is reportedly working with a small group of engineers on AI that can create “highly optimized” designs for objects and then have a factory build them, per The Information. Chris Anderson, previously the CTO of Page-backed electric airplane startup Kittyhawk, is running the stealth effort, The Information reports.

Page isn’t the only entrepreneur exploring ways AI could be used to improve manufacturing processes (although he might be one of the richest).

Orbital Materials is creating an AI platform that can be used to discover materials ranging from batteries to carbon dioxide-capturing cells. PhysicsX provides tools to run simulations for engineers working on project areas like automotive, aerospace, and materials science. Elsewhere, Instrumental is leveraging vision-powered AI to detect factory anomalies.

Sycamore’s deal to take Walgreens private follows chain’s decline amid e-commerce and health-industry changes

Not much has gone right for Walgreens Boots Alliance WBA -1.40%decrease; red down pointing triangle in the past decade.

Customers bought more and more household items online at sites such as Amazon.com, instead of Walgreens’s more than 8,000 stores across the U.S. The pharmacy chain inked deals with other drug suppliers and doctors offices, but stood pat while rivals, including CVS and Express Scripts, merged with big health insurers, gaining control of the medical-reimbursement purse strings that were squeezing pharmacies.

Walgreens cash flow sagged, its debt piled up and shares sank. And on Thursday, Walgreens was sold to private-equity firm Sycamore for $10 billion, down a staggering 91% from its $106 billion peak in 2015.

The storied pharmacy chain—which became a ubiquitous seller of everything from diabetes injections to nail files as retailers consolidated across the U.S.—fell after it neglected to keep up with customer preference to buy online and failed to navigate the fierce competition and intense cost pressures of healthcare.

It could shrink more after its sale. Sycamore, a New York-based firm that specializes in retail and consumer investments and, more recently, is better known for smaller deals, is expected to sell off pieces of the business or work with partners to turn it around, The Wall Street Journal reported.

Globally, the transaction ranks as one of the largest leveraged buyouts in the past decade.

Walgreens was founded in 1905, when Chicago druggist Charles R. Walgreen Sr. purchased the store where he worked. By 1929, the company was publicly traded and operated some 525 stores, including locations in New York City and Florida.

Even during the Great Depression, the chain grew thanks in part to innovations such as the malted milk shake, a sweeter version of the original.

Charles “Cork” R. Walgreen III, the founder’s grandson who took the helm in the 1970s, helped pioneer the drive-through pharmacy and made placing stores conveniently a corporate priority, clustering retail outlets closely together in dense urban areas to make it as easy as possible to shop at Walgreens.

By last year, 78% of the U.S. population lived within 5 miles of a Walgreens-owned pharmacy.

The chain was a retail juggernaut, its red cursive logo a common sight on city street corners and in suburban shopping centers. Walgreens’s power started to diminish in the 21st century.

Walgreens didn’t recognize it at first. For years, the company had dangled its thousands of retail locations and loyal customer base to win favorable terms from the powerful firms that pay for patients’ prescriptions—called pharmacy-benefit managers.

In 2011, Express Scripts, one of the biggest PBMs, called its bluff, leading to a nasty public dispute and Walgreens’s losing access to millions of customers.

It was a misstep that made investors antsy about Walgreens executive leadership, and created an opening for an Italian billionaire named Stefano Pessina to step into the picture.

Via dealmaking, Pessina, a trained nuclear engineer, had transformed his family’s wholesaling business into global healthcare giant Alliance Boots. It operated nearly 2,000 pharmacy stores across the U.K., with an emphasis on personal beauty products.

In 2012, he orchestrated a two-step, multiyear deal to have Walgreens acquire Alliance Boots for more than $10 billion in cash and stock. The combination formed one of the world’s largest pharmacy chains. When the merger was completed in late 2014, he became CEO.

“It’s an American dream come true,” Pessina told The Wall Street Journal in 2013. He installed his partner—now spouse—Ornella Barra, as Walgreens chief executive of global wholesaling and international retail operations. And he forecast a long, bright future for the historic retailer.

Behind Pessina’s confidence was his diagnosis of a bloated and inefficient U.S. health system compared with the government-run systems in Europe. He prescribed combining American and European companies as the antidote, betting he could wring out savings from the consolidation that would drive years of growth.

Even after uniting Walgreens and Boots, the company sought to further expand its pharmacy footprint.

In addition, Walgreens Boots sought to leverage its heft at filling prescriptions through partnerships with the firms that distributed medicines to pharmacies. Under Pessina, Walgreens joined with one of the largest U.S. drug wholesalers, AmerisourceBergen, now known as Cencora. The deal connected the drug supply chains of Europe and the U.S. for the first time.

“So how do [I] see the future of this company?” Pessina told the Journal in a 2019 interview. “I see a future that will extend into the next couple of centuries.”

But health insurers and pharmacy-benefit managers, who were responsible for paying for much of Americans’ healthcare, were facing pressure to keep a lid on soaring costs. Companies began linking up vertically to make sure they weren’t squeezed by the cost-control push.

In the winter of 2018, insurer Cigna bought Express Scripts for $67 billion, and CVS acquired insurer Aetna for $70 billion.

The deals helped protect pharmacies from lower reimbursement rates that health insurers and pharmacy-benefit managers were seeking during contract negotiations.

Walgreens Boots missed out. Pessina pulled off the acquisition of thousands of additional Rite Aid stores, but didn’t achieve a purchase of AmerisourceBergen or a tie-up with insurer Humana. The failure to find an insurer parent was, analysts said, a mistake.

“The single biggest issue for Walgreens is pharmacy reimbursement, which in simple terms is they’re getting paid less by PBMs and payers every year to dispense the same prescription,” said Michael Cherny, a Leerink Partners analyst.

Pessina sought to compensate for Walgreens stores’ declining prescription margins by beefing up the “front of the store,” where consumers could buy cosmetics and other home goods. More and more customers, however, were buying goods online.

At the back of the stores, meanwhile, Walgreens sought to create the pharmacy of the future, joining with various healthcare providers to offer services that could attract new customers.

There was an ill-fated deal in 2013 to create dozens of Theranos blood-testing clinics in its pharmacies. In 2020, Walgreens made a $1 billion investment in VillageMD, a network of clinics offering primary medical care.

The moves didn’t pay off, at least not enough to offset the struggles in its core pharmacy business. In 2021, Pessina stepped down as CEO and was succeeded by Rosalind Brewer, the chief operating officer at Starbucks and a healthcare outsider.

Brewer saw a U.S. pharmacy industry stuck in perpetual low-growth mode, and rivals such as CVS betting big on providing healthcare directly to patients. Walgreens should chase a similar formula, she said, capitalizing on the government’s push to pay for how well doctors improve patients’ health, not just each X-ray and procedure they perform.

The company would attach more Walgreens stores to its doctors offices, in hopes that patients would fill their prescriptions at the pharmacy after their doctor visits.

Under Brewer, Walgreens paid $5.2 billion to buy a controlling stake in VillageMD. In 2022, she struck a deal to buy a group of urgent-care centers, including CityMD, for $9 billion.

But the deals added more debt, while failing to stop the damage to Walgreens’s pharmacy margins and stock price. She also clashed with Pessina. Making matters worse, the pandemic hit, accelerating patients’ shift from bricks-and-mortar retailers to e-commerce websites.

By 2023, Brewer was out, abruptly succeeded by healthcare veteran Tim Wentworth. An enthusiastic leader proud of community-college roots in Rochester, N.Y., Wentworth had worked at the highest levels of the PBM industry for decades, most recently as chief executive of Express Scripts, where he oversaw the company’s sale to Cigna.

Wentworth set out to cut costs and return Walgreens back to its roots with a focus on its pharmacy customer experience. He announced plans to close 1,200 stores over three years and to roll back the company’s expansion into medical care, by looking to sell its share in VillageMD and explore its options for the rest.

He also sought to renegotiate better contracts with his old insurer colleagues.

A year into Wentworth’s stewardship of Walgreens, however, investors didn’t give the company credit for its turnaround efforts.

In January, the company said it would suspend its quarterly dividend—paid for 91 straight years—because it needs the cash to refinance debt and deal with litigation, including a recent Justice Department lawsuit over the pharmacy’s distribution of opioids.

A private-equity deal, in which parts of the company—including its Boots pharmacies in the U.K.—would likely be sold off might make it easier to revive the core U.S. retail pharmacy business outside the spotlight.

Pessina’s vision for a cross-continental pharmacy colossus had collapsed. His stake in the company lost $10 billion in value. Now 83 years old, he resides in the tax haven of Monaco.

CMA CGM’s chief says the world’s No. 3 container line will invest $20 billion in the U.S. over the next four years

French shipping magnate Rodolphe Saadé met President Trump at the White House on Thursday and pledged to invest $20 billion in the U.S. over the next four years as the administration pushes to revive the American maritime sector.

Saadé, the billionaire chairman and chief executive of Marseille’s CMA CGM, intends to triple the size of the container line’s U.S.-flagged fleet, upgrade its U.S. port facilities and create a Chicago airfreight hub, among other moves.

The investments will create 10,000 direct new jobs, Saadé said in an interview, adding most of the announced investment is new money that is being found or reallocated from other areas. It includes $8 billion for containerships, $7 billion for logistics, $4 billion for ports and $1 billion for air cargo, he said.

“We’re talking about a massive investment of a shipping company and a logistics provider in a given country,” Saadé said. “$20 billion over four years is very strong as a commitment to the U.S.”

The commitment comes as Trump presses to resurrect commercial and military shipbuilding in America and to challenge China’s dominance of the global maritime industry in ways that threaten profits at the world’s largest ocean carriers.

Trump, in a video from the White House posted on X, told Saadé that America’s maritime industry had lost its way and that in the coming weeks he will announce “a massive new program for building the largest ships in the world.”

Saadé told Trump: “You will have more ships with the U.S. flag as we move forward, and you can count on us to do as much as we can.”

Trump told Congress this week he would create a new Office of Shipbuilding in the White House. Administration officials are also considering an executive order to boost the domestic shipbuilding industry. Measures include charging fees on Chinese-built ships calling at U.S. ports to raise revenue for the maritime sector, according to a draft summary of the order reviewed by The Wall Street Journal.

That idea, which is subject to change, draws on recent proposals under consideration by the U.S. Trade Representative’s office. The fees of up to $1.5 million per port call are opposed by U.S. trade and agriculture groups as well as by the container line industry.

Saadé said the fees would “harm business and global trade.”

China dominates global shipbuilding. Almost 36% of CMA CGM’s container fleet, measured by capacity, is made in China, according to data firm Linerlytica. More than 64% of the company’s new order capacity is being built at Chinese shipyards.

The company operates a U.S.-flagged fleet of 10 containerships under its APL subsidiary. Because the ships are U.S.-flagged, they are crewed by U.S. sailors and are a preferred carrier for U.S. government and military cargo.

Saadé said CMA CGM will add 20 new ships to its U.S.-flagged fleet, most likely from South Korean shipyards. He said the company is talking to U.S. shipyards about whether and when they can make ships for the fleet and what size those ships might be.

CMA CGM routinely orders vessels from South Korea and China capable of carrying the equivalent of about 18,000 containers.

U.S. shipyards build smaller containerships. APL’s U.S.-flagged fleet ranges in size from ships capable of carrying the equivalent of between 1,600 and 6,000 containers.

Saadé said the U.S. accounts for a quarter of CMA CGM’s total revenue. The world’s third-largest carrier by capacity, earned $5.71 billion in net profit in 2024 on revenue of $55.5 billion.

It has spent billions of dollars in recent years building out its global logistics offerings. It purchased logistics specialist CEVA Logistics for $1.67 billion in 2019 and two years later launched its own airfreight service. It has also spent billions of dollars in the U.S. purchasing cargo-handling terminals at the two busiest West Coast and East Coast ports, at Los Angeles and at New York-New Jersey.

CMA CGM was already planning to spend hundreds of millions of dollars upgrading those and other port facilities to move more containers more quickly through congested gateways.

The company and its logistics subsidiaries employ about 15,000 U.S. workers.

Saadé said the company plans to double and modernize its network of about 200 U.S. warehouses and to open a research-and-development hub in the Boston area. He said the new Chicago air hub would be served by five Boeing 777 freighters carrying cargo between the U.S. and Asia.

Trump’s Embrace of Putin Has Germany Thinking of Nuclear Weapons

The travails of the Western alliance have injected urgency into a debate about homegrown alternatives to the U.S. nuclear umbrella

BERLIN—President Trump’s embrace of Russia is causing Europeans to rethink their security and giving currency to an idea the U.S. has long sought to avoid: a nuclear-armed Germany.

Friedrich Merz, who is poised to become Germany’s next chancellor, said Berlin should start talks about expanding the French and British nuclear deterrents to cover Europe, according to an interview the conservative politician did with the Frankfurter Allgemeine Sonntagszeitung weekly.

Asked if Germany should pursue its own arsenal, Merz didn’t rule it out, saying there “there is no need for this today.”

The remarks broke with a longstanding taboo, showing how violently the foundations of Germany’s and Europe’s security are being shaken. Merz is still negotiating to form a government and has yet to be elected chancellor, but a German leader had not called for an alternative to the U.S. nuclear deterrent in Europe since the end of the Cold War.

After World War II, the Federal Republic of Germany was welcomed into the Western alliance as a bulwark against the Soviet bloc. Yet unlike France and the U.K., it renounced pursuing its own nuclear weapons and was welcomed instead under the American nuclear umbrella.

U.S. tactical nuclear weapons are now stored at the Büchel Air Base in western Germany, ready to be deployed by the German Air Force should the U.S. president give the order.

The U.S. hasn’t said that it wants to pull troops out of Europe. Yet Trump tried to do so in his first term. He is now seeking a detente with Russia’s autocratic leader, Vladimir Putin, which some analysts say might have irreparably damaged the credibility of the U.S. deterrent in Europe.

“Why should Putin think in case of an escalation in Europe that Trump would use a nuclear response? Every step Trump has taken suggests otherwise,” said Maximilian Terhalle, a political scientist and visiting scholar at the Hoover Institution at Stanford University.

Nowhere in Europe is the sense of abandonment more palpable than in Germany, where the U.S. maintains its second largest overseas military presence.

To fill the security gap, Germany would have four options, said Christian Mölling, director of the Europe’s Future program at the Bertelsmann Foundation, a think tank: “The Americans maintain their nuclear deterrent; the Europeans take it on; a mix of the two; or you try to compensate conventionally…All of these are risky,” he said, referring to nonnuclear, military forces.

On the conventional side, Merz and his future coalition partners said this week they would exempt military spending from the country’s tough fiscal rules, de facto removing any limit on spending and allowing Germany to rapidly accelerate its rearmament.

On the nuclear side, researchers and some politicians say Berlin’s fastest route to rebuilding a deterrent could be to replicate its arrangement with the U.S. This could see French nuclear bombers stationed in Germany with the mandate to protect the country or German pilots flying German planes armed with French nuclear weapons, with Paris holding the key to their use.

“Russia has threatened us with nuclear strikes,” said Thomas Silberhorn, a German conservative lawmaker and foreign policy expert. “We Europeans have to take this nuclear threat seriously and face it with a nuclear deterrent. So far, that’s been provided by the U.S., and we are now discussing whether we could organize it at a European level, with France and Great Britain.”

Reacting to “the historical appeal of the future German chancellor,” French President Emmanuel Macron said in a televised address this week that he would start a “strategic debate” about extending Paris’s nuclear deterrent to European allies. Macron had offered such talks in the past, only to be ignored by Berlin.

The French arsenal was developed under President Charles de Gaulle to reduce reliance on the U.S. Unlike Britain’s, it is independent from NATO. Still, with warheads in the low hundreds, neither the British nor the French arsenals are a match for Russia’s nearly 6,000 warheads.

“France and the U.K. already have a minimal credible nuclear deterrent but they’ve always worked with a U.S. backstop,” said Alexander Bollfrass, head of strategy, technology and arms control at the International Institute for Strategic Studies, or IISS.

For Germany, subcontracting its security to France and the U.K. could make it hostage to political shifts in Paris and London, much as it is now subject to Trump’s whims.

Macron stressed that the decision to strike “had always been and would always be in the hands of the [French] president.” Marine Le Pen, the nationalist politician polls suggest could succeed Macron, said this week of the French deterrent that “we shouldn’t share it, let alone delegate it.”

Terhalle has been urging German leaders for months to pursue a national arsenal, suggesting last year that Berlin should offer to purchase some 1,000 currently nonactive strategic nuclear warheads from the U.S.

Germany is a signatory to the Treaty on the Non-Proliferation of Nuclear Weapons, which bans it from developing nuclear weapons and prevents other signatories from helping it do so. It also renounced the weapons in the treaty that paved the way for German reunification.

If Berlin chose to develop an arsenal, it would have to do so clandestinely, not just because it would violate its obligations, but also because the effort would make it a target for enemies.

“A mature industrialized country like Germany should be able to develop a warhead more rapidly than other potential proliferators,” said Fabian Hinz at IISS. But it would face legal and technical obstacles and it would struggle to conceal its program.

Germany has a small stockpile of weapons-grade uranium for use in a civilian research nuclear reactor operated by the Technical University of Munich. It is generally thought to have the scientific and industrial base required for weapons development. Yet it would probably still need outside help to procure enough nuclear material and weapon designs.

“No one has ever managed to produce enough material for a bomb without being detected. And now it’s much more difficult to do so because intelligence and surveillance technologies are much more sophisticated,” said Bollfrass.

Even if it developed a warhead, Berlin might not be able to test it, which is hard to do safely in a densely populated region such as Europe and almost impossible to conceal given seismic, satellite and radiation monitoring by nations and international organizations.

Some experts say this might not be a problem. One avenue, they say, would be for Germany to develop a small batch of untested weapons, trusting they would suffice to deter aggressors. South Africa pursued such an option and built a small number of untested warheads before renouncing its nuclear weapons program.

Another route would be what experts call nuclear edging, a form of brinkmanship whereby a country comes close to developing its own weapons and advertises its readiness to cross the threshold if threatened.

“Still, for Germany to have such self-confidence, to so radically pursue its self-interest and break so many norms,” said Bollfrass. “That’s pretty hard to imagine.”

Britain is throwing too much green energy to the wind

Ministers have wasted time dealing with costly and inefficient electricity system

Waste is bad in any industry. Even more so if dealing with it costs billions of pounds a year. No surprises then that UK ministers are exploring whether changes to electricity pricing could reduce costly payments to switch off wind farms. The bigger question is why they wasted so much time.

In just the first two months of 2025, the cost to consumers of dealing with Britain’s inefficient electricity system topped £250mn, estimates the website Wasted Wind, up 60 per cent year-over-year.

One part of this takes the form of “constraint payments”. Wind farms are largely located in Scotland, or remote areas of England, where local electricity demand is limited. On especially blustery days, there is insufficient grid capacity to transmit their output to areas of high demand — largely in the south of England. The wind farm owners are thus paid to shut down temporarily. The other part is gas-fired power stations are often simultaneously paid to switch on to meet that demand in the south.

No system would ever be deliberately designed in this nonsensical way. These kinks exist because wind and solar farms have been added to the electricity system faster than new transmission lines. The latter cost multiple billions to build and are often hampered by planning disputes.

The problem of green electricity wastage is not uniquely British. But the UK’s Labour government has promised a clean electricity system by 2030. At worst that could mean more wind-generated power, with nowhere to go.

One possible solution is “zonal pricing”, where different regions set prices based on local supply and demand. In theory, energy-intensive businesses would move to where the cheap power is. That should lessen the need for so many costly new transmission lines — and reduce unpopular payments to wind farm owners. Low electricity bills might even reduce opposition from communities to new energy infrastructure.

This all assumes that businesses would actually relocate. Variations on a zonal system already exist elsewhere in the world, though — in certain US states, such as Texas, for instance. A bigger issue is probably timing. Britain is embarking on a major upgrade of the electricity grid. Companies including National Grid, SSE and ScottishPower are working on new north-south transmission lines. It will be difficult to predict now where the grid bottlenecks will be in a few years’ time.

Even if companies do move, what about people? Cheaper power prices for Scottish households would not be popular in southern English constituencies. One way around that would be to have a blended national price for households. But such political questions are the real danger: ministers have dithered for years on electricity reform. Trying to please everyone will only fritter away even more precious time.

The hidden dangers of family offices

Private wealth management companies for the super-rich now manage trillions of dollars globally. Critics say they are open to abuse

Early on the morning of August 15 2023, more than 400 Singaporean police officers raided scores of luxury properties in the city-state’s most exclusive neighbourhoods.

The operation followed a tip-off that several foreign nationals had been laundering huge amounts of money. Police seized 94 properties and 50 vehicles, along with cash, luxury handbags, jewellery, two gold bars and cryptocurrencies with a total value of S$3bn ($2.2bn).

The scandal shocked Singapore. But what embarrassed the country’s authorities most was that six family offices — lightly regulated, private wealth-management companies for rich individuals — linked to the money-launderers had not just been used to manage illicit funds, but also received tax benefits from the state.

“It was a huge wake-up call,” says Yishan Lee, head of regulatory compliance for Asia at investment services company IQ-EQ and a former manager at the Monetary Authority of Singapore (MAS), the country’s financial regulator and de facto central bank.

“The criminals found weak points in the banks and family offices,” says an industry figure in Singapore who declined to be named. “Once it gets in, it starts to flow and it contaminates the entire system.”

The scandal is one of a series of recent controversies that have focused attention on the uses — and potential abuses — of family offices. 

The term “family office” is generally understood to mean a private company that provides investment and other services to a wealthy individual or family. But in most countries its remit and legal structure are largely undefined.

Traditionally a means for rich families to bring their wealth management and legal and business affairs in-house, the sector now encompasses companies performing an array of functions, from asset allocation to philanthropy to lifestyle services such as dog-walking. (Single family offices are distinct from multi-family offices, which run the investments and other affairs of several principals or families.)

Together, the amount of money they manage is colossal — and growing. According to estimates by Deloitte, in 2024 there were more than 8,000 single family offices globally, managing $3.1tn of assets. By 2030, the number is expected to increase to nearly 11,000, managing $5.4tn. The 320 family offices surveyed in a 2024 report by UBS had an average net worth of $2.6bn.

By comparison, according to figures from the research company HFR, in 2024 the global hedge fund industry managed $4.5tn in total.

In Singapore alone, according to the government, the number of single family offices rose to 2,000 by the end of 2024, with a 43 per cent jump last year alone. In North America, Deloitte estimates that the number will jump to 4,200 by 2030 — almost double the figure in 2019.

One of the fastest growing areas of finance, family offices are also one of the least understood — or regulated. Their continued expansion around the world is prompting growing questions about what they are really for, and about what sort of rules should be applied to them.

As Hong Kong’s economy struggles, the government has set a target for attracting new family offices in an attempt to attract wealthy clients to the territory. A recent alleged fraud case in Europe has brought new attention to the potential for misuse of the term “family office”, while in the US they have been a controversial subject since the implosion in 2021 of Archegos Capital Management, which was classified as a family office but operated as a high-risk hedge fund. There have been moves in the US Congress to place tighter regulations on family offices, although they have not been passed.

For some critics, family offices can act as a latent source of risk in the financial system outside of the view of regulators. And at a time when the Trump administration is downgrading the importance of combating white-collar crime, those concerns about potential misuse are likely to grow.

According to Chuck Collins, director of the Program on Inequality and the Common Good at the Institute for Policy Studies in Washington, the potential for abuse of the structure has not gone away since the collapse of Archegos.

Family offices are “an unregulated haven for capital in the US,” he says. Some are “high-risk investment firms . . . assembling huge pools of capital to invest in different things with no reporting and no oversight.”

Though the term itself did not yet exist, JD Rockefeller is credited as having set up the first full-service family office in 1882 to run both his business and manage his family’s complex investments in one place. Other Gilded Age clans, including the Carnegies and Vanderbilts, adopted similar arrangements.

But they have since become far more common, partly as a result of wealth-generating events such as IPOs and sales to private equity from the 1990s onwards, including the first tech boom.

According to a 2024 survey of Swiss family offices by the University of St Gallen, core functions of these companies include asset allocation, investing, accounting/reporting and risk management. Half offered lifestyle/concierge and security services, too.

When it comes to staff, “family offices tend to be very lean,” the former head of one Swiss family office told UBS’s researchers. A fifth of those surveyed only employed up to three people, while two-thirds had up to 10. But some extremely rich families have offices that employ hundreds.

The level of professionalism can vary dramatically. A 2024 English legal case highlighted an Australian man living in Monaco who had asked his yoga instructor to set up his family office in London. Nick Warr, head of the international private wealth group at law firm Taylor Wessing, says: “On the one hand we have — in the context of lots of Middle Eastern families — maybe the former family lawyer who has three mobile phones and he’s now the family office, and the other end of the spectrum is a fully functioning family office with management capacity, lifestyle capacity, in-house legal, in-house accounting.”

Whereas 20 years ago an individual would need something like $200mn of wealth to set up a family office that is “properly functioning, if you want to have everything in-house”, that figure is now closer to $3bn-$4bn, Warr adds.

The difference between using a private bank and having a family office is like “ready-to-wear vs haute couture,” says Jean-Baptiste Wautier, a former private equity executive who has his own London-based family office, which he describes as “a combination of a mini-fund and wealth management unit”. “If you can afford your own family office, it will always be by definition better-suited to your needs.”

Michael Viana, head of strategic client coverage for global wealth management at UBS, says: “Every family office is a mirror of the family or the family business that they cater to and the needs they have.”

As global financial centres compete to attract the super-rich, family offices are being used as a lure. In Singapore, as long as they have an account with a regulated bank and meet various ownership, structural and beneficiary criteria, single family offices can manage money without needing to be regulated as a fund manager, which is significantly more onerous. And if they meet further requirements, such as being over a certain size and having staff with relevant qualifications, they can receive tax benefits.

Hong Kong also offers significant tax concessions. Single family offices managing more than HK$240mn ($31mn) and which fulfil other criteria are not required to pay tax on their profits. Professor Winnie Peng, director of the Roger King Center for Asian Family Business and Family Office at HKUST, says that in Hong Kong, home to an estimated 2,700 family offices in 2023, the government’s target is to attract 200 new ones by the end of this year — if anything, she says, “a conservative number. I think they can easily achieve this goal.”

In the US, family offices are in principle regulated under the Investment Advisers Act, which requires registration with the Securities and Exchange Commission. But under the so-called “family office rule”, offices that only serve “family clients” and are owned by the family in question are exempted because the family is deemed “financially sophisticated and less in need of the protections that the Advisers Act was intended to provide,” according to guidance published by law firm Squire Patton Boggs.

There are tax advantages here too: in certain circumstances, US family offices can deduct investment management fees, rent and salaries. “Once family office expenses reach $1mn, the potential tax savings . . . start to approach several hundred thousand dollars,” said a 2024 report from UBS. The situation with deductions is similar in the UK, which according to a 2016 estimate is home to about 1,000 family offices, though reliable figures are hard to come by owing to the nature of these businesses.

Beyond the tax breaks, there are other reasons it might be appealing to set up an office. Families want “autonomy” to pursue their own strategy, says Lauren Cohen, a professor of finance and entrepreneurialism at Harvard Business School, whether that involves investing in “frontier assets” such as private equity, private credit and cryptocurrencies or directing money to philanthropy and impact investing. Those alternative assets made up 42 per cent of portfolios, much higher than in mainstream investing, according to UBS’s Global Family Office Report 2024.

Less material considerations sometimes apply, he adds: “There’s more social pressure because more of your friends are doing this. And so that puts a little more pressure on you if you don’t have one.”

The lightly regulated nature of family offices means there are no restrictions on who can use the label or what they choose to do with it.

Rutger Janse, a Dutch national awaiting trial for an alleged €4mn fraud after raising money from investors without then investing it, had enrolled in at least three family-office conferences as the president and chief executive of Janse Capital Family Office, a company which did not apparently exist. (Janse told the FT he could not comment because the case was ongoing.)

In the 2023 Singapore case, family offices provided a veneer of respectability for the laundered money, which had been generated through illegal online gambling operations. The criminals used forged documents to convince banks that the money had come from clean sources, allowing it to flow into Singapore and be managed by the family offices.

The vagueness of the term “family office” can cause confusion, says Sara Hamilton, who founded the Family Office Exchange, a membership organisation in the US. People will be “masquerading as family offices who are really selling some kind of [investment] product”, she says.

Harvard Business School’s Cohen says that this lack of a formal definition has been a problem in Singapore and Hong Kong: “Anyone can come over and be like, ‘I’m the Professor Cohen Family Office and we manage this.’ And what I would do is pretend to be that, but I’m really a service provider, and then I try to get these benefits [of access] and . . . get introduced into the community.” This creates a “devolution” of standards, he says.

“If you don’t care about the tax incentive, you just operate as normal, provided you can convince the banks to offer an account for you,” says IQ-EQ’s Lee about Singapore. HKUST’s Peng says the situation is the same in Hong Kong: only those who want tax advantages have to fit a certain definition of “family office”, otherwise anyone can use the term.

While some argue that the term is sometimes misapplied, Wautier is more trenchant: “I don’t think it’s being misused — I don’t think it has been properly defined in the first place.”

But not everyone is concerned that the term is vaguely defined. A lawyer who runs a family office forum in London says: “We just need to recognise that it isn’t a single thing, but it’s lots and lots of different things.”

Alarmed at the lack of transparency surrounding family offices and the vast sums they manage, some critics argue that their growth is becoming a problem for regulators, governments and citizens.

In the US, this discussion was turbocharged by the implosion of Archegos. Set up by former Wall Street trader Bill Hwang to manage his personal assets, Archegos ended up operating like a high-risk hedge fund, at one point managing more than $36bn.

When the company defaulted on its debts in 2021, it owed more than $10bn to creditors and caused Credit Suisse $5.5bn in losses — a significant factor in the bank’s collapse two years later. Hwang was found guilty of fraud and market manipulation in the US and sentenced to 18 years in jail. Because Archegos was classified as a family office, it escaped strict disclosure requirements and the fraud went unnoticed until it was too late.

“Family offices have now grown to the point that they are deeply interconnected with the rest of the financial system,” US congresswoman Alexandria Ocasio-Cortez said following the debacle. “Their activities could affect the stability of our financial markets.”

In an attempt to confront the problem, she introduced a House bill that would require family offices with more than $750mn under management to register as investment advisers with the SEC and report their holdings. But it did not make it into law.

The Americans for Financial Reform Education Fund, a non-profit coalition, has criticised the regulatory exemptions that family offices are given in the US. Last year, it wrote to the director of the Financial Crimes Enforcement Network (FinCEN), part of the US Treasury, saying FinCEN’s definition of “financial institution” should include family offices because “the sources of capital” for a number of them had been “problematic”.

It cited the example of Russian oligarch Viktor Vekselberg, whose family office was the majority owner of a US private equity firm and who was later placed under sanctions for his alleged connections to the Kremlin. (Vekselberg has repeatedly insisted that he has had no involvement in the Kremlin’s political activities.)

Others are alarmed by the sheer amount of money involved — a danger illustrated by the spectacular collapse of Archegos. “The reason [family offices] pose a higher risk is because the amounts are huge,” says Yishan Lee. “They have more resources to launder money and therefore make it harder to detect. So when things explode, the consequences can be very detrimental.”

Following the Singapore scandal, the regulator MAS has tightened up its definition of “family office”, including bringing in the requirement that they must have an account with a regulated bank. It is also enforcing stricter definitions of who counts as a family member, making clear that they must have a common ancestor within five generations of the youngest member. Last year, Indian authorities announced that they would crack down on them too, in an effort to prevent tax evasion and capital flight.

Some argue that the US and other jurisdictions should do likewise. Although Ocasio-Cortez’s 2021 bill did not make it into law, Collins of the Program on Inequality and the Common Good argues that family offices “should be subject to the same disclosure requirements that hedge funds must make” and that above a certain size they should give the SEC “information about leverage, investments, risk exposure positions”.

“How large are these pools and are they acquiring critical sectors of the economy?” he asks. “How do they interact with both public corporations and private companies?”

Yet there seems to be little appetite for change, either within the sector or from outside — and even less now that the Trump administration is in charge, critics fear. The dangers remain significant, argues Collins: “Three years from now we might be going, ‘Who are family offices and how did they come to control such a huge share of the economy? How come no one was watching?’”

Dubai property rally closes in on pre-2008 record

Growing population and buoyant economy have fuelled four-year bull run, but some warn rising prices are unsustainable

Dubai’s property market is racing towards a record bull run, with the Middle Eastern commercial hub’s buoyant economy and swelling population fuelling the longest price rally since the eve of the 2008 financial crash.

Properties in Dubai sold for an average of Dh1,750 ($476.50) per square foot last month, according to data provider Reidin, a surge of 75 per cent from February 2021.

Some question how long the meteoric price rises can continue in a city that has experienced two boom-bust cycles since its property market opened up in 2003.

The 50-month rally is hurtling towards the 57-month record that ended with the global financial crisis, according to Reidin. Dubai at the time suffered a real estate crash that exposed unsustainable debts at some state-owned companies and required a bailout from Dubai’s oil-rich neighbour Abu Dhabi.

he soaring property values are underpinned by Dubai’s robust economy, with the city capitalising on its decision to open up to visitors during the pandemic while other hubs still restricted travel. The UAE also liberalised its visa system in 2022, encouraging more expats to see the city as home for a longer period.

Newcomers have included everyone from millionaires trying to avoid tax rises to white-collar workers hoping to cash in on the oil-rich Gulf’s growing markets, and Ukrainians and Russians fleeing the impact of Moscow’s invasion of Ukraine.

That influx has caused Dubai’s population to swell nearly half a million since the beginning of 2020, according to Dubai Statistics Centre estimates, hitting 3.8mn this year.

That means Dubai’s villas and flats — popular with speculators in the past — are now in demand from people wanting to settle. “They’re building a lot of apartments and not building enough houses,” said Barnaby Compton, a Dubai real estate agent. “We have an ageing population and we have more families moving in with kids”.

Malek, a Dubai-based banker who asked for his real name not to be used, bought and renovated a spacious villa in the Arabian Ranches suburb last year.

He had intended to move in, but demand was so high that selling became irresistible. Realising he could make between a “60 [and] 80 per cent annual return” by selling the property, Malek said he would put his house on the market this week.

“There is a strong appetite,” he said, adding that he expected the house to go for between Dh1.5 and 1.9mn and had already bought another property. “The upside is too attractive not to sell.”

Property values at the top end of the market have climbed fastest. Prices in gated communities, made of villas and often set around golf clubs, “increased over 100 per cent in the last four years”, said Alec Smith, head of sales and leasing at Savills in Dubai.

Smith and others argue that price rises will be sustained by Dubai’s growing population, with Dubai’s Urban Master Plan assuming there will be 4.6mn people living in the emirate by 2030. 

The boom has given a new lease of life to Dubai’s property developers, who had been struggling with years of falling or stagnant prices before the rally.

Dubai government-backed Emaar, the emirate’s biggest developer, posted property sales of Dh65.4bn ($17.8bn) for 2024 — its highest ever — with profit before tax of Dh10bn, up from Dh8.4bn the previous year. Smaller property players have also reported strong results.

Developers are raising money to fuel land purchases and massive construction. This includes tapping Islamic bonds or sukuk, with the volume of issuance in 2024 by real estate or property companies in the UAE jumping 25 per cent year on year to $2.17bn, according to Dealogic.

According to Knight Frank, 300,000 homes are slated to be built in Dubai between late 2024 and 2029, with about 50,000 units being ready to move into annually — higher than previous average deliveries of 36,000 homes per year.

The city’s skyline is now lined with cranes, while construction sites throw up dust everywhere from the luxury downtown Business Bay district to the more affordable suburb of Jumeirah Village Circle.

Worsening traffic, a product of the swelling population, has become a source of pain for longtime residents, with Dubai’s transport authority and the ruler’s investment group Dubai Holding last week signing an Dh6bn deal to improve the city’s road networks.

Tamara, also not her real name, lived in Dubai for three years with her partner before spotting a roomy villa with a garden last year for a “decent” price in a leafy lakeside community.

Although they were wary about the market’s volatility, they decided to buy the house, expecting they could “rent it out for a lot more than what we’re paying right now”.

“Within the next five years I think that the market is probably going to still be OK,” she said. However, “I don’t think the market for too long will carry on rising”. The house has been on the market for 10 weeks and has yet to secure a tenant.

Katralnada BinGhatti, chief executive of the eponymous developer, argued that climbing supply did not preclude further price increases.

Will Dubai continue to “see the double-digit growth? Obviously not, because that’s how any market behaves,” she said, but added she was “fairly confident” the market would stay in “a healthy place for the short to medium term”.

Analysts also say reforms after Dubai’s real estate crash of 2008 and 2009, including requirements for larger down payments on mortgages, have made the market more resilient to a downturn.

But others are unconvinced that prices can keep increasing. In a potential sign of pressure, developer Danube has started marketing one bedroom flats “for the price of a studio”.

“I don’t think it will keep going up like that because now there is a lot of competition,” said Talal Al-Gaddah, senior executive vice-chair of developer MAG, who argued that developers would start undercutting each other to capture market share. 

If you price below your rivals, “you win the market faster and you sell faster,” said Gaddah. “So the prices will not go up, because of the massive competition.”

SpaceX Starship rocket explodes minutes after launch

Second straight incident is setback to Elon Musk’s ambitions to build vessel capable of reaching Mars

SpaceX’s massive Starship rocket exploded shortly after launch for a second consecutive time on Thursday, a setback for Elon Musk’s company as it seeks to build a vessel capable of reaching Mars.

Eight minutes after the 400ft rocket system launched from the company’s Starbase in Texas, the upper-stage spacecraft’s engines malfunctioned and the vehicle spun out of control before exploding in the atmosphere above the Caribbean. The lower-stage super heavy booster returned to the launch pad after separation and was caught by mechanical arms.

The eighth Starship test flight had been scheduled for Monday but was cancelled 30 seconds before lift-off due to abnormalities. The malfunction follows a similar failure in January, which also resulted in a fiery explosion and an order from the Federal Aviation Administration to ground all launches pending an investigation.

SpaceX said the vehicle in Thursday’s incident experienced a “rapid unscheduled disassembly” on ascent and that the group was co-ordinating with safety officials to implement “pre-planned contingency responses”.

“As always, success comes from what we learn, and today’s flight will offer additional lessons to improve Starship’s reliability,” the company added.

The FAA said in a statement that it was requiring SpaceX to perform a mishap investigation into Thursday’s explosion. It noted that some aircraft had been temporarily slowed near where debris was falling and that normal operations have since resumed.

A second failure in as many months will raise further questions about the design and viability of Starship, the largest rocket ever built and pivotal to Musk’s ambitions to add to his network of thousands of broadband satellites, win more contracts from Nasa and eventually transport humans to Mars.

SpaceX became the world’s most valuable private start-up late last year, receiving a $350bn valuation in an employee stock sale. Many of Musk’s enterprises, from Tesla to xAI, have seen substantial investor interest since the election due to his proximity to President Donald Trump, to whom he is the biggest donor and an influential adviser.

The mission was intended to further test Starship’s capabilities, including deploying four dummy Starlink satellites and restarting its Raptor engines in space. The upper section was supposed to orbit the Earth and land in the Indian Ocean near Australia.

The incident came nearly two months after the successful maiden launch of Blue Origin’s smaller New Glenn rocket, backed by Amazon founder Jeff Bezos, which is challenging Musk in the satellite launch market. The launch of New Glenn came five years later than originally planned.

SpaceX has reached orbit more than 450 times across a range of vehicles compared with Blue Origin achieving the feat once. The Starship rocket first reached space in late 2023 and first caught the reusable booster section in October.

Caleb Henry, an analyst at Quilty Space, said SpaceX had accepted the risk of failure as part of the learning process. “Today’s launch means there’s still more to learn before Starship can begin flying payloads,” he said.