TheChek News Flow

Advocates say reopening pipelines could help settlement with Moscow and cut energy costs

European officials are debating whether Russian pipeline gas sales to the EU should be restarted as part of a potential settlement to end the war against Ukraine, according to people familiar with discussions.

Advocates of buying Russian gas argue it would bring down high energy prices in Europe, encourage Moscow to the negotiating table, and give both sides a reason to implement and maintain a ceasefire.

But raising the idea of reopening flows of Russian gas into Europe, even in preliminary discussions, has already sparked a backlash among Ukraine’s closest allies in the EU.

Three of the officials briefed on the talks said the idea had been endorsed by some German and Hungarian officials, with support from other capitals that saw it as a way to reduce European energy costs. 

“There is pressure from some big member states on energy prices and this is one way to bring those down, of course,” said one official.

Resuming exports to Europe would significantly boost Moscow’s revenues. Before the war, flows through pipelines from Russia accounted for about 40 per cent of the EU’s total supplies, with Germany being the largest importer. 

Donald Trump has demanded an end to the war “soon”, prompting discussions among western capitals about the elements needed for a lasting agreement with Moscow. The US president has also threatened the EU with tariffs unless it buys more liquefied natural gas from America, which is more expensive than piped gas.

Floating the resumption of pipeline sales from Russia has infuriated Brussels officials and diplomats from some eastern European countries, many of whom have spent the past three years working to reduce the amount of Russian energy being imported into the bloc.

“It’s madness,” said one of the officials. “How stupid could we be to even think about that as an option?”

Ukrainian President Volodymyr Zelenskyy said on Wednesday: “Ending the hot phase of the war is critical . . . Diplomatic solutions are preferable — fewer casualties, fewer losses.” His office did not respond to a request for comment on the discussion about resuming Russian gas purchases.

The revival of the debate on gas sales has unsettled some US LNG exporters seeking to sign long-term supply deals with European companies. They fear that any restart of Ukrainian transit could make their products uncompetitive, according to two of the officials.

One of the European Commission’s top energy officials Ditte Juul Jørgensen is in the US meeting LNG exporters this week, for talks that will touch on long-term potential supplies.

The EU’s stated target is to rid the bloc’s energy system of all Russian fossil fuels by 2027. The EU’s energy commissioner Dan Jørgensen is due to present a plan for hitting that goal in March.

But the dire straits of EU’s heavy industries have increased the need for European countries to source cheaper energy. Gas costs in Europe are typically three to four times higher than in the US.

Piped gas from Russia made up about 10 per cent of total supply in 2024 but has halved since a transit contract permitting flows to reach the EU through Ukraine ended in January.

The remaining pipe bringing Russian gas to the bloc is the TurkStream line through Turkey, which provides Hungary with about 7.5 billion cubic metres of gas. Budapest, along with the pro-Russian government in Slovakia, have been lobbying the EU to pressure Ukraine into restarting the gas transit.

“In the end, everybody wants lower energy costs,” said a senior EU official.

Louis Vuitton chief on F1 tie-up: ‘Sport is part of the culture, the life of young people’

Pietro Beccari is betting that the label’s sole title sponsorship of F1 will help it evolve from a fashion brand into a ‘cultural’ one

When the Formula One season begins at the Australian Grand Prix in Melbourne on March 16, the track will look a little different to fans than it did last year.

This time Louis Vuitton has stepped up as the sole title sponsor, and its trademarks will be splashed on the raceway and featured in the opening ceremony and during the presentation of the trophy, for which the brand has created a bespoke leather trunk. It is the first activation of a nearly €100mn a year, decade-long partnership signed between F1 and Louis Vuitton parent company LVMH last year, replacing Rolex. The deal will also involve LVMH’s wines and spirits division Moët Hennessy and its watchmaker Tag Heuer.

Pietro Beccari, who joined Louis Vuitton as chief executive from Dior in 2023, says the tie-up with F1 is a “particularly important” step in the company’s mission to evolve from a luxury brand — the largest and most profitable in the sector, with estimated revenues of €21.9bn — into a “cultural brand”. He pointed to Louis Vuitton and F1’s emphasis on innovation, internationality and high-stakes competition as common ground for a partnership.

“Sport is part of the culture, the life of young people,” Beccari said in a video call from Vuitton’s Paris headquarters last week. “We know that [F1 has] a younger audience than before, and a lot more women who are interested. [F1 is also] focusing on the US, and the US is a very important market for us.”

Ultimately, however, the partnership didn’t come down to demographics. “We didn’t do much calculation. Mr Arnault always goes with his stomach,” Beccari says.

Louis Vuitton first tested the F1 waters through a sponsorship of the Automobile Club de Monaco from 2021 to 2024. It designed the podium and trophy trunks for the annual Grand Prix in Monaco, which were stamped in the brand’s signature Damier checkerboard pattern and a large red and white “V”. The trophy will be presented in similar fashion in Melbourne.

Louis Vuitton will also have a presence on a smaller scale at the remaining 23 races in cities including Singapore, Las Vegas, Abu Dhabi and Montreal.

The brand’s further push into sport commences as the appeal of luxury goods, particularly among young consumers, is waning. The luxury market has shed about 50mn consumers over the past two years, according to a Bain report released in November, in part because Gen Z are turned off by the recent upsurge in prices — what some analysts are calling “greedflation” — and shifting more of their spending to second-hand goods.

Luxury groups have long been affiliated with elite sporting competitions in sailing and tennis, but in recent years have broadened their scope to include more mainstream sports such as football and basketball.

“Vuitton is the go-to luxury brand that does everything for everyone,” says Erwan Rambourg, global head of consumer and retail research at HSBC. “For them to be involved in [F1] — a very visible, high-profile sport where viewership is huge — it makes sense . . . in a way that wouldn’t have made sense for Dior or Chanel or something higher end or edgier. For [Vuitton] to be so open, so democratic, makes a lot of sense.”

In 2019 Louis Vuitton surprised luxury peers when it inked a partnership with online multiplayer video game League of Legends, designing the trophy case and releasing a set of prestige game “skins” for players to dress their avatars in, designed by creative director Nicolas Ghesquière. Analysts found the move particularly savvy in putting the brand before young would-be customers.

The leather goods maker is also expanding into new — and for luxury, sometimes unconventional — categories, most recently introducing a range of branded chocolates. Prices start at $30 for a bar of milk chocolate poured into the shapes that comprise the house’s star monogram, joining fragrances and sneakers as products to entice entry-level shoppers.

Beccari also pointed to the luxury behemoth’s pop-up store at 6 East 57th Street in Manhattan, opened late last year as the main flagship undergoes a renovation, as another step in the brand’s cultural evolution. Conceived as a “café-cum-library space”, shoppers are invited to read and listen to music and sample snacks executed by Michelin-starred chefs. The pop-up is now one of Vuitton’s top three stores globally by sales.

F1 is also hustling to broaden its appeal. A six-season Netflix documentary series has helped the championship extend its reach beyond superfans, particularly among its 40mn American followers, half of whom started following the sport in the last five years.

“Netflix was the first step in completely changing our communication approach,” says F1 president and chief executive Stefano Domenicali, speaking alongside Vuitton’s Beccari on the video call. “We wanted to shift communication from pure sport to a big entertainment platform. We want to be as socially relevant as Louis Vuitton is.”

Forty per cent of F1 fans are female, up from 32 per cent in 2018, helping attract women-focused brands such as Charlotte Tilbury, now a sponsor of F1 Academy.

The league has faced some criticism for the carbon emissions generated by the tour’s vehicles and international travel schedule. “People say we are polluting the world,” says F1’s Domenicali. “We are incorporating sustainable fuel and will be carbon neutral by 2030.”

“It is not [taken] for granted that the biggest luxury group in the world are interested in us,” he continues. “How many things are on the table for Mr Arnault and Pietro [to choose from]? There is a big expectation for us to perform.”

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Chief Christian Sewing still has ‘firm confidence’ that lender will hit target for improving returns in 2025

Deutsche Bank warned investors that costs in 2025 would be higher than expected after fourth-quarter profits plunged and the bank missed its 2024 cost target and analyst expectations as it was hit by litigation charges and higher-than-expected loan losses. 

Germany’s largest lender said on Thursday that it was now targeting a cost-income-ratio — a key efficiency benchmark — of less than 65 per cent this year.

The new target is higher than the bank’s previous aim of keeping costs below 62.5 per cent of income but would still represent a far better performance than the 76 per cent ratio it achieved 2024.

Deutsche narrowly missed its target of keeping costs — excluding litigation charges and restructuring expenses — below €20bn in 2024.

In the fourth quarter, net profit attributable to shareholders fell to €106mn, a 92 per cent decrease on the same period a year earlier and well below the €380mn figure expected by analysts. 

Deutsche Bank chief executive Christian Sewing said he still had “firm confidence” the lender would meet its target of lifting returns on tangible equity to more than 10 per cent in 2025, after they fell to 4.7 per cent last year.

He said the bank was still aiming to generate revenues of more than €32bn in 2025 and added that the lender had made a “strong start . . . this year”.

Mistral: stuck in a start-up limbo

After a week that seems to have blown up many investors’ assumptions about the artificial intelligence race, January 2024 feels like an eternity ago.

At last year’s World Economic Forum, all the buzz was around Mistral, a hot French start-up that had created a world-class AI model with a fraction of the budget of OpenAI or Anthropic.

But this year, Davos was wowed by China’s DeepSeek, which made an even better model for an even cheaper cost — beating Mistral at its own game.

The debate is still raging about whether DeepSeek did so legitimately after OpenAI told the FT it found evidence that the Chinese start-up used its proprietary models to bootstrap its rival.

But back in Paris, Mistral seems to be left in a start-up limbo.

Its $1.2bn in total fundraising and $6bn valuation seem both too much for it to go quietly into the sunset, and too little to keep up with US rivals OpenAI, Anthropic and xAI — who together have raised nearly $50bn as they hurtle towards “superintelligence”.

“They are starting to see the writing on the wall,” one Mistral investor told the FT. “They need to sell themselves.”

Davos Man is still pretty invested in Mistral’s success, as it’s currently Europe’s only AI company taking on OpenAI at its own general-purpose large language model game.

After all, this is a company that was nearly called EuroAI before it launched less than two years ago.

If Mistral were to fold its hand like Inflection or Adept and sell out to Big Tech in some contorted “acquihire” — as many VCs tell DD they believe it will — Europe loses its best hope of a seat at AI’s top table, as well as leverage against the Trump administration’s warmongering against Brussels’ tech regulators.

But as rumours swirl that someone such as Microsoft, Amazon or even SAP might scoop them up, Arthur Mensch, Mistral’s CEO, insists his company is not for sale.

“We think that what we are doing is important [to do] as an independent company,” he told the FT. “So this is not on the table.”

“Necessity is the mother of invention,” quips Mensch. But unless Mistral can pull something out of the bag by the time next year’s WEF rolls around, Europe’s hopes of AI sovereignty look fragile.

Hedge fund bonanza in Miami Beach 

Nothing quite captures the zeitgeist on Wall Street in 2025 like your Uber driving talking about private credit and asset-backed finance.

That was how DD was greeted this week as we pulled away from the Miami International Airport en route to the Global Alts conference. The days-long bonanza in South Beach has become a popular destination for the world’s biggest investors and hedge fund managers to beat New York’s brutal winter.

Fleece vest-clad fundraising executives, allocators and dealmakers fanned out across the city’s Fontainbleau Hotel, the Ritz-Carlton and Nobu to attend a busy schedule of meetings and parties.

Many managers compared the week to speed dating. It’s a chance to try to win capital from potential limited partners, including family offices, pension funds and retirement plans. But the meetings are often limited to just 20 minutes, meaning stamina is key.

It was a rough start to the week. Investors descended on Miami amid a market rout that gripped tech and energy stocks on the heels of DeepSeek’s debut on the world stage.

As DD’s Amelia Pollard took off on one of the first flights out of New York on Monday morning, the plane was filled with a sea of screens turned to CNBC, eyes glued to tickers all in the red.

Yet on Tuesday — as Nvidia recovered a bit from its 17 per cent drop the prior trading day — the mood lightened, and the biggest themes of the year began to percolate.

“Interval funds” was the big buzzword. These are a relatively new creation of funds that are more widely available to retail investors. (Financial giants such as Blackstone helped popularise them.)

The arrival of Donald Trump in the White House is giving a new boost to the fund structure, with many on Wall Street hoping for a softer regulatory regime.

Aside from the lucrative fund structure, though, conversation drifted towards the White House and how a number of potential policies could impact the market this year.

There was a physical presence hailing from Camp Trump, too. Elon Musk’s brother Kimbal Musk made an appearance, as did Vivek Ramaswamy — formerly of the new Doge agency and now “highly likely” running for Ohio governor.

Vivek’s message to the audience? “More people who have a successful track record in business should pursue public service for limited periods of time,” he said. “And then go back to being a capitalist or whatever it is one wants to do.”