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Hedge funds grow at fastest rate in history as AI boom lifts markets

Equity rally and inflows from institutional investors take global assets under management up by over $400bn

Hedge fund assets grew by the largest amount in history last quarter because of the AI-driven boom in share prices and investors shifting away from private equity and credit funds.

Total assets under management grew by $409bn to $5.6tn last quarter, with much of that being due to positive investment performance, according to specialist data provider HFR.

Hedge funds lost money in a bumpy March after the outbreak of the Iran war. Since then, they have benefited from a huge equity rally led by chip stocks such as Samsung, AMD and SK Hynix.

“I think this is going to be a golden era for hedge funds after a long, long time,” said Shenan Dhanani, co-chief executive at Trium Capital, which manages $5.1bn in assets.

Hedge funds have also enjoyed strong investor demand, with the $134bn invested over the last three quarters being the largest inflow over a three-quarter period since 2007, the HFR data showed.

This has partly been down to positive returns during a period where the private equity industry has struggled to return capital to investors. Hedge funds often allow redemptions within between one and six months, while private capital vehicles traditionally take between five and seven years to return capital.

“You have a dissatisfaction with some of the private investments, so people are slowly getting money back from PE and they are not necessarily going to put that back in,” said Patrick Ghali, co-founder of Sussex Partners, which advises large investors on hedge fund allocations.

Macro strategies, where hedge funds make bets on key economic indicators such as economic growth and inflation, are the most desirable strategy so far this year according to HFR inflow data.

Allocators such as big pension funds and endowments have looked to insulate their equity portfolios from market swings caused by geopolitical risks, including the potential fallout of the Iran war or a further escalation of the global trade war that US President Donald Trump started last year.

However, while hedge fund exposure to equities can be a boon during rallies, there are signs that a reversal in equity markets could damage many funds. Hedge fund correlation to stocks last year was the highest it has been in at least five years, according to research from BNP Paribas published in January.

Hedge funds sustained large losses after Trump unleashed a global trade war in April last year, although they recovered their losses once he toned down the measures and the AI investment boom continued.

Allocators pulled over $100bn from the global hedge fund industry in 2022 when many failed to protect their investors from a global crash in equity markets.

Hedge funds grow at fastest rate in history

Assets managed by hedge funds rose by the largest amount ever last quarter due to the AI-driven boom in share prices and investors moving away from private equity and credit funds.

Last quarter, total assets under management grew by $409bn to $5.6tn, with investment performance accounting for much of that rise, according to specialist data provider HFR.

Hedge funds lost money in a volatile March following the outbreak of the Iran war. Since then, they have benefited from a powerful equity price rally led by chip stocks such as Samsung, AMD and SK Hynix.

“I think this is going to be a golden era for hedge funds after a long, long time,” said Shenan Dhanani, co-chief executive at Trium Capital, which manages $5.1bn in assets.

Hedge funds have also received strong investor demand, with the $134bn invested over the last three quarters being the largest inflow over a three-quarter period since 2007, the HFR data showed, writes Costas Mourselas.

This has partly been down to positive returns during a period where the private equity industry has struggled to return capital to investors. Hedge funds often allow redemptions within between one and six months, while private capital vehicles traditionally take between five and seven years to return capital.

“You have a dissatisfaction with some of the private investments, so people are slowly getting money back from PE and they are not necessarily going to put that back in,” said Patrick Ghali, co-founder of Sussex Partners, which advises large investors on hedge fund allocations.

Macro strategies, where hedge funds make bets on key economic indicators such as economic growth and inflation, are the most desirable strategy so far this year according to HFR inflow data.

Institutions such as big pension funds and endowments have looked to insulate their equity portfolios from market swings caused by geopolitical risks, including the potential fallout of the Iran war or a further escalation of the global trade war that US President Donald Trump started last year.

Allocators pulled more than $100bn from the global hedge fund industry in 2022 when many failed to protect their investors from a global crash in equity markets.

After a year of holding back on new hires, companies from tech and transportation to defense now say they need more people to work alongside AI

America’s biggest companies say they might need more people after all.

For months, major employers treated hiring as an expensive last resort. Now, a shift is emerging across industries. Companies ranging from railroad giant CSX to Google parent Alphabet GOOGL 0.65%increase; up pointing triangle have told investors in recent days that they plan to hire to meet growth goals or to seize on emerging technologies.

The push to expand head count, at least modestly, is a reversal from the prevailing corporate messaging during much of the AI era. Major employers largely held back on adding people due to economic uncertainties or a belief that artificial intelligence could shoulder more tasks on the job. But some executives say the costs and limitations of AI now demand that more people be added; others want to hire people back following layoffs.

“We actually need to accelerate hiring a bit. We’re a little bit behind right now,” Booz Allen Hamilton’s Chief Operating Officer Kristine Martin Anderson told investors Friday. “We’re addressing that now.”

The government contractor cut thousands of jobs last year as the Trump administration slashed federal contracts and asked firms to justify their costs. Total head count stood at roughly 30,900 as of June 30, down 7.5% from a year earlier. But the company now sees healthy demand for its services, including in national security for workers who need security clearances.

For much of the past 18 months, big employers were convinced fewer workers meant faster growth. U.S. public companies shrank their white-collar workforces. Now layoffs are shrinking. The most recent week of U.S. jobless claims was the lowest on record since 1969, according to federal data.

Part of the change in hiring also reflects a recalibration among employers about what AI can do, said Sarah Franklin, CEO of the human-resources platform Lattice. Many companies stopped hiring entry-level employees, thinking AI agents could pick up the slack. They have since realized that humans are necessary to work alongside AI.

“Just because you have coding agents doesn’t mean you’re not hiring engineers,” she said, adding that companies with AI sales agents also need salespeople.

Across Lattice’s thousands of clients, many are now back in hiring mode for a number of roles, particularly junior positions.

“There’s a big thirst for that,” Franklin said. “What you have now is a realization that you need the AI-native skills. You need this [entry-level] workforce, which is innovative, not calcified in thought. They’re also more affordable because they are newer to the workforce.”

The pickup in hiring goes beyond white-collar professions. Tool maker Snap-on said it plans to add employees to expand its business. CSX said its train and engine service head count will “increase modestly” in the coming months to help it meet higher demand, even as it looks to technology to make up for attrition in other parts of the company. The transport company noted its head count is still lower than it was a year ago.

Few companies are saying they plan to go on major hiring sprees, and employers are also making clear they are in the market for certain types of workers.

Alphabet Chief Financial Officer Anat Ashkenazi said the technology company expects to continue hiring in key investment areas such as AI and cloud computing. The software company ServiceNow wants to hire more “quota-bearing feet-on-the-street sales execs” to capture growth in areas like cybersecurity.

M. Keith Waddell, CEO of staffing firm Robert Half, said that AI’s impacts on the job market are proving to be “more benign than some have feared.” The firm works to place people in roles from tech to financial services, and some clients are recruiting again.

“Hiring demand continues to improve and market conditions are increasingly more supportive of our business,” he said.

Some caution, though, that much remains unclear as AI’s ultimate potential continues to evolve. “Do we need more people? Do we need less people?” asked Paul Osterman, a professor emeritus at MIT, and the author of “Disposable Workers,” a new book on the transformation of employment. “We have no idea. No one has any idea.”

Osterman said many companies treated employees as dispensable, cutting them when convenient, or downgrading them into contractor or part-time roles. He expects that trend to continue in this moment of flux.

“AI introduces so much uncertainty with employers, not sure knowing what they need or don’t need,” he said, adding that the drumbeat of AI’s power to displace humans and save shareholders money won’t stop. “Who’s going to be the victim of all that noise?”

Letter from BuzzBallz maker asks members of Brown family to reconsider previously rejected $15 billion takeover proposal

Sazerac isn’t taking no for an answer.

The maker of BuzzBallz cocktails and Buffalo Trace bourbon has sent a letter to a group of Brown-Forman BF.B 1.48%increase; up pointing triangle shareholders asking them to reconsider a $15 billion buyout offer that had been rebuffed. The group—Class A shareholders—includes members of the Brown family, descendants of the company’s founder who currently control its voting power.

Sazerac’s appeal to investors adds pressure on Brown-Forman managers, who are trying to boost the performance of the company behind brands such as Jack Daniel’s whiskey, Woodford Reserve bourbon and Herradura tequila. Brown-Forman Chief Executive Lawson Whiting announced plans earlier this month to step down once a successor is named.

Brown-Forman and Wolf Pen Branch, a collection of Brown family members who own the majority of Class A shares, issued a joint statement that brushed off Sazerac’s unsolicited proposal. “We are confident in the strength and competitive position of the business, and believe the company is well-positioned to deliver long-term value for all shareholders,” Wolf Pen Branch said in the statement.

Family-owned Sazerac sent an offer to Brown-Forman’s board on May 1 to acquire the company for $32 a share in cash, according to the Friday letter viewed by The Wall Street Journal. The proposal provided a 37.9% premium for Class A shares and a 40.4% premium for Class B shares, as of March 24, according to the letter signed by Sazerac Executive Chairman Mark Brown and Chief Executive Jake Wenz.

Brown-Forman Class A shares closed at $26.71 on Friday, giving the company a market value of some $12 billion. Class B shares closed at $26.08.

Sazerac’s letter said the bid had the backing of Wells Fargo and Apollo Global Management, confirming an earlier Journal report, and additional interest from banks to support the deal.

The letter said the deal would allow Brown-Forman investors to roll over shares into a company with “significant upside” and a higher dividend payout than the current offering.

The combined company would be the U.S. market leader in spirits sales and the world’s second-largest behind Diageo, the letter said.

Since submitting its proposal Sazerac has tried to engage with Brown-Forman’s board but has yet to have substantive discussions, the letter said. “Our offer remains open and our conviction is only enhanced,” it said. The letter added that Sazerac “stands ready to improve the terms of our offer” if Brown-Forman’s board engages on the matter.

The letter went out to shareholders just after the annual Brown-Forman shareholder meeting, held Thursday in its hometown of Louisville, Ky. Nonfamily shareholders and Brown family members alike were in attendance.

Both Brown-Forman and Sazerac are based in Louisville. Sazerac is owned by William Goldring and his family, representing the third and fourth generations of Sazerac family ownership.

Sazerac reported sales of $6.6 billion in the 12 months through March. Brown-Forman had just nearly $5.1 billion in sales in the year ended April 30.

Brown-Forman had earlier been in talks to combine with Absolut vodka maker Pernod Ricard in a deal that included a large stock component. Those talks faltered in late April, a decision Pernod said was mutual and related to differences over deal structure and economics.

Project would be one of the largest AI computing hubs and involve power controlled by the U.S. government

Nvidia NVDA -0.92%decrease; down pointing triangle is in talks to provide a roughly $250 billion backstop for OpenAI as part of a massive data-center project, one of the most ambitious financial transactions yet in America’s artificial-intelligence boom.

The guarantees from Nvidia would help the ChatGPT maker lease a 10-gigawatt project that SoftBank’s 9434 3.25%increase; green up pointing triangle energy subsidiary is developing in southern Ohio, people familiar with the matter said. In total, the project could cost more than $500 billion, including the chips that would go inside the data centers. It would be the largest data-center project announced to date.

The power for the project is controlled by the U.S. government and funded separately by Japan under a recent trade deal. Commerce Secretary Howard Lutnick is involved in deciding who will get the power, some of the people said.

Nvidia’s backing would allow the data-center developer, which is owned by Japanese billionaire Masayoshi Son’s investment firm SoftBank, to raise debt at more favorable terms than it could if OpenAI had no financial backer, since OpenAI has no investment-grade credit rating as an unprofitable private company. The AI company has been in advanced talks to lease the site for several weeks, people familiar with the matter said.

OpenAI is among the companies that has shown most interest in the site, while Anthropic, Microsoft and Google have also spoken to Lutnick about it in recent weeks, one of the people said.

AI companies are desperate to secure chips and power needed to run their models, making megaprojects that have government support or guaranteed power increasingly attractive.

Under the arrangement, Nvidia would guarantee a series of financing vehicles intended to make lenders feel more confident that the funding behind the project is secure, the people said. Terms haven’t been finalized and the deal could fall apart.

The $250 billion guarantee would cover the data-center lease and debt needed to fund its build-out, but not the Nvidia chips that would go inside it. Nvidia, which has invested $30 billion in OpenAI, is also discussing a deal to finance the chip purchase for OpenAI, which could total $350 billion, people familiar with those discussions said. Such circular funding arrangements have caused concerns that the industry is vulnerable if investor sentiment shifts or growth slows for AI companies.

The campus would require roughly 10 gigawatts of electricity, or enough to power several million homes, and take many years to complete. The first phase of the project is expected to be finished in 2028, with around 800 megawatts of power, according to people familiar with the deal.

Lutnick and the Trump administration also have a lot riding on the Ohio project. As part of its commitment to invest in the U.S. in return for lower tariffs, Japan agreed to invest $33 billion in a natural-gas power project on federal land in Ohio that would be operated by SB Energy, which is effectively controlled by Son.

SB Energy has received an investment from OpenAI and SoftBank itself is one of the largest investors in OpenAI. In March, Lutnick, Son and Energy Secretary Chris Wright broke ground on the data-center complex.

By using federal land in Ohio, the government and its partners hope to avoid the permitting headaches and local opposition that are snarling data centers across the country. The project is on a decommissioned uranium-enrichment site about 50 miles south of Columbus. It will still take time to finalize the financing and acquire all the equipment.

The U.S. government will provide a fee to SB Energy for operating the power plant, one of the people said. Japan and the U.S. will split the power sales until Japan recoups its $33 billion, after which the American government will get 90% of the revenue.

The arrangement shows how the administration is trying to accelerate activity in critical industries by directly partnering with the private sector.

The proposed structure reflects a shift under way in how the largest AI build-outs are being financed. Investment-grade technology companies are increasingly using their balance sheets to help smaller companies borrow money for their infrastructure needs, a phenomenon known within the industry as a “credit wrapper.”

Google, for instance, has backstopped some data centers for Anthropic, in part to increase sales of its in-house AI chips, known as tensor processing units.

The data center would be OpenAI’s first as a tenant, bringing it closer to controlling the infrastructure it now primarily rents from cloud providers such as Microsoft, Amazon and Oracle. The company recently raised its projected spending on computing power to around $750 billion through 2030, up from a projection of roughly $600 billion earlier this year. It isn’t clear how the new deal would affect those projections.

The company and Anthropic are racing toward IPOs with eye-watering valuations, increasing pressure on them to continue growing quickly.

With a roughly $5 trillion market value, Nvidia is also racing to lock in greater chip demand. In its most recent annual report, the company warned that data-center funding arrangements could lower its near-term cash flows and increase its exposure to customer credit risk.

Beijing is reordering its rules for the superrich to get more control over how they invest overseas

SINGAPORE—For decades, founders and investors in China’s technology firms used tax-haven shell companies to list overseas and keep billions of dollars in offshore centers. The loophole allowed China’s superrich to bypass strict capital controls and avoid government oversight of their wealth.

Now, the party is ending. In a series of new rules and laws, China is reordering the wealth landscape, seeking to better control how money leaves the country, with effects rippling beyond its borders.

Authorities are pressuring companies to abandon foreign structures and incorporate locally. For those still listing in offshore centers such as Hong Kong, Beijing is demanding that the money earned by founders and insiders from share sales flow back to the mainland. Those holding existing offshore assets now face tighter tax scrutiny of their foreign gains.

Chinese authorities “were not applying or enforcing some of their own rules,” said Erica Tay, a Singapore-based economist at Maybank Investment Banking Group. “They’re now starting to put their house in order.”

China’s new rules are unsettling Asian advisers to the rich. The flow of capital from mainland China has grown so large that Hong Kong last year overtook Switzerland as the world’s biggest cross-border wealth hub, with $2.9 trillion in assets, according to Boston Consulting Group.

Beijing’s rules matter in the U.S. too because investment offices run by families in Asia have become big investors in North America, with about half their portfolio there, according to Swiss bank UBS.

China initially allowed offshore structures because they attracted foreign investors to the country’s nascent tech companies, fueling their growth. In the early 2000s, internet leader Tencent and other Chinese companies sold shares using a legal structure that involved a Cayman Islands parent owning the economic value of the business on the Chinese mainland.

When these companies listed on exchanges outside China, the founders, early investors and employees minted fortunes in currencies that were outside China’s capital controls.

Over the next two decades, nearly every major tech company in China used the same loophole to raise capital by listing in Hong Kong or New York, creating offshore fortunes for thousands of founders, employees and early investors. These individuals often also used tax-haven shell companies to hold their stakes. The mainland companies paid profits to the offshore entities, which disbursed dividends to shareholders in foreign currencies.

The entire system flew in the face of Beijing’s longstanding principle that the government should have control over people’s taking money out of the country. Chinese authorities for two decades have capped the amount of money citizens can transfer overseas at $50,000 annually—the type of regulation that the U.S. and other advanced economies generally don’t impose on their citizens.

An initial public offering of shares by a China-affiliated offshore entity “is a simple way to circumvent the capital controls,” said Edmund Leow, a senior partner in Singapore at law firm Dentons Rodyk.

“If I was the authorities, I wouldn’t be happy,” he said. “They’ve now taken action.”

Beijing has outlined new rules in a series of announcements in recent months from the government, central bank, securities regulator and tax authority. The most recent government directive, issued by China’s cabinet known as the State Council, came into effect this month and outlined how companies and individuals can invest overseas.

Under Beijing’s new system, Chinese founders can still list their companies on offshore exchanges and then cash out shares. But entrepreneurs have to repatriate the money back to China and pay tax before seeking approval to invest overseas, according to lawyers tracking the changes.

“It’s just now every step is visible,” said Paul Jebely, a partner at law firm Sterlington who lives in Hong Kong and represents wealthy clients.

Hong Kong has been one of the hottest global markets for IPOs, raising money for companies and bringing a bonanza for early investors. Directors in Hong Kong-listed companies sold shares in bulk trades worth $7.6 billion last year, the highest level in five years, according to data firm Dealogic.

Beijing wants to tighten control over capital flows while widening the channels for money to leave the country, according to economists and lawyers. It is encouraging everyone, including wealthy entrepreneurs, to invest overseas via closed-loop systems. These take an investor’s yuan, invest it offshore on Hong Kong exchanges or in funds run by asset managers, then return the proceeds of any sale or other profits in China’s currency. This keeps the life of the investment under government oversight.

Buffeted by the storm is billionaire Leaf Li and his brokerage firm, Futu.

Li was an early employee of Tencent, which is now China’s most valuable listed firm. When Tencent listed in Hong Kong in 2004, he became rich overnight. He later founded Futu in Hong Kong to help people invest in global markets. By the end of the first quarter, clients had put $156 billion at his firm, making it one of Asia’s biggest online brokers and wealth managers.

Authorities in May handed Futu a $271 million penalty for what they said was illegal facilitation of cross-border investments, part of a sweep of penalties against similar companies. News of the fine sent Futu’s share price down nearly 30% in a day.

The company has said it is cooperating with Chinese authorities and has told investors that only 17% of its total client assets are from accounts based in mainland China.

Thanks to China’s trade surplus with the rest of the world—which reached $1.2 trillion last year—Chinese companies are earning ample foreign currency. If they brought it all home, that might push up the yuan against the dollar and hurt the competitiveness of Chinese exports. Capital outflows offset that pressure, which is why analysts say Beijing isn’t trying to stop people from investing overseas altogether.

The new policy is also designed to ensure profits earned overseas are taxed, an area that has been poorly policed for decades.

Tax authorities this year have reminded nationals to declare overseas income and noted China’s involvement in the Common Reporting Standard, an information-sharing system among global tax bodies. The new rules issued by the State Council also seek to regulate the transactions of offshore companies owned by Chinese superrich, according to lawyers.

“Even if you make a capital gain outside of China, you have to pay tax now,” said Kevin Woo, a partner at Hong Kong-based law firm Ince.

Nvidia would hold a 4.5% stake in Naver once the transaction has been completed

Nvidia NVDA -0.92%decrease; down pointing triangle will invest roughly $1 billion in South Korean internet company Naver 035420 9.16%increase; green up pointing triangle to help finance an artificial-intelligence data center, deepening the companies’ partnership in AI.

The planned investment could pave the way for a broader multibillion-dollar push into AI infrastructure in South Korea. Naver and Nvidia said they are in talks with U.S. private-equity firm Brookfield to provide up to $9 billion in funding for the project.

The three companies announced in a joint statement issued over the weekend at an AI conference in San Francisco that they plan to build gigawatt-scale, multi-tenant AI cloud infrastructure to support the next generation of AI companies in South Korea and the U.S.

The statement said Brookfield entered into a nonbinding term sheet to fund up to $9 billion and that Naver will fund the remaining amounts to finance the project.

Naver will raise about 1.481 trillion won, equivalent to $1.01 billion, by issuing new shares to Nvidia in an initial investment, the Korean company said in a regulatory filing Monday.

Naver will issue 7.2 million new shares at 204,500 won each through a third-party allotment, with Nvidia as the sole subscriber. Nvidia would hold a 4.5% stake in Naver once the transaction has been completed.

The proceeds will help fund Naver’s AI factory project, which includes an AI data center in South Korea and other computing infrastructure.

Nvidia will supply graphics processing units for the data center, which is expected to have a capacity of 55 megawatts in the first half of 2027, 100 megawatts by the end of that year and 200 megawatts in 2028. The project will eventually expand into gigawatt-scale AI infrastructure, it added.

Nvidia Chief Executive Jensen Huang confirmed the three-way AI partnership over the weekend.

“Together, Naver, Nvidia and Brookfield are building sovereign AI infrastructure at the scale needed to fuel Korea’s startups and industries,” Huang said in a joint statement released by Naver on Saturday, Seoul time.

The partnership will combine Brookfield’s global expertise in AI infrastructure investment, Naver’s AI and data-center capabilities, and Nvidia’s accelerated-computing platform to strengthen South Korea’s AI ecosystem, said Sikander Rashid, Brookfield’s global head of AI infrastructure.

Last month, Nvidia struck a series of deals with South Korean technology companies, including Naver and SK Group, to build large-scale AI infrastructure in Asia. The chip maker is seeking to expand its data-center footprint and extend its AI ecosystem into robotics and other industrial sectors.

Naver, which developed a homegrown large language model, has played a central role in South Korea’s efforts to advance sovereign AI.

Separately, Naver said Monday that it will cancel 1.017 trillion won of treasury shares in August as part of efforts to boost shareholder returns. Naver’s shares rose 8.2% in Monday morning trading, trimming their year-to-date losses to 7.4%.

Singapore Central Bank Tightens Again in Surprise Move

The central bank said imported costs are likely to rise in the coming quarters

SINGAPORE—Singapore’s central bank unexpectedly tightened monetary policy for the second consecutive time, though by less than in April, as it moved to contain inflation risks despite recent softer-than-expected price readings.

Monday’s tightening was forecast by just one of 10 analysts polled by The Wall Street Journal. The other nine expected the Monetary Authority of Singapore to stand pat.

“In an environment of continued heightened uncertainty, this calibrated adjustment to the policy stance builds on the tightening in April,” the MAS said.

The central bank said imported costs are likely to rise in the coming quarters as higher fuel and electronics-input costs lift prices for upstream goods. Adverse weather affecting agricultural output in Singapore’s import markets could also push up food prices.

Core inflation is expected to rise in July and remain elevated into early next year, though domestic price pressures and increases in labor costs should remain contained, the MAS said.

“Inflation should ease more discernibly in the second half of 2027 as global energy prices gradually moderate,” it said.

The MAS maintained its forecasts for both core and headline inflation to average 1.5% to 2.5% this year. It warned, however, that inflation could rise more sharply than expected if Middle East supply disruptions drive another surge in energy prices.

The central bank also expects Singapore’s economy to expand at a firm pace in 2026, widening the positive output gap slightly after above-trend growth in the first half. A positive output gap indicates that economic activity is running above its estimated potential.

The global artificial-intelligence investment cycle should support activity in technology-related industries, while construction and financial services are also expected to remain firm, the MAS said.

Still, an unexpected tightening in financial conditions or a pullback in AI-related investment could undermine the sustainability of growth and weaken inflation, it said.

The MAS said it would increase “very slightly” the rate of appreciation of the Singapore dollar nominal effective exchange-rate policy band while leaving the band’s other parameters unchanged.

The smaller adjustment appears to be a new development, said Galvin Chia, emerging-markets Asia strategist at Société Générale. He estimated the move to be 0.25 percentage point, compared with the more conventional 0.5-point adjustment.

The move suggests greater policy flexibility by giving the MAS room to act earlier and in smaller increments than markets had previously expected, he said in a note.

The decision follows the central bank’s April tightening, its first time in more than three years.

That move ended a policy pause that began after the MAS last eased in July 2025. The central bank loosened policy twice that year to support growth amid the threat of higher tariffs.

The MAS uses the exchange rate rather than interest rates as its main policy tool because Singapore’s trade flows are large relative to its domestic economy. The Singapore dollar is managed against an undisclosed basket of currencies belonging to the city-state’s major trading partners and allowed to fluctuate within a policy band.

The Singapore dollar strengthened slightly against the greenback after the decision.

The MAS said the move maintains an “appropriate appreciation path” for the policy band to contain inflationary pressures. It added that it stands ready to curb excessive volatility.

New Zealand’s ‘rocket man’ takes on Elon Musk and Jeff Bezos

Peter Beck’s Rocket Lab builds internet satellite business to rival Starlink and Amazon Leo

After successfully launching New Zealand’s first rocket into space, billionaire Sir Peter Beck is setting his sights on taking on Elon Musk and Jeff Bezos in the internet satellite business.

Last month, the Rocket Lab founder signed the biggest cheque of his life, agreeing to pay $8bn for US-listed satellite communications provider Iridium.

The deal adds a valuable network and spectrum — often called the “lifeblood of the mobile industry” — to the New Zealand-founded business, which makes and launches rockets and other space components.

“It’s a big swing for Rocket Lab to go and buy something like that, but at the end of the day it’s a positive cash-generating business that’s well established,” Beck told the FT.

Founded in 2006 with the goal of launching lightweight rockets more cheaply and frequently than traditional methods, Rocket Lab is a smaller rival to Musk’s SpaceX and Bezos’s Blue Origin in terms of valuation.

It made its first successful launch in 2009, and by 2017 its orbital Electron rockets had emerged as a competitor to SpaceX’s Falcon 9 for satellite launches.

“When you compare us to Jeff and Elon, we are definitely the plucky upstart,” said Beck. “You don’t hear me talking about mining asteroids orbiting Mars,” referring to Musk’s vision for space mining.

The Iridium deal fulfils Beck’s long-held ambition to expand into satellite services. It also puts Rocket Lab into further competition with Musk and Bezos, who have expanded their Starlink and Amazon Leo satellite networks. SpaceX bought EchoStar’s spectrum for $17bn last year and Amazon acquired Globalstar for $11.6bn in April.

By purchasing Iridium’s network and spectrum over building their own, “we’ve short-cut that by 10 to 20 years”, said Beck. He added that Iridium would benefit from Rocket Lab’s launch infrastructure to reduce the cost and risk of launching a new constellation in the future.

“Whoever has the rocket has the keys to space,” he said.

The acquisition comes at an awkward time for the industry. Rocket Lab’s shares have fallen by more than half from their peak in May as the mania around SpaceX’s initial public offering cools. Beck’s sale of 5mn shares for $465mn has added to the pressure.

The chief executive said Iridium, which unlike Rocket Lab is already profitable, would add a strong customer base and “an incredibly defensible high-value niche” in areas such as maritime communications. Beck said Rocket Lab would look to expand those services.

Luke Pearce, an analyst at CCS Insight, said the acquisition would accelerate competition in the booming sector for low Earth orbit (LEO) satellite services. “This creates another credible LEO competitor alongside players such as SpaceX, Amazon Leo and AST SpaceMobile,” he said.

Rocket Lab has been an extraordinary success story for Beck and for New Zealand. A far-flung sheep farm on the thinly populated east coast of the North Island is now a hotspot for rocket launches.

The country ranks third for the number of rockets launched, behind the US and China, as its remote location has proved ideal for firing projectiles into space without disrupting aviation and maritime traffic.

In the three months to March, the company reported revenue of $200mn, up more than 60 per cent from a year earlier, and narrowed its net loss to $45mn from $60mn.

Valued at $40bn, Rocket Lab is by far the largest company to emerge from “the land of the long white cloud”, which has historically produced national champions from its dairy and white-goods sectors. Despite the recent fall, its shares are up nearly 600 per cent since its 2021 Nasdaq offering.

The listing minted more than 100 millionaires in New Zealand. Former employees have gone on to found some of the country’s most promising start-ups including ag-tech company Halter, automotive supply chain group Partly and local rival Dawn Aerospace.

Rocket Lab relocated its headquarters to California in 2013 and has become a key supplier to the US defence department, but it still launches most of its rockets from a remote site on the North Island’s Māhia Peninsula.

Its large manufacturing facility east of Auckland sits at the base of a sedate cul-de-sac where pūkeko swamp hens peck at the lawns. Inside the factory, 1,000 people assemble rockets under giant New Zealand and American flags.

Beck credits his father for igniting his aerospace passion during his youth in Invercargill, on the tip of New Zealand’s South Island.

The engineer recalled how his father would point at the stars and say: “There could be someone standing there looking back at you.”

“That for me was bigger than anything in my brain,” Beck said, and gave him a “soft spot for the planetary stuff”.

Rocket Lab’s previous acquisitions include companies that supply wheels, cameras, robotics and other essential components used for missions to Mars, Venus and the Moon. Iridium represents a new frontier for the company.

“You definitely make your own luck, but it was fortunate that all of those stars aligned,” Beck said of the deal.

The Exploration Company in talks to raise $300mn for reusable space capsules

An ambitious European space start-up is in talks to raise hundreds of millions of dollars of funding for its plan to develop reusable space capsules in a bid to challenge Elon Musk’s SpaceX.

The Exploration Company (TEC) is discussing raising at least $300mn in new money that could value the company at more than $2bn once the fresh investment is taken into account, according to people familiar with the matter.

Brussels’ new flagship Scaleup Europe Fund, an investment vehicle backed by the European Commission and managed by Swedish investment group EQT, is discussing making one of its first investments into TEC as part of the deal, the people added.

The people cautioned that talks remained ongoing and that figures could yet shift, with no final decisions taken yet.

EQT and TEC declined to comment.

Founded in 2021 and led by chief executive officer Hélène Huby, TEC is one of Europe’s most high-profile start-ups seeking to eventually challenge the dominance of US space groups.

The company has been competing to develop Europe’s first reusable capsule to transport cargo — and the hope is, eventually, people — to the International Space Station. TEC last raised about $160mn in 2024 without disclosing its valuation.

TEC operates out of Germany, France, Luxembourg, Spain and Italy and has offices in the US and UAE.

The company emerged a couple of years ago as one of just two groups to win initial funding from the European Space Agency to build a commercially credible service to low Earth orbit by 2028. Its current family of spacecraft in development is called Nyx. It is also now developing Storm, a rocket engine, according to its website.

The Scaleup Europe Fund was designed to invest in promising European companies in competitive sectors such as artificial intelligence, quantum technologies and semiconductors.

EQT chief executive Per Franzén told the FT that he expects the fund to surpass its planned €5bn target due to strong investor interest.

TEC has previously received backing from investors including Balderton, Bessemer, Cherry, EQT’s venture arm, Plural, Partech and Vsquared among others.