TheChek News Flow

From Anatolii Papulov, CEO and co-founder of NewOrbit, Reading, Berkshire, UK

The debate around antitrust issues arising from Leonardo and Airbus’s deal to take on SpaceX misses the larger issue facing the space industry (“‘Major’ antitrust demands would destroy Europe space deal, warns Leonardo chief”, Report, July 21).

Europe has many ambitious companies and talented people trying to make Europe a leading international space player in satellites. The issue is that there is not a cost-competitive rocket launching capability to actually get the satellites into space.

One of the major reasons why only Starlink became successful in satellite communications is that it controls its own launch capacity. This capability to launch large numbers of satellites at any time does not exist in Europe.

SpaceX is already ramping down the access to their launch for any external projects as they need this capacity to launch new AI satellites. The alternatives are limited and imperfect, as they do not have the record, reliability or the cheap pricing needed to deploy large satellite constellations.

Europe has the potential to compete in areas not dominated by the US, such as very low Earth orbit satellites. However, if we don’t develop a European launch capability, we risk ending up in a position where Europe’s space ambitions are in effect decided overseas, regardless of if the Airbus and Leonardo deal goes through.

If a European provider can deliver dependable, competitively priced access to orbit, it will not only secure our sovereignty but will tap into a huge and growing global demand for launch that currently has nowhere else to go.

Anatolii Papulov

CEO and co-founder of NewOrbit, Reading, Berkshire, UK

Asian private credit fundraising sinks to 12-year low amid bankruptcy fears

Just five Asia-based funds closed in first half as investors favour large US managers

Asian private credit funds have raised the lowest amount of capital in more than a decade this year, as many investors pull back from the market over concerns about high-profile corporate bankruptcies.

While several larger investors have indicated they are willing to commit to private credit funds despite the negative stories around the asset class, most are favouring large US managers over Asian competitors.

Just five Asia-based private credit funds closed in the first half of this year, raising $1.2bn, according to data from PitchBook. That compared with 29 funds raising $9.5bn last year and 53 funds raising $20.2bn in 2022.

If funds close at the same rate in the second half, 2026 will be the quietest year for Asian private credit fundraising for at least 12 years.

The drop-off is a blow for the Asian market, which was expected to grow significantly in the coming years. It also highlights how investors still interested in private credit are favouring larger, more established fund managers amid rising concerns over the riskiness of the asset class, according to industry analysts.

“In this time of market stress, investors are relying on the big boys to deliver,” said Justin Tan, head of financial services in Asia at LEK Consulting. “There is a gravitation pull towards the larger players who have long track records — and that means the big US managers.”

While Asia’s private credit industry is much smaller and less mature than established sectors in the US and Europe, it has long been thought of as an area of huge potential.

As recently as November, the Alternative Investment Management Association predicted that Asian private credit market assets would swell by 46 per cent to $92bn between 2024 and 2027, growing at a faster rate than more developed regions. Much of the inflow was expected to come from wealthy individuals.

Sean Hung, an analyst at rating agency Moody’s, said he expected Asian investors to reduce their commitments to private credit over the next 18 months. 

“Macroeconomic uncertainty, geopolitical tensions and elevated interest rates [are weighing] on investor appetite for illiquid assets,” he said.

Publicly traded private credit funds have been hit by a wave of redemptions from retail investors over the past year following the collapse of several businesses that borrowed from the funds.

Nevertheless, large investors have committed billions of dollars to the asset class, seeking to profit from the exodus of retail clients.

This month, Singapore state investor Temasek announced plans to increase its exposure to private credit from 2 per cent to 5 per cent by 2031.

“Across the board, we are still seeing reasonably good opportunities in the market,” said Alpin Mehta, head of private equity capital solutions at Temasek’s partnerships business. 

The Temasek-owned alternative asset manager SeaTown International was one of several Asian groups — including Granite Asia — to close private credit funds last year.

However, fundraising in Asia has been dominated by US groups. In December, KKR closed its Asia-Pacific fund with $2.5bn of total investable capital, one of the largest in the region in recent years, according to data provider PitchBook.

Temasek’s fund business Seviora this month closed a $400mn structure known as a collateralised fund obligation with US group Churchill Asset Management to invest across the two businesses’ private credit and private equity funds. Half of the capital raised will be invested in Asia.

Tech group becomes China’s most valuable listed company in mainland’s biggest IPO since 2010

CXMT shares soared more than 500 per cent in their trading debut in Shanghai on Monday as investors flocked to the chipmaker amid booming demand for AI memory chips.

The stock opened at Rmb49.50 ($7.30) a share, compared with an IPO price of Rmb8.66 and rose further in afternoon trading to Rmb54.65.

The surge sent CXMT’s market value to Rmb3.65tn ($539bn), making it the most valuable public Chinese company ahead of Hong Kong-listed Tencent, worth $514bn.

“We knew it was going to be a big IPO,” said Tilly Zhang, a technology and industrial policy analyst at Gavekal Dragonomics in Beijing. “Still, it’s surprising how people have been so enthusiastic.”

The chipmaker is the world’s fourth-largest producer of DRam — the chips used in devices from servers to cameras — behind SK Hynix, Samsung Electronics and Micron.

The IPO was widely anticipated in China as CXMT has benefited from a global shortage of memory chips caused by the enormous AI demand.

CXMT issued 6.688bn shares and raised Rmb57.9bn ($8.5bn), making it mainland China’s largest initial public offering since Agricultural Bank of China in 2010.

There is an overallotment option to issue an additional 1bn shares that, if exercised, will bring the funds raised to nearly $10bn.

The share price jump is part of a broader investor frenzy in mainland China for companies with links to the AI supply chain.

The investor enthusiasm has pushed CXMT’s price-to-earnings ratio above 1,800, although this has in part been justified by surging profits.

CXMT’s debut comes two weeks after SK Hynix, the South Korean memory-chip maker, raised more than $26bn in a US listing.

The Chinese chipmaker is raising money to expand production as well as research and development of DRam chips, which store short-term memory in computers.

CXMT turned profitable this year, raking in Rmb33bn ($4.9bn) in the first quarter alone, in a striking reversal from the Rmb37bn in losses it built up over the past decade. The company has benefited from a surge in demand for memory chips from AI inference, which has triggered shortages and price rises.

Its profits are coming from selling lower-end chips used in consumer electronics, Zhang said: “It’s focused on consumer products like PCs and home appliances because the leading chipmakers are focusing on [high-bandwidth memory] chips.”

The company is also developing HBM chips, the most high-value form of memory used in AI data centres.

However, CXMT lags behind the other global players, in large part because US export controls have barred it from accessing the most advanced manufacturing tools from Netherlands-based ASML.

“It’s not mass-producing” such chips yet, Zhang added.

CXMT’s rise represents a success in Beijing’s push to build its own domestic AI supply chain insulated from US export controls on key technologies.

It received sustained support from the local government in Hefei, the capital of Anhui province, which provided financing, cheap land and help to attract suppliers to move close to the sprawling campus in the city.

TeamSystem’s private equity owners look at stake sale at €8bn valuation

Process could test investors’ willingness to back business software groups with market roiled by AI disruption

The private equity owners of Italian technology group TeamSystem are discussing a sale of a stake in the business at a more than €8bn valuation, in a process that would test investor appetite for software groups as advances in AI drive fears of disruption to the sector.

Hellman & Friedman, the investment firm that acquired TeamSystem a decade ago, is working with bankers to explore the sale of a minority stake in the group, said people familiar with the matter.

The deal could attract interest from other private equity firms, the people said, cautioning that discussions remained at early stages and no transaction was certain.

A successful stake sale with a valuation topping €8bn would represent a strong rise in the business’s worth since California-based Hellman & Friedman acquired it in 2016 for about €1.2bn.

Such a deal would also allow Hellman & Friedman to return cash to some of its own backers at a time when the buyout industry is under pressure to sell assets and return money to institutional investors.

TeamSystem provides accounting, payroll and business management software for small and medium-sized enterprises. The group is rolling out AI products and may be more resilient to technology shifts because of its 3mn-strong customer base, said people familiar with the business.

The group’s sales have grown by several times since its acquisition in 2016 and now generate revenues of €1.15bn. That figure is up from about €250mn a decade ago.

However, investors have grown more skittish about backing software companies this year because of rising fears about AI disruption. Some transactions, such as a planned initial public offering in London of the €19bn European software group Visma, have been shelved because of volatile markets.

Hellman & Friedman has previously sold stakes in TeamSystem, most recently in 2023. Investors in a separate 2021 deal have enjoyed strong gains of roughly three times their investment, according to a person familiar with the matter.

Alongside TeamSystem, Hellman & Friedman has been active elsewhere in Europe over the past year. The group, which has more than $115bn of assets under management, acquired the business events company Hyve for $1.8bn in June.

Hellman & Friedman and TeamSystem both declined to comment.

Debate over British role shows strained relations during UK-EU ‘reset’ negotiations

France has raised questions over UK participation in a €5bn EU equity investment fund for tech start-ups, in a move that European diplomats say highlights the continuing tensions over the EU-UK “reset” negotiations.

The UK, which left the EU under Brexit six years ago, has agreed to contribute €150mn in seed capital for the fund, which is designed to boost investment in Europe’s tech sector as it struggles to compete with the US and China in the race for technological domination.

Ekaterina Zaharieva, European commissioner for start-ups, research and innovation, told the FT in May there was a “mutual interest” in the UK joining the fund, but diplomats now say Paris is seeking to attach stringent conditions to any deal.

“The French are raising objections. They argue the UK is not in the EU, so why are we gifting the British opportunities when we need to ensure this initiative is an EU initiative for the benefit of EU member states,” said one EU diplomat.

France, alongside some other EU member states, has also argued that striking side deals with the UK risks reducing EU leverage to extract concessions ahead of a crucial summit this autumn to finalise the existing “reset” package with the UK.

“France is taking a hard line, but three or four other member states are also asking ‘what’s in it for us?’ if we let the UK join the Scaleup fund — some are arguing there needs to be a ‘quid pro quo’,” a second diplomat added.

Diplomats said the clock was now ticking on efforts to resolve French objections in order for the UK to be included in the next cycle of the Scaleup Europe Fund which starts from 2027. 

French diplomats said Paris had “no objection” in principle to the UK joining the programme, but had requested details from the European Commission on how the UK — as a non-EU state — should participate in it.

“This is a technical debate. Questions have been sent to the Commission to understand the method of calculation for UK participation,” they added.

EU member states face a 25 per cent cap on the amount of funds they can attract from the pool. Outstanding questions remain on the level of the cap for non-EU members, and the link between contributions and the level of disbursement.  

The argument in some ways echoes the discussions over UK participation in the EU’s €150bn defence procurement fund, which broke down acrimoniously last November when the UK refused Brussels’ demand for billions of euros in contributions. 

Plans for a July summit to finalise the outcome of UK-EU “reset” negotiations were shelved after the resignation of Sir Keir Starmer as UK prime minister. A new date has not been set, but diplomats expect a summit in late October or early November.

The UK is seeking a deal to remove border checks on plant and animal products, an agreement to re-link the UK and EU carbon-pricing scheme and a limited Youth Experience Scheme for 18- to 30-year-olds, where significant gaps remain between the two sides.

The Scaleup Europe Fund, which will be run on a commercial basis by Swedish buyout firm EQT, is part of Horizon Europe, a €96bn research programme that the UK rejoined as an “associate country” in 2024. 

Diplomats said the EU’s directorate-general for research and Innovation had held “productive” negotiations with the UK to join the scheme in recent months, but had still not tabled a formal proposal for the UK to join.

The fund’s current cycle ends in 2027 and the next cycle, which will run until 2034, is expected to surpass €5bn, made up of €1bn in Commission seed funding, with the balance coming from pension funds and other sources of private capital.

The UK’s Cabinet Office said the government would not comment on ongoing negotiations.

A spokesperson for the Commission said discussions were continuing and it would be “premature to comment on any positions”.

1. The hole is too big to invent your way out of in the window. Nobody replaces $200bn+ organically by 2030. The gap closes with BD/M&A. Full stop.
2. The deadline is fixed. Unlike every other M&A cycle, LOE dates don't slip with sentiment or rates. Boards can defer a deal a quarter; they can't defer Keytruda 2028.
3. Buyers are price-insensitive at the margin. A 60-80% premium on a $5bn asset is rounding error against a $30bn revenue cliff. That's why deal multiples hold even in soft tape.
4. Supply is cheap. SMID biotech has spent three years de-rating on rates and funding; a large slice of the universe still trades near/below cash-adjusted book with clinical optionality unpaid-for.
5. Dispersion tells you who's forced. MRK/AMGN/BMY/PFE are structural buyers. The low-exposure names (VRTX/LLY/REGN/ABBV) are the ones who can sit out — and they're mostly not sitting out either.