TheChek News Flow

High-profile losses prompt questions over transparency at the UK’s biggest private pension fund

The insolvency application for broadband provider G.Network last month was yet another blow to the Universities Superannuation Scheme. 

The UK’s largest private pension fund had invested close to £300mn in the upstart broadband provider in the depths of the coronavirus pandemic, only to have its equity stake wiped out in a forced sale to a distressed debt specialist five years later. 

On the heels of a disastrous billion-pound writedown in its holding in Thames Water, and a failed investment in battery-maker Northvolt, questions are now being raised over USS’s push into private markets.

“Nothing ever looks very good in terms of what they’ve invested in,” said one USS member, who declined to be named.

Another said transparency was a “huge issue” for the scheme, making it “tricky” to get a clear picture of how private assets had performed. 

While high-profile, the recent losses make little dent on the £77bn scheme or its ability to pay pensions. But the failures have put USS’s strategy under the spotlight, at a time when the government is pushing retirement funds to invest more in private markets to help boost Britain’s ailing economy. 

USS was set up in 1974 to provide pensions for academic and senior administrative staff in the university sector. It now has 577,000 members.

It set up its own private markets team in 2007 and illiquid assets now account for about £26bn, a third of the portfolio. The scheme prides itself on investing directly into private assets to lower costs, with about three quarters of assets managed in-house.

USS’s biggest investment failure links to Thames Water. The holding was valued at £1bn in 2021, when managers believed it would deliver inflation-linked income from water bills. By 2024, its stake was written down to zero and declared uninvestable as the debt-laden utility teetered on the brink of collapse.

A £295mn investment in G.Network in 2020, and an investment in the form of a convertible loan note in Northvolt in 2023, which filed for bankruptcy in Sweden last year, also turned sour.

The investment team sources private market holdings across equities, debt, infrastructure and property, generally looking for companies that help generate returns over a long period with some inflation protection.

Performance is hard to judge: individual assets and private-market returns are not disclosed and the managers rarely comment on individual holdings.

In 2024, USS said this was partly for commercial reasons and also because they “do not want to risk confusing or misleading members into thinking that any one asset has a greater bearing on the security of their promised benefits than it actually does”.

Carol Young, USS’s chief executive officer, said that on a rolling 10-year basis, the private markets group’s performance was “consistently in the high single-to-low double-digit ballpark”.

Still, the headline performance of USS has been lower than other big, open defined-benefit schemes — where members are promised a specific income for life after retirement — in the UK and elsewhere, at 1.7 per cent annualised over the past five years, and 3.9 per cent over 10.

“The overall performance is frankly abysmal,” said Con Keating, head of research at Brighton Rock Group, an insurance company for pension schemes. “Given that there’s been a roaring bull market in equities, and given that they are levered, they should have been doing rather well.”

USS says its primary objective is to meet pension promises, not to maximise outright returns. “We aim instead to deliver returns that comfortably outstrip our liabilities, and we have done that,” said Dame Kate Barker, chair of the board at USS.

“Comparing the returns achieved by our diversified portfolio to a single asset class or public market benchmark overlooks a fundamental point: our approach will look different to someone investing for a different purpose,” she added.

Over the past five years USS’s measure of future liabilities has fallen 10.9 per cent per year as yields on UK debt have risen, dramatically improving the scheme’s funding level. The managers aim to consistently outperform this ‘liability proxy’ to maintain or grow its surplus. It had a surplus of £10.1bn last year, putting its funding ratio at 116 per cent, up from a deficit of £14.5bn in March 2020.

USS does not expect that all the risk taken in its private markets holdings will pay off, but that overall it can generate attractive risk-adjusted returns. 

The fund has had some big successes, such as an investment in Heathrow. This delivered more than £1.2bn of cash in dividends paid and profit on the sale of the stake last year after 11 years of ownership, according to a person close to the fund, who argues its successful investments attract fewer headlines.

Some assets are disclosed in its annual report: USS invests directly in about 40 UK-based private holdings, spanning onshore and offshore wind farms, energy from waste, energy efficiency installations and property. It also invests in 3,000 shared and affordable housing locations and 201 BP service stations.

The vast majority of assets managed by USS are for its DB fund, but its defined contribution section — where final benefits depend on the fund’s performance — has £3.5bn of assets built up from contributions on earnings above £71,484 per year.

USS’s headline annualised performance of 1.7 per cent over the past five years for its DB section compares with about 7 per cent for the Local Government Pension Scheme, while the Railways pension fund has delivered 4.9 per cent.

But comparison with other schemes is not fair: state-backed schemes have less concern about the ability of employers to make pension contributions and they operate in a different regulatory environment, while risk tolerance depends on the appetite of the sector.  

Still, a decision to significantly increase its hedged position in recent years has damped headline returns. The move has strengthened its ability to ensure it can pay pensions at the prevailing rate of interest, to protect members from fluctuations in markets. 

Having a low hedged ratio had been costly to the scheme in the era of very low interest rates. But as the portion of the fund owning index-linked bonds — a way of hedging interest rate risk — grew from 20 per cent in 2019 to almost 40 per cent in 2022, these sank in value as interest rates rose. The real yield on benchmark index-linked gilts fell as low as -3 per cent in 2020 and 2021.  

USS has rules laid out by trustees allowing the investment management team to invest more in growth assets when the hedging ratio — which was about 50 per cent last March — is higher.

Iain Clacher, professor of pensions and finance at Leeds University Business School, said he was “much happier now with the way it’s being run” and members would only see the benefits of its shift in strategy “over a longer time period”.

Barker said: “The scheme is much more resilient to future shocks as a result of the hedging we have done [ . . . ] That will be really important to employers as we take them through the next valuation.”

She added that there were employers who would have liked the fund to de-risk even more in 2023, because of their nervousness about going back into a 2020 position. “As it turns out that wouldn’t have been a great thing to do in the short term,” she said.

In its latest annual report USS said 66 per cent of members trust USS to look after their pension, up from 50 per cent the previous year.  

A history of industrial action highlights the sensitivities the scheme faces when setting the level of employer contributions and member benefits as the scheme has faced big swings in its funding status — meaning the risk it takes needs to be carefully managed.  

Universities carried out widespread strikes between 2018 and 2023 over pension issues, including over increases to contribution rates and a cut to benefits following the scheme’s three-yearly valuation in March 2020; a time of intense market uncertainty as the pandemic hit. 

Despite a turbulent decade, USS is now in the strongest position it has been in for many years. The funding level is at its highest since at least 2004 and contribution rates are the lowest ever for members, and the lowest for employers since 2009.

It also still offers DB pensions — widely deemed as providing superior retirement provision to DC schemes. 96 per cent of the UK’s 4,700 defined DB schemes are now closed to new members. 

USS said its average pension paid, once the full state pension — currently £11,973 — has been factored in, is in line with Pension UK’s “moderate” standard of living, at about £32,000 per year. This is guaranteed for life and members also receive a tax-free lump sum worth three times their annual pension at retirement. USS estimates someone would need a DC pot of about £450,000 to get the same income from a comparable annuity.

“It’s really important to think about if we are giving our members a good deal,” said Barker. “The reason we are all here is that we want to pay pensions and we want to ensure that the sector isn’t damaged by the fact that we’ve taken too much risk.”

€2.4tn asset manager is latest to voice concern over US policymaking and its impact on dollar assets

Europe’s largest asset manager Amundi is reducing its exposure to US dollar assets and turning to European and emerging markets, its chief executive has said.

Valerie Baudson, whose firm has €2.4tn of assets under management, said Amundi would advise clients to shift away from the greenback over the coming year, warning that if US economic policy remains unchanged, “we will go on seeing a [weakening] of the dollar”.

“Amundi has been diversifying a lot and has been advising [clients] to diversify a lot . . . over the last 12-15 months, and is going on advising its clients to diversify their positions for the year to come,” Baudson said in an interview on Tuesday.

Amundi is the latest big investor to say it is looking to cut or hedge its exposure to US assets amid concerns about Donald Trump’s volatile economic policies. The dollar has weakened sharply since the president’s “liberation day” tariff shock last April, a fall given new impetus this year by the US president’s threats against European allies over Greenland and worries about the independence of the Federal Reserve.

Baudson said international investors had initially protected themselves against the fall of the dollar over the past year by buying gold, explaining much of the spectacular rise in the price of bullion during that period.

“What we saw after was a will to diversify from US assets, in order to diversify from the dollar, which was . . . overinvested worldwide,” she added.

Such moves had driven money into European and emerging-market assets, both in fixed income and equities.

Last year, emerging market stocks had their best year since 2017, driven largely by dollar weakness, with gains picking up strongly at the start of 2026.

Amundi’s investments had also become more diversified in terms of geography, sector and company size, the firm added.

Baudson’s comments came after the sell-off in the dollar pushed it to its lowest level in four years at the end of January, falling more than 10 per cent in 12 months against a basket of other major currencies. Gold soared to a record of more than $5,500 a troy ounce in late January, having almost doubled in price over the same period.

The dollar, gold and other assets have since swung sharply in a bout of volatility following Trump’s selection of Kevin Warsh as his nominee to chair the Fed.

Baudson said that “if there is no change in the economic trajectory . . . we might see gold going on [up]”.

She was speaking as Amundi posted record assets under management as of the end of December, fuelled by record net inflows of €88bn last year, and as it announced a €500mn share buyback programme.

Amundi’s calls for a move away from US assets echo some other big asset managers, including US bond giant Pimco, which last month said Trump’s “unpredictable” policies were prompting a “multiyear period of some diversification away from US assets”.

Natasha Brook-Walters, head of the $70bn multi-asset strategies team at Wellington Management, said she was “expressing . . . concerns about the dollar” by buying other currencies such as euros and Australian dollars. “We like emerging markets and increased our [long] positions at the beginning of this year,” she added.

Becky Qin, a fund manager at Fidelity International, said she had “meaningfully reduced” exposure to the US dollar across the $7bn of assets she oversees, adding that she was “still expecting weakness” in the greenback.

Epstein Files’ Most Damning Revelation

Many of tech’s prominent names—Bill Gates, Elon Musk, Reid Hoffman, among others—have been previously linked to Epstein, so the newly public documents present a familiar type of discomfort. But the files also shed fresh light on other aspects of Epstein’s world, including his relationship with Masha Bucher, who acted as his publicist and as a guide to Silicon Valley startups in the years before she became a well-known venture capitalist. Our Jemima McEvoy scooped the details of Bucher’s presence in the Epstein files, and she has quickly followed up her news report with a Weekend piece that probes Bucher’s, uh, complicated rise.

Everything we continue to learn about the Epstein-verse paints an uncomfortable, unglorious picture of how the planet’s wealthiest and most powerful people conduct business and play. And while the files reveal—and reinforce—many ugly truths, I tried to mull over what might count as the most damning revelation. After some consideration, I decided it relates to a matter as incontrovertible as the pull of gravity: Great wealth can’t buy a person good taste. Rather, it provides an excuse to be a weird, picky eater.

I was reminded of this fact when I spied a memo from Peter Thiel’s former chief of staff buried in the Epstein files that gives a lengthy list of what Thiel wants to eat—and what he won’t eat.

When someone gets as wealthy as Thiel, they have a tendency to lean into their eccentricities and preferences, which is not always the most charming characteristic. And amusingly, the Thiels of the world are often completely OK with how their various preferences and ideas seem to conflict with each other. Thiel, for instance, apparently insists on avoiding mayonnaise. But he also specifies that he enjoys spicy tuna with avocado, which, of course, usually involves sriracha sauce and…mayonnaise. He’s the type of guy who insists he’s on a diet and then gets caught knuckle-deep in a can of frosting, fingers full of Funfetti.

Thiel avoids dairy, fruit, gluten and grains. Such abstinence makes me worried about his digestive system. If the Antichrist doesn’t actually show up soon, the venture capitalist might instead suffer an untimely death by constipation.

What we learned about Thiel’s diet is a small encapsulation of a broader truth about moguls and machers. Behind closed doors, they often act weird as hell. (Epstein understood that as people grow richer, they feel more entitled to indulge in whatever weirdness they can imagine, and he catered to their behavior.) Occasionally, we get glimpses of just how weird they can be, which they dislike. That’s because we generally spend our time lionizing these people, and they’ve come to expect and covet such adoration.

And I think “weird” is the most generous characterization I can muster for why anyone would’ve deigned to stand within nine feet of Jeffrey Epstein. No recipe for mayo-less spicy tuna could’ve been worth it.

President Trump has pressured trading partners for investment in U.S. manufacturing plants. What if local industries can’t compete?

MORAINE, Ohio—President Trump spent much of last year courting foreign investment in U.S. factories, promising to replace jobs lost to the global economy. The rise of a Chinese automotive glass plant in the Ohio heartland shows the risks when America’s biggest rival sets up shop.

Ohio’s governor, along with state and federal lawmakers, welcomed Fuyao when the Chinese glassmaking giant took over a closed General Motors factory a decade ago. The project, supported by Ohio taxpayers, was hailed as a step to reviving a battered Rust Belt region. Now, many feel duped.

Competition from the Fuyao Glass America plant is threatening about 250 jobs at a rival glass factory operating since the 1950s. Vitro, the company that owns the longtime plant in Crestline, Ohio, has spent the past year considering whether to shut down, said Carlos Bernal, Vitro’s head of automotive glass.

After announcing plans to close the Vitro plant at the end of 2026, the company told employees last month it would continue operating. Yet the plant’s long-term future is uncertain. Since 2019, Vitro has shut three auto-glass plants in Pennsylvania, Michigan and Indiana—decisions the company attributes in large part to Chinese competition.

The entry of Chinese firms into the U.S. auto industry “not only threatens the safety and security of domestic supply chains,” Bernal said, the companies “jeopardize entire communities that rely on American manufacturing jobs.”

Rivals say they can’t match Fuyao’s lower prices and allege the company employs unfair business and labor practices. The Chinese company supplies GM, Ford, Stellantis and other automakers in the U.S.

Vitro’s concerns reached Washington after federal authorities conducted a raid on the Fuyao plant in 2024. The U.S. alleges that Chinese business owners formed a web of dozens of commercial enterprises in Ohio to “facilitate the harboring, transportation, and employment of illegal aliens at various factories,” including Fuyao, which allegedly funneled $126 million to companies in the scheme, according to a civil forfeiture complaint filed by federal authorities last year in U.S. District Court. No one has been criminally charged in the case.

Fuyao denies any wrongdoing and attributes its success to the same production prowess and economies of scale that have made China the world’s leading manufacturer. The company said its Moraine plant employs more than 3,000 workers—most of them from the area—and is expanding.

“In any industry, long-term success cannot be achieved by price alone,” said Fuyao spokeswoman Stella Zhang. “Our prices are reasonable, and customers choose Fuyao based on a comprehensive evaluation of technological expertise, product quality, delivery reliability, and service excellence.”

Zhang said all employees at Fuyao were authorized to work in the U.S. and that the investigation targeted its suppliers, not Fuyao.

Vitro and its Washington allies say Fuyao’s success reflects a way Beijing might try to hollow out American manufacturing capacity and undermine critical industries.

They argue that Chinese companies can evade tariffs by moving production to the U.S., using low prices to undercut manufacturers in America, a practice known as internal dumping. These companies trounce competitors with a combination of production efficiencies and, allegedly, illegal labor practices as well as subsidies from Beijing, according to China hawks in Washington.

“It’s a really dirty game,” said Elaine Dezenski, head of the Center on Economic and Financial Power at the Foundation for Defense of Democracies, a think tank critical of China.

Fuyao’s success has set off national-security concerns in Congress and some federal agencies—mainly that China could disrupt the American automotive sector and other crucial industries if it gained significant market share at the expense of factories now operating in the U.S.

“The Chinese government is systematically weakening our economy from within our own borders,” said Nazak Nikaktar, a former Commerce Department official in Trump’s first term who oversaw efforts to confront China.

The Chinese embassy in Washington rejected the claim.

While Chinese investment in the U.S. has fallen in recent years, similar complaints are erupting in other industries. U.S.-based copper companies have told the White House and Commerce Department they fear being undercut by Chinese firms building and operating new processing facilities stateside, said people familiar with the matter. The concerns sparked discussion in the Trump administration about how to regulate Chinese firms located in the U.S.

“The Trump administration is committed to securing more investment into American manufacturing, without compromising on our national and economic security or our immigration and antitrust laws,” White House spokesman Kush Desai said.

Leaders at the Vitro factory say they have done everything possible to wring efficiencies out of their decades-old plant, such as installing new equipment and reducing the number of employees. But they still can’t match Fuyao’s prices.

“We’ve seen our volume drop by 50% in the last seven years,” said Rich Parron, plant manager at the Vitro factory in Crestline.

Fuyao declined to provide pricing for its products. A person familiar with recent deals with automakers said Fuyao prices generally run about 10% less than what competitors charge.

Paychecks in peril

Chandra Jarvis has worked 13 years at the Vitro plant in Crestline, a distressed rural town of some 4,500 residents, about a two-and-a-half-hour drive from the Fuyao factory. Union wages helped the 48-year-old single mother support her daughter through nursing school and her son through high school. She said working at the plant, where she is known as “Momma,” provides her and co-workers both financial security and a sense of community. Many now are afraid.

“There are families with young kids that they need to provide for,” Jarvis said—workers who depend on jobs that would be “ripped away” should the plant close.

Roy Dent, a glass-furnace operator, still remembers the plant’s heyday in the 1970s. Then-owner Pittsburgh Plate Glass had around 1,000 employees who worked around the clock to supply auto plants in Detroit and beyond.

“There were times since I’ve been here that I’ve seen helicopters land in a parking lot just to take product out,” Dent said.

Trump’s tariff agenda is meant to restore those glory days, and many Vitro workers say they support the president’s focus on rebuilding U.S. manufacturing. They also are indignant about the government unfurling a welcome mat for Fuyao.

“Wouldn’t you have a little bit of resentment if your job is being threatened?” said Kim Sumner, a 25-year employee at the Crestline plant.

Even supporters of Trump and Vice President JD Vance, who grew up in Ohio, expressed frustration and confusion about why they haven’t been pitched a lifeline. “They say they want to make America great again—where’s our help?” Jarvis asked at a roundtable with a dozen Crestline employees, prompting nods of approval.

Some administration officials are, in fact, discussing ways to limit Chinese investment in the U.S. on national-security grounds, according to people familiar with the matter.

Among the strategies under discussion is closer evaluation of foreign investments in such protected industries as automotive, copper, steel, aluminum and critical minerals, the people said. Yet the president could derail any new restrictions should the U.S. strike an investment deal with Beijing, they said. Trump is expected to meet with Chinese leader Xi Jinping in April.

Trump has said that despite trade tensions with Beijing, he welcomes new investment in the U.S. by Chinese companies, even in the automotive sector which he has used tariffs to protect.

“If they want to come in and build a plant and hire you and hire your friends and your neighbors, that’s great, I love that,” Trump said during remarks at a Jan. 13 meeting of the Detroit Economic Club. “Let China come in.”

Days later, Canadian Prime Minister Mark Carney struck a deal with Beijing to slash a 100% tariff to 6.1% on as many as 49,000 Chinese electric vehicles. Trump responded to the announcement saying, “If you can get a deal with China, you should do that,” before pivoting days later to threaten Ottawa with 100% tariffs if it came to a larger agreement with Beijing.

Chris Kershner, president and CEO of the Dayton Area Chamber of Commerce, is among those who support more foreign investment from qualified nations. He is dismissive of Vitro’s complaints about Fuyao.

“It sounds like a competitor’s just peeved that they’re losing market share,” Kershner said, “and maybe they’re grasping at straws.”

Foreign hands

In July 2024, agents from Immigration and Customs Enforcement, Federal Bureau of Investigation, Internal Revenue Service and Border Patrol, as well as state and local police, entered the Fuyao plant and more than a dozen affiliated businesses.

The U.S. alleges that Fuyao and its affiliate companies created a pipeline to import workers for the auto-glass industry and provided them housing in family-style hotels and transportation to and from the Fuyao facility and other factories.

The affiliates were formed, according to the complaint, to “conceal the multi-million-dollar income generated as a result of the business owners conspiring to harbor, transport, and employ a workforce made in part of illegal aliens.” Some of the employees told law-enforcement agents they were trafficked across the U.S.-Mexico border, the complaint said.

Nearly all of Fuyao’s employees had documentation showing they were legally permitted to work in the U.S., according to the complaint. The company received 33 H-1B visas in the federal fiscal year 2025 for its Ohio facilities, government records show, about 1% of its local workforce. Many employees from Fuyao suppliers named in the investigation didn’t show up for work on the day of the raid, the federal complaint alleged, and none of the absentees had legal permission to work in the U.S.

Zhang, the Fuyao spokeswoman, said all employees at Fuyao were authorized to work in the U.S., and the company has since beefed up the vetting process for new hires among its suppliers. Fuyao declined requests for a tour of its Ohio factory or employee interviews.

A spokesperson for the Chinese embassy in Washington said he wasn’t familiar with the Fuyao case but that Chinese companies “have made significant contributions to promoting domestic employment and economic development in the U.S.”

Vitro—which is based in Monterrey, Mexico—employs 13 Mexican nationals as engineers at its Crestline plant. The company said all of them have legal permission to work in the U.S.

Sen. Bernie Moreno (R., Ohio) wants to see the Fuyao plant under new ownership. Sen. John Husted (R., Ohio), who attended a 2020 celebration marking an expansion of the Fuyao factory while he was state lieutenant governor, said he was concerned about the trafficking allegations.

Rep. Hal Rogers (R., Ky.), chairman of the House Appropriations Subcommittee on Commerce, Justice and Science, inserted language in a government funding bill—which Trump signed in January—directing the Justice Department to detail its efforts to combat alleged human trafficking in the auto-glass industry involving any company with ties to the Chinese Communist Party. Rogers’s district in Kentucky is home to another Vitro plant.

Bryce Burchett, the UAW union chair at the Vitro factory in Crestline, echoed complaints from co-workers about Fuyao’s alleged subsidies and illegal workers. “If we had everything they had, then we would be able to match them on price,” said the 31-year-old father of three. “But right now, we can’t.”

Tehran faces growing pressure over its brutal crackdown on recent unrest as talks with US are set to continue

Iran’s security forces have arrested at least four senior reformist politicians on suspicion of plotting to overthrow the Islamic system, increasing tensions just weeks after the country’s deadliest unrest for years.

The arrests were made at a time of strained relations with the US, which began talks with Iran on Friday, but is still weighing its potential military options against the Islamic republic.

The state-affiliated Fars news agency reported that Azar Mansouri, head of the Reformist Front — an umbrella organisation representing reformist parties — was arrested at her home on Sunday. Mohsen Aminzadeh, a former deputy foreign minister for American affairs, and Ebrahim Asgharzadeh, a veteran politician, were also detained.

The identity of the fourth detainee was not disclosed. State media said some other senior figures had also been summoned to the judiciary.

Fars accused those detained of “targeting national solidarity”, opposing the constitution, co-ordinating with “the enemy’s propaganda” and encouraging “surrender” while establishing “secret mechanisms to overthrow” the Islamic theocracy. Three other prominent anti-regime political activists who have called for a constitutional referendum have also been detained over the past week.

Iran is facing mounting domestic and diplomatic pressure over the unprecedented death toll from the recent street protests and the growing risk of military confrontation with Washington. US President Donald Trump said the US had “very good” talks with Iran on Friday and that negotiations would continue, but warned that the consequences for Tehran would be “very steep” if the sides did not reach a deal.

The Human Rights Activists News Agency has put the number of people killed during last month’s protests at 6,842. The Iranian government has confirmed 3,117 deaths, including members of the security forces, but blamed the violence on what it says were US- and Israel-backed mercenaries and “terrorists”.

Iranian opposition groups abroad claim the death toll runs into the tens of thousands. Western diplomats are examining those estimates but acknowledge it is very difficult to know how many exactly were killed because of limited access to information.

The deaths have shaken Iranian society and prompted reformist politicians to speak out and demand accountability for the crackdown.

Recent Instagram posts by Mansouri reflected deep disillusionment with the possibility of reform within Iran’s existing political structure. She expressed regret over backing Masoud Pezeshkian’s presidential campaign two years ago and called on him to resign.

Mizan, a news agency affiliated with Iran’s powerful judiciary, reported that those arrested on Sunday had engaged in “co-ordinated activities aimed at inflaming the country’s political and social climate amid military threats from the US and Israel”.

Meanwhile, Ali Shakouri-Rad, a senior politician and former reformist MP, has alleged in a leaked audio recording that security forces themselves carried out acts of sabotage during the protests to justify a bloody crackdown, and questioned official claims that foreign agents were responsible for the killings.

Amir-Hossein Sabeti, a hardline lawmaker, said on Sunday that Shakouri-Rad must present evidence for his claims or face trial.

The US stepped up its military presence in Gulf waters south of Iran before the two countries began talks that are expected to continue in the coming days.

According to diplomats and analysts, the White House has demanded that Tehran permanently end all uranium enrichment, accept limits on its ballistic missile programme and halt support for regional militant groups. Tehran has said it can accept limitations only to its nuclear programme.

Abbas Araghchi, Iran’s foreign minister and chief negotiator, said on Sunday that the country could not accept all US demands. He also stressed that the Islamic republic would not give up its right to enrich uranium domestically.

“Standing firm is our greatest challenge at the moment and the responsibility for that rests with the military and the diplomacy apparatus,” he said. “If you take one step back, it is unclear how far back you will have to retreat.”

Driving down costs is a top priority for the head of electric cars at the Detroit carmaker

The head of General Motors’ electric vehicle business is staking his reputation on an unproven battery chemistry to revive the Detroit-based carmaker’s EV fortunes following $7.6bn in writedowns.

Kurt Kelty said his “ambitious and risky” bet on becoming the first global carmaker to use a lithium manganese-rich battery technology, which critics regard as commercially unviable, is necessary to resuscitate US EV uptake. GM expects to deliver its first LMR-powered vehicles in 2028.

“If LMR has failed, then I have failed . . . but if you don’t take any risk, we’re just going to be making the same old thing and just have copycat vehicles out there, and that’s not what I was brought in to do,” said Kelty, an alumnus of Tesla and Panasonic, who was hired in 2024 to spearhead GM’s EV development.

“We need to make some significant improvements to really get that hockey stick growth eventually in EVs,” he added.

After a surge of American enthusiasm for EVs in 2021 and 2022, growth has fallen short of expectations. Slumping sales have resulted in costly write-downs for Detroit carmakers that misjudged the trajectory of EV adoption.

Stellantis and Ford have each recorded multibillion-dollar charges in recent months. GM in January disclosed a $6bn hit related to its stalled EV transition.

Reversing this trend may not be possible this decade, according to Kelty, who predicted EVs were unlikely to take off again until the 2030s.

Of the factors hampering EV adoption, the “biggest one of all”, Kelty said, was the change in regulatory environment under Donald Trump, whose term ends in 2029. Last month, the president announced proposals to slash fuel efficiency standards for US vehicles and withdrew a $7,500 EV consumer tax credit in September 2025.

But Kelty also acknowledged western carmakers had not worked out how to bring costs down sufficiently to spur mass adoption, unlike in China where battery and plug-in hybrid models accounted for more than 50 per cent of new car sales in 2025. In the US, EVs are forecast to account for about 8 per cent of vehicle sales this year, according to Cox Automotive.

LMR batteries would go a long way towards closing the gap, Kelty said, because their use of manganese reduces the need for pricier and harder to obtain critical minerals such as nickel and cobalt used in popular high-performance battery technologies.

He argued LMR offered a middle way between the cheaper but less energy dense “lithium iron phosphate” (LFP) batteries preferred by Chinese cell makers, and the more expensive high-nickel batteries produced by Korean companies that dominate the North American market.

Sceptics note more established EV and battery makers had shied away from LMR because of persistent technological hurdles including so-called “voltage fading”, when a battery’s capabilities decline steeply following multiple charges.

Kelty insisted his team had “solved” the voltage fading issue, although he has not explained publicly how.

The chemistry will give the company access to batteries comparable in cost to LFP batteries produced outside of China, but with a 33 per cent improvement in performance, Kelty said. GM’s LMR batteries would still be more expensive than LFP batteries produced in China, however.

As part of Kelty’s efforts to bring down prices, GM has reduced its reliance on its long-time Korean battery partner LG Energy Solution as it diversifies its roster of cell suppliers. The move also allows the company to use different forms of batteries, including so-called “prismatic” batteries that can be stacked more efficiently.

While GM has not started to procure materials for mass production of LMR batteries, Kelty is confident it will hit its 2028 target. He also confirmed that the group is in talks with other carmakers about the possibility of supplying them with cells for use in rival EVs.

“We are going to win the LMR race and in 2028 when we introduce our product we’re going to be kicking butt, we’re going to be selling a lot of these vehicles,” he said.

GM is up against Ford, which is planning to introduce its own LMR-powered EV by the end of 2029.

But Kelty added that even after LMR battery technology hits the road, western carmakers would need to do more to replicate China’s ability to produce EVs comparable in cost to gasoline-powered vehicles.

“Is [2028] the moment when we get that inflection point? To be upfront — no, I think we still have another big iteration to go after that to drive down cost even further.”

Waymo’s acceleration over the past 18 months is undeniable. The Alphabet-owned self-driving company now operates commercial robotaxi services in six markets, including the San Francisco Bay Area, Phoenix, Los Angeles, Austin, Atlanta, and Miami. It has plans to grow its fleet of driverless taxicabs this year to more than a dozen new cities internationally, including London and Tokyo.

And now it has $16 billion to fuel that expansion. Is it enough?

Talking to a few industry watchers, the answer kept landing in the squishy “sort of” and “it depends” territory.

First the bull case. Alphabet is clearly committed to ensuring Waymo’s success; the parent company is, and continues to be, the primary investor. Which means Waymo isn’t exposed like other AV startups that suddenly lost funding after their backers (often legacy automakers) got skittish or pivoted.

Its ridership and autonomous miles driven stats are also exploding and will likely continue in that trajectory unless it is derailed by regulators. (Waymo provides 400,000 rides every week across six major U.S. metropolitan areas, and in 2025 alone, it more than tripled its annual volume to 15 million rides.)

This doesn’t guarantee success, though, especially if the gauge is set to profitability. Waymo still must solve several problems, including cost and increasing attention from regulators (the company’s chief safety officer just testified in a Senate Commerce hearing). If Waymo wants to simply be the licensor of its AV tech, it will have to move away from being the operator, which means giving up some control. That’s hard with a nascent technology under scrutiny.

And while some of you will fight me on this, it also lacks the in-house manufacturing that Tesla has. Yes, Waymo has automotive partners. But it doesn’t come with the same financial leverage or ability to drive down costs with scale.

The CVC conundrum: fund investors love it, public markets don’t

The private equity firm is good at buyouts, but in an era when diversity is prized, that might not be enough to prop up its shares

Last September, private equity firm CVC chalked up a rare achievement: a record year for cash returned to investors, at a time when the wider industry was still limping through a downturn.

Yet far from sparking celebration among the Amsterdam-listed group’s public market investors, shares fell 4 per cent that morning. Rather than rewarding the previous year’s returns, analysts were fretting about sparse detail on how CVC would deliver the big increase in earnings that the market was counting on.

“It felt like they were holding back,” said one analyst that day. “It might be because they prefer to be conservative . . . they’ve left us a little bit confused.”

That earnings-day disappointment is symbolic of CVC’s conundrum: how to satisfy the demands of two very different types of investor.

The firm is revered by its fund investors as a strong private equity performer. But among shareholders — the public market investors — it has received a muted reception.

The group’s shares have for months hovered around the €14 price at which it listed in April 2024.

This month, an industry-wide sell-off sparked by fears about the vulnerability of private capital groups’ software investments to AI pushed CVC’s share price below that level.

The firm dodged the worst of the latest drubbing because it has less exposure to software companies than some of its rivals. But over the past year, CVC’s shares have shed 44 per cent of their value — performance that is at least 10 percentage points worse than most peers.

“I’m as flummoxed as everybody,” said one shareholder of the firm, which manages €200bn in assets across private equity, credit and infrastructure. “On the fundamentals they’re absolutely roaring.” 

CVC declined to comment. 

CVC’s share price fall can in part be explained by poor liquidity for newly public European companies, according to analysts and shareholders. But there are more company-specific factors at play, too.

The group is widely considered among the best at buyouts: its European private equity funds have returned more than four times invested capital excluding fees since 2021. The firm sent back 15 per cent of its private equity portfolio to investors in 2024, compared with the industry’s 11 per cent. 

But unclear communication at the time of CVC’s listing set investors up for subsequent disappointment over its earnings from performance fees and investment income, which are generated when it sells portfolio companies. CVC’s IPO prospectus put these at €400mn to €700mn in the “medium- to long-term”, which the market took to mean by 2026, analysts said. 

Shortly after the 2024 listing, analysts were forecasting that CVC would deliver more than €500mn in performance-related earnings for 2025 and €650mn for 2026. But as time has passed without CVC reporting earnings to support that, the consensus for 2025 has reduced by half — with results for the year due in March — and by a third for 2026.

“Estimate downgrades relatively proximate to a listing — it’s generally a sign investors don’t like,” said one. 

Richard Clattenburg, portfolio manager at CVC shareholder T Rowe Price, said the firm had not changed its outlook and that its performance-fee earnings were “at the right place”. But, he added, “the way it was communicated at the IPO” had left room for misunderstanding.

CVC has recently hired a senior Morgan Stanley analyst to beef up shareholder relations. But its hazy forecast and hesitation to give more bullish guidance last September also speak to a culture of restrained communications. It is “typically more conservative and cautious in its guidance” than close peers, said Nicholas Herman, equity analyst at Citi.

He said the firm also marks its books conservatively relative to its average exit values, which can appear to investors like value creation is weak compared with less cautious competitors.

Bolder rivals have also built up bigger funds beyond the core private capital business of buyouts. CVC in contrast remains heavily weighted towards its flagship private equity funds, which has caused lumpy growth in management fees.

When big funds exit investments, as CVC has done, they lose management fees on those assets. Meanwhile, CVC’s next flagship vehicle is yet to start raising funds, causing a lull in fee growth. Private equity also produces more episodic performance fees than credit and infrastructure.

“If you want a smoother profile for fees, having a broader range of products raising on an ongoing basis will make a difference,” said Michael Sanderson, an equities analyst at Barclays.

Investors tend to reward smoother fee profiles with higher valuations. CVC’s shares have suffered as a result of its more volatile fee structure, adding to pressure on the firm to diversify away from one core private equity strategy. That pressure was “very keenly felt”, one person familiar with the group said.

Half of its fee-paying assets are now outside traditional private equity, and in January, CVC announced the purchase of Marathon Asset Management, a New York firm with $24bn in assets that specialises in asset-based, liquid and opportunistic debt.

CVC said buying Marathon would fit its growing wealth and insurance channels, and that acquisition came soon after a deal to manage up to $3.5bn for insurer AIG. But neither transaction moved CVC’s share price significantly, and after the Marathon purchase closes, a third of the total fee-paying assets will still come from three outsized flagship buyout funds. The latest of these raised €26bn in 2023; most other CVC funds are smaller than €10bn.

The firm has been looking for other firms to buy, but talks with high-profile US direct lenders HPS and Golub Capital led nowhere.

A person close to CVC said it expected organic double-digit growth to take fee-paying assets to €200bn by 2028, with Marathon providing additional growth.

The firm’s hunt for a direct lender and a real estate group continues, however. Meanwhile, shareholders hope the market will soon price in its 2027 flagship buyout fundraising.

As one shareholder put it: “the question is when will that crossover happen”?

Novo Nordisk faces more gloom from price cuts in crowded anti-obesity drugs market

Danish group’s challenges mount despite winning reprieve after Hims & Hers withdraws plan to sell copycat Wegovy pill

Novo Nordisk endured a turbulent 2025 marked by a sliding share price, intensifying competition and divisions that led to a board exodus. The start to this year shows there is no end in sight to the company’s woes.

The anti-obesity pioneer issued a dismal sales and profit forecast on Wednesday last week that pushed its share price down by almost 20 per cent. The following day, it was hit by news that the US telehealth group Hims & Hers was launching a much cheaper copycat version of its Wegovy pill.

While Novo received a reprieve on Saturday when Hims & Hers said it would no longer offer the discounted product following “constructive conversations with stakeholders across the industry”, the episode highlighted the challenges facing the company.

News of the copycat had enraged the Danish group, which has threatened legal action. It followed Novo’s announcement on Wednesday that it expected net sales to fall by as much as 13 per cent this year — gloomier than what the most bearish analysts had expected.

Mike Doustdar, who in August was appointed chief executive of the maker of the Ozempic and Wegovy blockbuster drugs, was already grappling with how to find new growth areas. He has warned of further losses in Novo’s shares after a drop of more than 50 per cent in the past year.

“I don’t disagree with the notion of some short-term pain to come,” said Markus Manns, a senior portfolio manager and healthcare specialist at Union Investment, who described Novo’s guidance as “shocking”.

“With this kind of guidance, it’s very difficult to see any light at the end of the tunnel,” he added.

In addition to competition in an increasingly crowded obesity market, Novo is facing price cuts in the US that Doustdar has described as “painful” as well as expiring patents in some key markets.

Novo, which was once Europe’s most valuable company, ousted its former chief and suffered board departures last year after a dispute with its majority shareholder, the Novo Nordisk Foundation, over how to stem declines in profit growth and the share price. The company risks falling further behind US rival Eli Lilly, whose share price rose on Wednesday after saying its 2026 sales would jump to at least $80bn, from $65bn last year.

Novo blamed its guidance on what Doustdar called “unprecedented pricing pressure” in the US — its largest market — where efforts by President Donald Trump to lower prices will weigh on how much the company can charge.

As part of the most favoured nation agreement, pharmaceutical groups have to peg US drug prices at the lowest price paid in other developed countries.

For Novo, this means cutting the price of injectable Ozempic and Wegovy drugs from at least $1,000 a month to $350 when purchased on TrumpRx, the president’s new direct-to-consumer website.

The company will also reduce prices for patients covered by the Medicare and Medicaid government insurance plans.

Karsten Munk Knudsen, Novo’s chief financial officer, said the new US pricing models would hurt sales on two fronts: cash-paying consumers and insurance reimbursements. But lower prices can also boost volumes.

“Clearly, what we need to show as a company is that lower pricing in the self-pay segment opens up for more patients starting on our products,” he told the FT.

The US slowdown only tells part of the story.

The company expects growth in international sales to slow to “mid-single digits” this year from about 10 per cent in 2025, due to expiring patents for Wegovy and Ozempic in markets such as Canada, Brazil, India and China. That will allow generic manufacturers to sell the drugs at lower prices.

Novo had been hoping for a boost from January’s introduction of the pill version of Wegovy in the US. It began retailing for $149 at the lowest dose and has already been bought by about 170,000 people.

That optimism was put to the test by Hims & Hers’ attempt to offer a treatment that would have retailed at just $49 a month. Hims & Hers said it remained “committed to the millions of Americans who depend on us for access to safe, affordable and personalised care”.

The withdrawal of the competing product does not necessarily mean the end of Novo’s troubles.

Analysts at Jefferies last month warned that the company faced challenges such as the entry of similar products and the possibility of customers switching from the more expensive injectable Wegovy to the pill version.

Lilly is awaiting regulatory approval for its own anti-obesity pill orforglipron, though it has underperformed Novo’s oral medicine in efficacy and tolerability in trials.

Other major groups, including Pfizer and Roche, are also preparing to launch anti-obesity drugs to challenge Novo and Lilly.

Investors have long complained about Novo’s limited pipeline compared with its peers as well as its dependence on obesity and diabetes treatments, which accounted for more than 90 per cent of its 2025 sales.

One analyst said Novo, which last year lost out to Pfizer in a bid to buy obesity-focused biotech Metsera, needed to acquire new assets to boost its pipeline, adding that business development was a significant weakness.

Knudsen said the company would be interested in adding a GLP-1 drug that could be taken once a month — instead of daily or weekly — to its portfolio.

Novo has also announced two more departures among its senior ranks, with the head of its US business and the boss of product and portfolio strategy both leaving.

It has hired Jamey Millar from Optum, a subsidiary of insurance company UnitedHealth Group, to take on the role of running the US division.

Optum is one of the largest pharmacy benefit managers that act as intermediaries in the industry, and Novo hopes that Millar’s experience in the sector, as well as a three-decade career that included stints at GSK and Procter & Gamble, will benefit the company.

But UBS analysts said the turnover of senior staff “does not provide confidence in the company’s direction”.

Executives face choice between cutting returns to shareholders, raiding reserves or tapping the markets

Big Tech companies will have to raise tens of billions of dollars to fund their skyrocketing investments in artificial intelligence this year, as capital spending outpaces cash flows even among some of the world’s most profitable companies.

Google’s parent Alphabet, Amazon and Meta all surprised investors with the scale of their AI spending plans over the past two weeks. A total of more than $660bn is set to be ploughed into chips and data centres this year as they race to dominate what many in Silicon Valley believe will be the biggest wave of innovation since the internet.

The unprecedented infrastructure build-out will force Big Tech executives to choose between stemming capital returns to shareholders, raiding their cash reserves or tapping the bond and equity markets more than previously planned, analysts say.

“The upside implications for [high-grade debt] issuance are clear from this,” said analysts at JP Morgan, who forecast that tech and media companies would issue at least $337bn in high-grade bonds this year.

Big Tech stocks sold off sharply in recent days as shareholders balked at the gargantuan capex plans and fretted over when the spending was likely to generate a return, although some rallied on Friday.

Amazon signalled with a regulatory filing on Friday that it could soon look to raise fresh capital in debt or equity, though it did not specify an amount or timetable for any such deal. Its shares closed the day 5.6 per cent down after the announcement.

Its planned $200bn capital spending this year is likely to outstrip its cash from operations of $180bn, according to estimates from S&P Capital IQ.

Oracle last week raised $25bn in a bond offering to bolster its huge bet on AI, easing investors’ fears about how it would fund a $300bn deal to provide computing power to OpenAI, the lossmaking ChatGPT maker.

Analysts at TD Securities said the coming week could see as much as $80bn in investment-grade corporate bond issuance, twice the “normal seasonal pace”, driven by potential “mega deals” from the likes of Amazon, Meta and Alphabet.

US investment-grade credit spreads have widened in recent days in anticipation of Big Tech tapping the market, TD said in a note to clients.

The scale of capital investment in building new facilities to train and run AI systems such as ChatGPT, Google’s Gemini and Anthropic’s Claude threatens to overshadow profits at what have until now been some of the world’s most cash-generative businesses.

Analysts at BNP Paribas said that free cash flows at Oracle, Alphabet, Amazon and Meta were starting to “plummet toward negative territory”, with only Microsoft appearing “more resilient, at least for now”.

Meta’s guidance of up to $135bn in capital spending this year compares with analysts’ expectations of $130bn in cash from operations. The Facebook and Instagram parent raised $30bn in October in the social media group’s biggest bond sale to date.

Alphabet is forecast to generate $195bn cash from operations to cover its projected $185bn capex plans, though it must also pay for planned share buybacks and dividends. Its long-term debt jumped from $10.9bn in 2024 to $46.5bn last year, but it ended the year with total cash and equivalents of $126.8bn.

Concern that these internet groups were “moving from an asset-light business model to a more capital-intensive one” had hit tech stocks in recent days, said Russ Mould, investment director at broker AJ Bell, making their cash flow “less visible or predictable than before”.

“Growth in capex is massively outstripping growth in sales” at AI-focused tech companies, Mould said. “The first signs of this are increased use of debt and a reduction in share buyback programmes. A drop in this largesse lessens near-term returns from shareholdings in these firms.”