FT : Gold miner Newmont seals $19bn deal for Australia’s Newcrest

Gold miner Newmont seals $19bn deal for Australia’s Newcrest
Newcrest board recommends shareholders vote in favour of takeover in latest mining industry consolidation

The board of Australia’s Newcrest Mining has unanimously backed a A$29bn ($19bn) takeover offer by its US rival Newmont, paving the way for the world’s largest gold miner to strengthen its grip on the sector.

Subject to a shareholder vote and regulatory approval, Newmont will acquire Newcrest — which it originally founded in the 1960s before spinning off through a merger with BHP — with an offer of 0.4 shares for every one in the Australian business.

The deal will strengthen Denver-based Newmont’s operations in Australia, Canada and Papua New Guinea and potentially create a ripple effect in the industry as smaller mines owned by the combined business are shed.

It is the latest example of consolidation within the global mining industry as major companies look to buy promising operations to increase scale and exposure to critical minerals needed for the energy transition. Newmont’s move significantly increases its exposure to copper and follows BHP’s takeover of rival Oz Minerals, Rio Tinto’s buyout of Turquoise Hill and Allkem’s merger with Livent to create a more substantial lithium player.

Newmont first approached Newcrest in February with an all-share offer but was rebuffed. It raised its bid in April to A$29.4bn, which led Newcrest’s board to open its books.

The slightly lower value of the deal, which includes debt, reflects a decline in Newmont’s share price in the past two months but still amounts to a more than 30 per cent premium on where it stood just before the initial offer was made.

US-listed Newmont’s chief executive Tom Palmer — an Australian who hails from the mining town of Broken Hill — said the takeover represented “exceptional value” for shareholders. “It creates an industry-leading portfolio with a multi-decade gold and copper production profile in the world’s most favourable mining jurisdictions,” he said.

The deal comes against a backdrop of gold prices rising to near record highs as banking sector issues, a dovish stance from the Federal Reserve and uncertainty around the US debt ceiling boosted gold’s safe haven status, said ANZ bank.

Rahul Anand, an analyst with Morgan Stanley, said in a note: “We see the deal, if approved, yielding operational synergies around project sequencing and growth optionality, as well as the combined entity increasing its diversification of operations in low-risk jurisdictions.”

Palmer said due diligence had identified synergies of $500mn that the company expected to achieve within two years of the deal completing, as well as opportunities to enhance cash flow by $2bn in that period.

Newcrest will pay a final dividend to shareholders as part of the takeover agreement. The combined business will retain a secondary listing on Australia’s stock exchange.

FT : Shares jump in Chinese state enterprises as investors seek high yield

Shares jump in Chinese state enterprises as investors seek high yield
Government-run organisations offer better returns than bond market

Investors are ploughing money into shares of China’s state-run enterprises as they seek a haven from weakness in the Chinese economy and better returns than those offered by the country’s government bond market.

Since the start of April, shares in government-run banks have rocketed with state lenders Bank of China and Industrial and Commercial Bank of China up more than 20 and 10 per cent, respectively, in a rare rally for the country’s bank shares.

More generally, Hong Kong’s Hang Seng Red Chips index of state-run enterprises has climbed about 10 per cent this year compared with a slight loss for the broader Hang Seng China Enterprises index.

The rally in SOE stocks reflects a hunt for higher dividend yield, analysts said, as a range of China-focused investors lose their appetite for government bond yields that have been driven sharply lower by investors’ flight to safety in the face of economic uncertainty.

“Funds that chase after absolute returns are hunting for stocks with high dividend yield,” said Wang Xin, an analyst with Guosen Securities. Wang added that the recent gains had been fuelled by buying from a wide range of investors, including local punters, foreign investors, insurers and even the banks’ own investment funds.

The shift into bank stocks reflects investors’ appetite for steady and low-risk returns on investment, which is now more easily satisfied by dividend payments from state stocks than Chinese sovereign bonds.

Where easing measures have pushed yields on 10-year Chinese government debt below 3 per cent, the country’s biggest banks, which as pillars of China’s financial system enjoy substantial state support, are expected to pay out yearly dividends of around 6 to 7 per cent, according to estimates from Macquarie Group.

Dexter Hsu, an analyst with Macquarie, said support from Beijing helped ensure steady and relatively high dividend payments by state banks, allowing them to outperform renminbi bond yields while providing investors with a safer play than private companies.

Wang Qi, chief executive at fund manager MegaTrust Investment in Hong Kong, said SOEs had also become “prime candidates for trading” thanks to a years-long deleveraging campaign by Beijing that had helped make their balance sheets healthier.

Top officials have also been talking up the valuations in the state sector. Last year, China Securities Regulatory Commission chair Yi Huiman used a high-profile speech to introduce the phrase “valuation system with Chinese characteristics” that has since become a popular term in the industry when analysing the recent surge in value of SOE stocks. Yi also singled out SOEs and state-run financial firms for their “role as pillars of the economy”.

“There aren’t any specific policies there beyond the slogan,” said Wang, at MegaTrust. These stocks have typically lagged behind the market and “the leading SOEs have been directed by the government to find ways to increase their stock valuation — or at least narrow their valuation discount.”

But while the state sector has found renewed favour, especially among China’s many retail investors, analysts said private sector stocks were more likely to outperform if the economy found its footing.

“We indeed see the government wanting to push valuations higher for SOEs,” said Liu Minyue, investment specialist for Asian and global emerging markets equities at BNP Paribas Asset Management. “But this looks more like a short-term trend for share prices. In the longer term, private companies will still have to be the primary drivers of China’s growth.”

FT : The DeFi world faces a jarring transition

The DeFi world faces a jarring transition
Regulators are stepping up scrutiny of crypto marketplaces that operate without meaningful oversight

US regulators have been stepping up their scrutiny of decentralised finance, a burgeoning marketplace for crypto assets that operates without meaningful regulatory oversight.

The Securities and Exchange Commission issued a revised proposal last month clarifying that DeFi crypto trading systems should be regulated like stock exchanges. And the US Treasury also issued a paper in April that pointed out the illicit finance risks in DeFi.

These moves are the latest sign that, even as regulators crack down on crypto’s centralised intermediaries in the wake of the FTX bankruptcy, they are attempting to prevent DeFi from becoming a crypto haven. Doing so will challenge the central animating principles underlying DeFi: self-reliance and the credo that “code is law”.

The failure of FTX exposed the conflicts inherent in the business model of crypto platforms. These platforms play the role of broker, exchange, market maker and custodian — all required to be independent in traditional markets. FTX allegedly used customer assets to prop up its affiliated trading firm, putting those assets at risk and, ultimately, resulting in customer losses.

In the wake of FTX, some in the crypto community pointed to DeFi as the answer. In DeFi, market participants maintain custody of their own crypto assets and transact using protocols — a set of code, standards and processes. This happens without the overt participation of centralised intermediaries. Decentralised exchanges and lending protocols have accounted for more than 10 per cent of daily crypto trading activity at times in 2023.

Regulators around the world, anticipating DeFi as the next frontier in crypto, have studied its risks, guided by the principle that risks should be regulated. The SEC points out that, despite undertaking functions commonly performed by a stock exchange, DeFi trading protocols have not even attempted to comply with securities laws.

But while complying with securities laws is necessary, it is hardly sufficient to make DeFi a trustworthy market. What would it take? At a minimum, market participants must trust they will receive the basic benefit of their bargain, and have recourse if they do not.

DeFi does not adhere to that principle — and arguably turns it on its head. DeFi purports to replace trust in institutions — intermediaries, laws, regulations — with trust in the DeFi protocols. In DeFi, in other words, “code is law”. But, as discussed in a paper by Antonio Weiss, Jonathan Everhart and myself, DeFi has no answer to the simple question: what happens if something goes wrong?

Smart contracts — the “instructions” that enable transactions to be executed on blockchains — will robotically execute the task they are programmed to carry out. However, smart contracts cannot be programmed to address all circumstances that arise in markets.

In traditional markets, participants who suffer harm can seek recourse from intermediaries, regulators and, ultimately, from any counterparty through the legal system. DeFi participants, on the other hand, are expected to accept the outcome even when they are scammed. And DeFi protocols are hacked or exploited on a seemingly daily basis. In 2022 alone, more than $3.1bn of crypto assets were stolen from DeFi protocols, representing more than 80 per cent of all thefts involving crypto assets, according to Chainanalysis.

Ultimately, “code is law” means “caveat emptor”. That doctrine, with its sense of self-reliance, resonates with many in the crypto world. But every meaningful financial market in the world provides recourse to investors who are harmed and accountability for actions that undermine market integrity.

This would require a sea change in DeFi and puncture its aesthetic of self-reliance, which seems driven by nostalgia for a (largely fictional) time before the purity of markets was disturbed by messy laws and regulations designed to bring financial market activities within societal norms.

Indeed, crypto advocates have all but ruled out the possibility of adhering to existing standards, some saying it would actually be impossible. SEC chair Gary Gensler made clear that approach will fall on deaf ears at the regulator. “Calling yourself a DeFi platform is not an excuse to defy the securities laws,” he said last month.

In the end, DeFi is unlikely to flourish if it remains outside regulatory parameters. And yet, it is not clear what remains of the concept if it is brought fully within scope. The transition will be jarring for those who believe that laws and regulations can be replaced by trustless markets where code reigns supreme.

FT : ‘Biotech is the ultimate impact investment’ — family offices can’t get enou

‘Biotech is the ultimate impact investment’ — family offices can’t get enough of it
Strong personal interest in healthcare among reasons for increase in flow of family office money into venture capital

The Lauber family built its wealth in real estate, and that’s where it stayed for decades. But, lately, some of the family money has a buzzy new destination: biotech.

“I’m kind of like a hypochondriac,” says Robin Lauber, the third-generation heir who is diversifying the Swiss family’s wealth, mainly into companies working in cutting-edge biology. Lauber, 30, is particularly interested in longevity medicine, a nascent strand of research that aims to slow down the ageing process.

“I want to continue living as long as possible,” he says, pointing out that there are other animal species that have a lifespan of as long as 200 years.

Lauber is hardly alone among rich people seeking to use science to extend their lives. US tech billionaires are also pouring money into longevity projects, not least the Amazon founder Jeff Bezos.

And old age is only one focus in a wider movement of rich families’ money into healthcare. Around a fifth of single family offices have invested in healthcare or biotech in the past two to three years, according to Alastair Graham, who tracks the investments of some 2,145 single family offices through his database, Highworth Research. The vast majority of those investing in healthcare are in North America and Europe.

“There is a tremendous movement into conversations about the healthcare space,” says Eric Casaburi, who chairs a Florida-based group of Tiger 21, a membership network of around 1,200 wealthy individuals who advise one another on investments and philanthropy. A survey of Tiger 21 members, who are based in the US, Britain, Canada, Switzerland and Portugal, found that nearly a quarter planned to invest in healthcare this year.

The emphasis on healthcare is reflected in the flow of family office money into venture capital — a fast-growing investment channel for young companies. A report in January by Campden Wealth and Silicon Valley Bank, the Californian lender that was rescued from collapse in March, found that, while overall family office investment in venture capital fell back in last year’s market turmoil, from a record $136.9bn in 2021 to $65bn, healthcare investment has remained robust.

The report, which surveyed 139 ultra-high net worth families or family offices, identified popular healthcare themes including the use of artificial intelligence and machine learning for drug discovery and advances in cancer treatment.

Max Kunkel, chief investment officer for global family and institutional wealth in the global wealth management arm of UBS, the Swiss bank, says that healthcare appeals to family offices because three significant trends are driving growth and innovation in the sector: demographics; technological progress; and the unsustainable trajectory of healthcare costs.

“Family offices, especially the more established ones, have a very long term time horizon, and they look at broad trends,” he says. They are also willing to undertake the longer-term investments that are often needed in early-stage biotech because “they don’t fear illiquidity.”

The recent increase in healthcare investment by family offices comes despite the sector’s difficulties in the public markets, where it has suffered from the general move out of growth stocks. The Nasdaq biotechnology index is trading more than 20 per cent lower than its 2021 peak, compared with a decline of about 10 per cent in the wider S&P 500 for the same period.

Lauber’s investment comes from a family fortune built by his grandparents, from property across Switzerland, mainly affordable housing. For two decades the family drew on the income generated by that portfolio without investing it more widely. Then, in 2015, Lauber set up a family office to put the money to work and made his first biotech investments in 2018.

The Lauber family office, Infinitas Capital, still invests in real estate. But about half of the family-office investment now goes into venture capital through two funds, Prediction Capital, which invests in consumer tech and fintech, and Korify Capital, a healthcare-focused fund. About 70 per cent of Korify’s investments are in biotech, and Lauber intends to increase that proportion over time. As well as longevity medicine, Korify focuses on mental health.

Meanwhile, Lauber says almost all his personal wealth — which comes separately from his own entrepreneurial activities, including bringing the US chain Dunkin’ Donuts to Switzerland — goes into biotech investment.

Among Korify’s holdings is New York-based Gameto, which is applying cell-based therapies to areas such as fertility treatment and menopause-linked health problems. Another is Cambrian Bio, also based in New York, which is developing various drugs to target the biological drivers of ageing.

Lauber’s enthusiasm for biotech has proven contagious. He says he has brought about 30 other family offices and wealthy individuals, from Switzerland and further afield, including the UK and US, into Korify Capital. For most of them, he adds, this was their first foray into biotech.

Biotech comes with more risk than many other sectors. Scientific breakthroughs that show promise in test tubes and animals sometimes hit barriers when confronted with the complexities and quirks of the human body. Sometimes, innovations that seem to work when tested on a small group of people fall down when they move into larger, more robust trials.

In 2014, Oxford-based Circassia Pharmaceuticals, an allergy specialist, launched a £581mn initial public offering, a record at the time for a London-listed biotech. But it crashed two years later, after a large trial found its cat allergy treatment was no more effective than a placebo.

While well-connected wealthy investors can play a role in influencing the success or failure of companies in sectors such as real estate or finance — for example, through business contacts — have no levers to pull if the science says the treatment does not work.

Still, the rewards in healthcare can be substantial. The biggest shareholder in BioNTech, the German vaccine maker which partnered with Pfizer to produce one of the world’s most widely used Covid-19 shots, is the family office of twin brothers Thomas and Andreas Strüngmann, who, in 1986, founded generic drugmaker Hexal and later sold it to Novartis for about $7bn.

In 2008, the Strüngmann brothers supported BioNTech with a €136.5mn seed investment in a €150mn round that enabled the founding of the company, according to Highworth Research.

They own 43.5 per cent of BioNTech through an investment vehicle called AT Impf, according to a recent SEC filing, making their stake worth around $14bn. “It’s a great example of the capacity of a single family office to deploy patient capital,” says Highworth’s Graham.

Examples such as this have helped Lauber to make the case to other family offices for investing in the sector. “Covid has shown them that biotech investing can be super rewarding,” he says. “Biotech is the ultimate impact investment.”

As family offices embrace biotech, they are getting smarter about it. Over the past 10 years, family offices have become more professional in how they assess potential investments in healthcare, says Masha Strømme, a former investment banker and research scientist whose Oslo-based family office funds and mentors early-stage biotechs. Her family office’s holdings include Exact Therapeutics, which is developing the use of ultrasound to deliver cancer therapy more effectively.

“PhDs in microbiology and biochemistry as well as medical doctors are now running investments for some of these family offices,” she says. “People are gearing up to know what they invest in,” she says. In the past, many family-office investments into biotech were made “with the heart” into diseases that affected a member of the family, or its close associates, she notes.

Biotech itself may be a relatively risky proposition, but there are ways of reducing risk. The buildings used by the sector, for example, could be a safer bet. That is the view of the Noé Group, the family office of the UK-based Noé family, which made its money in property and is now headed by Leo Noé, son of the founder, Salomon.

In 2020, the Noé Group invested in a large campus in Eindhoven in the Netherlands that brings together laboratories, clean rooms and manufacturing facilities alongside spaces for offices and university lectures. The campus aims to attract a broad range of tenants, from universities to start-ups and larger companies, in order to create a scientific ecosystem.

Noé’s sons, Zvi and Raphael, first visited the site in 2018 and were ready to make an investment in early 2020. The pandemic delayed the investment by a few months, but it also helped to reinforce the case. While people stayed away from offices and retail spaces, laboratories and manufacturing sites were still humming.

Earlier this year, the Noé Group invested €30mn in three buildings with laboratory space in Madrid, Spain, and the brothers say they intend to further expand their portfolio of life science real estate.

Life science is a sector with fast-growing space requirements, says David Bloom, Leo Noé’s son-in-law. That’s in part because biological research increasingly depends on sifting through enormous data sets produced by advances such as large scale genomic sequencing, and those data centres need space. “From a real estate perspective, that’s a good thing,” he says. Bloom’s arm of the Noé Group invests in data centres. Its portfolio includes the Kao Data Campus, in Harlow, which houses Cambridge-1, one of the most powerful computers in the UK.

The Covid-19 pandemic put life sciences under a spotlight, accelerating a growing interest in healthcare that was already under way among family offices, says Nooman Haque, a life sciences investor based in the UK. He says family offices have risen in prominence as sources of capital for venture funding rounds. “It’s not unusual now, even in the UK, for a company when on a fundraising trail to identify a handful of family offices,” he says. “That door has been opened a little bit.”

For some family offices, investment in healthcare is deeply personal, says Los Angeles-based Greg Suess, an adviser to Forbes 400 families for Activist Artists Management, a talent management and advisory group. A few years ago, Suess set up a fund whose key investment themes include the therapeutic applications of cannabis after several of his clients asked about it. Many had personal reasons for their interest, such as a relative with arthritis or anxiety. He says about 20 families are involved in the Activist Green Fund, which manages $2.2mn.

“I got the life-science bug early on,” says veteran tech entrepreneur Hermann Hauser, who co-founded Acorn Computers in 1978, then the chipmaker Arm in 1990. His first meaningful foray into biotech was an early investment in Cambridge-based genome sequencing company Solexa, which was founded in 1998 and later acquired by San Diego-based Illumina for $600mn.

Hauser was impressed by the rate of progress: the cost of sequencing the human genome fell from $10mn to $1,000 — or a factor of 10,000 — between 2007 and 2014. By comparison, the cost of semiconductors took a decade to reduce by a factor of 30, he says. His conclusion: “Computing is incredibly slow compared to life sciences.”

Since then, Hauser has been a key investor in life sciences, both through his family office and the venture capital firm that he co-founded, Amadeus Capital Partners. He says his personal portfolio is split equally between bioscience and tech.

Many figures from the tech world are putting their money into healthcare. Bezos is reported to be a key investor in Altos Labs, a start-up with sites in San Francisco, San Diego and Cambridge, UK, which says its mission is to use “cellular rejuvenation programming to reverse disease, injury and the disabilities that can occur throughout life”. In 2021, PayPal founder and billionaire, Peter Thiel invested heavily in Utah-based Blackrock Neurotech, which aims to help neurologically impaired patients regain lost skills.

Fidji Simo, chief executive of the delivery company Instacart, has co-founded a new medical and research centre in Salt Lake City, Utah, focusing on diseases that involve both the immune and nervous systems.

Paul Kessler and Diana Derycz-Kessler, a husband-and-wife team who are longtime investors in biotech and also founded the Los Angeles Film School, prefer to invest in later-stage public companies via private investment in public equities, or Pipe. During the 1990s, Kessler was one of the pioneers of this investment style, where companies issue shares to private investors directly, rather than through the stock market, although those shares may subsequently be traded publicly. Kessler says Pipe investing allows him to get closer to the management teams and better understand the science.

He says the majority of the couple’s investments are in biotech, although they also invest in energy and tech. “What fascinated me about biotechnology and drug development was how it could extend, improve and create happier lives for people who’ve been afflicted by a horrible disease,” he says. “How many can say they don’t know someone afflicted by cancer?”

Sometimes, the personal aspect comes later. A few years ago, the Kesslers invested in Iovance Biotherapeutics, a cancer immunotherapy company whose most advanced experimental treatment is for melanoma. They were impressed by the science behind the company, which arose from research conducted at the National Cancer Institute in the US under top scientist Steven Rosenberg.

After investing in Iovance, Kessler received a melanoma diagnosis, which has since been treated successfully by surgery. He says: “Because of my melanoma diagnosis — and thereafter surgery — that became very personal.” 

FT : James Anderson returns with Agnelli family backing

James Anderson returns with Agnelli family backing
Former Baillie Gifford partner to launch innovation fund as part of new $3bn investment group

James Anderson, the maverick fund manager, is returning to full-time investing a year after retiring from Baillie Gifford and is teaming up with the Agnelli family holding company for an entrepreneurial venture.

Lingotto Investment Management, a new $3bn firm that is owned by Exor, has appointed Anderson to its team of investors. He will launch a new fund focused on innovation in both public and private markets, starting with about $500mn in assets.

John Elkann, chair of Stellantis and scion of the billionaire Agnelli industrial dynasty, told the Financial Times that his vision for Lingotto was to “provide a home for very talented investment management professionals to join a place which is entrepreneurial and much focused on letting them do what they’re good at and what they love”. 

He added: “We’re not saying we want to play in the alternatives space and we want to build a $100bn business in three years. That’s not the way we reflect. We feel there are very capable investors out there . . . and they don’t necessarily want to be part of a big platform and they don’t necessarily want to be alone.” 

Lingotto will be chaired by George Osborne, the former UK chancellor who is now a banker at boutique advisory firm Robey Warshaw. Osborne has been working with Elkann over the past five years as the chair of Exor’s partners’ council, a role he is stepping back from.

Anderson, 63, is chair of Swedish investment firm Kinnevik. But he is best known for the almost four decades he spent at Baillie Gifford, where he helped turn the Edinburgh-based private partnership into an unlikely star of tech investing through early bets on the likes of Tesla and Amazon.

During Anderson’s tenure as manager of Baillie Gifford’s flagship Scottish Mortgage Investment Trust, from April 30 2000 to March 31 2022, the company gained 1,155 per cent against a 354 per cent return for its benchmark FTSE All-World index during the same period.

However, Scottish Mortage’s performance has soured since Anderson’s exit, which coincided with a regime change in monetary policy. Scottish Mortgage’s shares lost a third of their value in the 12 months to March 31 as growth stocks were curbed by higher interest rates.

Anderson, who at Baillie Gifford was a longtime shareholder in Exor companies, including Fiat Chrysler Automobiles and Ferrari, acknowledged that “it’s been a difficult 18 months” for growth investing but said that the long-term opportunity in sectors including artificial intelligence, healthcare and renewable energy was greater than ever.

“One of the great puzzles to me is that markets have become so sceptical and short term at a time when the pace of innovation and change, and the prospects of returns over five, 10 and 20 years, has got greater than less,” he said.

He added: “It’s essential that we carry on investing in these sectors rather than worrying about what the Federal Reserve is going to do next.” 

The initial $3bn funding for the new venture will be split evenly between Exor and Covea, the French insurer. The joint investment into Lingotto comes out of the relationship built between the two companies after Covea agreed to buy Bermuda-based reinsurer PartnerRe from Exor in 2021 for $9bn. 

In addition to Anderson, Lingotto begins with two other managing partners who are already working at Exor. Matteo Scolari, who joined Exor in 2015 from hedge fund Eton Park, will run a hedge fund strategy focused on public equities investing.

Nikhil Srinivasan, who joined Exor in 2018 after serving as the chief investment officer at Generali and Allianz, will focus on shorter-duration investments in private companies and special situations. His fund was among the backers of a recent $130mn fundraising in UK biotech group Ascend, taking a near 7 per cent stake.

Anderson will continue to be based in Edinburgh but will also have an office in London where Lingotto is based. The company is led by Exor’s longtime chief financial officer Enrico Vellano. In time, it plans to raise money from external investors and add other portfolio managers to the venture.

“It’s an entrepreneurial project,” Vellano said. “We don’t want to judge success in terms of the size of assets under management but in terms of the quality. We want to find people who share our view about how to manage capital.”

Lingotto is named after the historic Fiat factory in Turin, which was inaugurated in 1923 and whose rooftop racetrack featured in the 1969 film The Italian Job.

Last year, Anderson donated $100mn to his alma mater, Johns Hopkins university in Bologna, one of the largest known donations to a university in continental Europe.

FT : Argentina plans emergency economic measures to avoid big devaluation

Argentina plans emergency economic measures to avoid big devaluation
Economy minister Sergio Massa to raise interest rates to almost 100 per cent and step up currency intervention

Argentina will announce on Monday a new round of emergency government measures, including raising interest rates 600 basis points to 97 per cent, to try to stave off the country’s worst economic crisis in two decades.

The Peronist government is desperate to avoid a big devaluation before elections in October. But the South American country is also running out of foreign exchange reserves as Argentines abandon the fast-devaluing peso and embrace the US dollar.

Fuelled by money-printing to finance a large government deficit, Argentine inflation hit 109 per cent a year in April, the highest level since 1991. The economy ministry said the new measures, to be announced Monday, would involve the central bank stepping up intervention in the foreign exchange market to try to slow the peso’s fall.

Economy minister Sergio Massa is also trying to persuade the IMF to bring forward the disbursement of agreed loans and will travel to China on May 29 to seek greater use of the renminbi in foreign trade. Last month, Argentina activated a currency swap with China allowing it to pay just over $1bn of its imports this month in renminbi.

The IMF has already shown leniency towards Argentina over the past year, allowing it greater leeway on targets to increase reserves and reduce money-printing in an attempt to keep a $44bn loan programme on track. It is unlikely to want to bring forward disbursements in the months before a potentially pivotal election, which the government is likely to lose.

Massa also plans to allow the import of food at a zero tariff to try to bring down inflation, a first in a country which is one of the world’s largest grain exporters. The government will also lower interest rates on a state-run scheme for Argentines to buy locally made products on credit, part of an effort to boost national industry.

The latest package of measures does not represent a change of course, more an attempt to reiterate policies of heavy state intervention which have failed to bring down inflation or boost the economy. It also entails risks: constant rises in interest rates are making the servicing of a huge pile of domestic debt increasingly expensive.

“This is just kicking the can a few inches down the road,” said Hector Torres, a former IMF executive director and Argentine diplomat who is now at the Canadian think-tank CIGI.

“I have nothing against central banks using reserves to smooth volatility and fight speculators. But we are already out of reserves, deeply indebted to the IMF, with no access to capital markets. In that situation selling what we owe to the IMF to buttress an exchange rate that is clearly unsustainable is reckless. It can only invite speculators to bet on a new default.”

Economists have criticised the government’s foreign exchange and price controls for creating huge distortions, deterring investment and depressing production. Many forecasters expect Argentina to enter recession this year, with Oxford Economics forecasting a 1.6 per cent fall in GDP, the worst outlook for any major Latin American economy.

Amid a bitter squabble over policy between president Alberto Fernández and his powerful vice-president Cristina Fernández de Kirchner, Massa is seen as one of the Peronist movement’s few remaining options as a presidential candidate for October’s elections.

However, his plan to try to patch up the economy with temporary interventions to avoid painful austerity measures before the election has run into increasing difficulties, compounded by a severe drought which has hurt agricultural exports. Massa’s chances as a candidate now depend on the success of his economic plan over the next few months.

The centre-right opposition has yet to agree on a presidential candidate this year, with support divided between Horacio Rodríguez Larreta, the centrist mayor of Buenos Aires, and conservative law-and-order candidate Patricia Bullrich.

A far-right contender, Javier Milei, has been rising rapidly in the polls and could yet reach a second round run-off if he can increase his support beyond greater Buenos Aires. Milei has campaigned on a radical anti-establishment platform which includes abolishing the central bank and dollarising the economy.

TechCrunch : Fintech startup Brex was among the bidders for SVB’s early-stage an

Fintech startup Brex was among the bidders for SVB’s early-stage and growth portfolios

Brex bid for SVB portfolios
The FDIC finally released the various financial institutions that bid for parts of Silicon Valley Bank’s portfolio. As our fellow fintech enthusiast Alex Johnson pointed out, there was one name that stood out on that list for being “not like the others”: fintech startup Brex.

TechCrunch spoke with Brex co-CEO and co-founder Henrique Dubugras, who confirmed that the company did in fact put its name in the hat for SVB but only for the early-stage and growth portfolios within its business.

The idea actually came from a customer, he said, who thought Brex “could handle those customers better than big banks.” The first week after the SVB meltdown, the FDIC was not going to accept any bids from entities other than banks. During that time, Brex worked to step up for SVB customers in other ways. Then the following week, the FDIC said it was open to selling it by parts — and also open to non-banks submitting bids.

“That’s when we submitted our bids,” Dubugras said.

While the offer didn’t pan out, he doesn’t regret Brex taking a shot at it. “In the end, we think it was just easier for them to sell the whole thing in one piece,” he added.

Still, the startup continues to “keep seeing [its] deposits materially increase,” as not every startup or early-stage that once banked at SVB wants to move their cash over to a big bank.

At one point (in early 2021), Brex was in fact thinking of becoming a bank itself, going as far as to apply for a bank charter, before later withdrawing that application.

Today, Dubugras said that’s not something he thinks is in Brex’s future.