TheChek News Flow

After acquiring the US biotech Ventyx Biosciences on 7 January for $1.2bn, Eli Lilly is still considering a takeover of the French biotech Abivax, a competitor in inflammatory diseases. Ventyx’s clinical programs are significantly less advanced than Abivax’s.

According to La Lettre, Eli Lilly is refining a potential takeover offer and could be prepared to pay up to €15bn for Abivax — almost double its market capitalisation, which stood at around €7.8bn on Euronext Paris at the time.

At this stage, no formal offer has been submitted to Abivax’s board, led by Marc de Garidel. Eli Lilly is awaiting guidance from Bercy (the French Ministry of Finance) on whether the transaction would fall under France’s foreign investment control (FDI) regime. The French Treasury, under Bertrand Dumont, is assessing whether Abivax qualifies for review under these rules.

Eli Lilly is not the only interested party. Johnson & Johnson and AstraZeneca are also reported to be monitoring the situation closely.

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Strategic asset

Interest from major pharma groups has driven Abivax’s share price sharply higher. The stock ended 2025 up more than 1,600%, with a strong acceleration after positive Phase 3 results for obefazimod, its lead drug targeting chronic inflammatory bowel diseases.

The haemorrhagic colitis market is viewed as highly attractive. Global sales for treatments in this area are expected to reach $21.2bn annually by 2032, up from $9.2bn in 2025. Abivax aims to begin commercialisation in 2027.

With takeover speculation intensifying, attention is now focused on the JPMorgan Healthcare Conference (12–15 January, San Francisco) — traditionally a key venue for M&A announcements. David Ricks, CEO of Eli Lilly, is expected to attend on 13 January, alongside executives from Johnson & Johnson and AstraZeneca.

Analysts increasingly view Abivax as a takeover target. On CNBC, Stifel analyst Damien Choplain said the company “ticks all the boxes” for a strategic acquisition. Contacted by La Lettre, neither Eli Lilly nor Abivax commented.

With the convergence of crypto and stock trading, Robinhood’s shares are trouncing Coinbase’s.

Robinhood and Coinbase are two of the most popular trading apps, historically concentrating on equities and crypto, respectively. But more and more, they’re competing head to head. Coinbase is launching stock trading, while Robinhood is expanding in crypto. Both are also betting big on prediction markets.

Yet as far as stock performance goes, the two companies couldn’t look more different. Robinhood’s shares rose 186% last year, while Coinbase’s fell 12%. The performance difference is particularly stark given the crypto-friendly administration currently in Washington could have given a boost to Coinbase. Robinhood shares are trading at a price-earnings ratio of 48, based on estimated earnings over the next 12 months, versus Coinbase’s ratio of 41, according to data from S&P Global Market Intelligence.

The stock and crypto markets are increasingly overlapping. It has become easy to effectively trade crypto on the stock market, and crypto markets are moving toward offering a type of stock trading. That convergence has set up a rivalry between Robinhood and Coinbase, which are now competing to serve the same customers and their financial needs.

Robinhood has moved more quickly into new markets than Coinbase has, and its shares performed better last year in part because it had less exposure to the crypto sell-off. This year, the competition could be closer.

Despite crypto volatility, Coinbase shares were on the upswing last year until October, when crypto suffered its biggest decline since FTX’s collapse in 2022. The crypto market is still reeling from that setback, as are Coinbase’s shares.

Robinhood generated about 20% of its revenue from its crypto business in last year’s third quarter.

“If there’s a crypto winter, they’re not going to be suffering from it as much as Coinbase will,” said Dan Dolev, equity research senior analyst at Mizuho, who has a buy rating on Robinhood and a neutral rating on Coinbase. Robinhood, just like Coinbase, offers trading and custody services for crypto, but it lists fewer tokens than Coinbase does.

Robinhood has moved faster and has bet big on surging prediction markets. It launched its first event contract—for the outcome of the U.S. presidential election—in late 2024, and it quickly expanded the offering with more contracts in areas such as sports. Prediction markets became its fastest-growing revenue line, reaching $300 million in annualized revenue, based on figures for the month of October. It has since doubled down on the business by partnering with trading firm Susquehanna International Group in November to buy an exchange that will support prediction markets.

Coinbase is catching up. It waited a year to get into the sector—initially preferring to invest in prediction market startups built on its Base blockchain—even as contenders such as Polymarket took off ahead of the presidential election in 2024. Coinbase finally announced plans to launch its own prediction market last month, in partnership with Kalshi.

Coinbase was also slow on offering stock trading. That may have hurt it during the crypto downturn, when some investors left that market in favor of better-performing stocks. The S&P 500 index, for example, outperformed bitcoin last year, returning 18% versus bitcoin’s decline of 6%.

For years, Coinbase said it wouldn’t get into stocks, focusing instead on building the crypto economy, but it has now changed that stance. The reason, according to Coinbase, is that launching stocks would pave the way for eventually offering tokenized stocks—crypto tokens that represent equities on blockchain. It’s also part of the company’s “everything exchange” strategy to keep users and their money on the platform.

And even on tokenized stocks, Robinhood has moved faster. It already offers about 2,000 stock tokens in Europe after having launched the product last June, said Johann Kerbrat, general manager of Robinhood Crypto. The company picked a format that allows it to move faster without waiting for U.S. regulatory changes. The stock tokens are not actual equities, but rather derivatives that track the price of a stock. Robinhood passes along the economic interest, including dividends, to token holders, but they don’t have the right to vote as shareholders.

Coinbase has said it prefers launching crypto tokens that are linked to the stock directly rather than through a fund. That’s a longer path to take, because it will require regulatory changes from the Securities and Exchange Commission, as well as working with the companies that issue the stocks.

But Robinhood’s move-fast ethos means it sometimes runs into barriers. Last June, Robinhood announced it would offer tokens representing OpenAI and SpaceX to users in Europe. The announcement drew swift pushback from OpenAI, which denounced the product, as well as inquiries from Robinhood’s main regulator in Europe, Bank of Lithuania.

Beyond the initial token giveaways during the promotion, Robinhood hasn’t expanded the product to more private companies, said Kerbrat. He also declined to say when private company tokens would be available in Europe.

Kerbrat said Robinhood answered questions from its European regulator and is also engaging with the U.S. SEC on tokenization rules. One barrier is the accredited investor rules, which restrict small, individual investors from trading private company shares.

Robinhood is hoping to profit from the expected initial public offerings of startups like SpaceX and Anthropic. It is currently seeking SEC approval for Robinhood Ventures, a closed-end fund investing in private startups that it hopes to offer to U.S. individual investors. If the approval comes in time, that could provide Robinhood’s customers with a way to gain pre-IPO exposure.

A Coinbase spokesperson said Coinbase Tokenize will bring new assets including equities, private companies, funds and real estate onto the blockchain. The company didn’t share a timeline.

The bull case for Coinbase includes a proposed federal law regulating the crypto market and a rebound in crypto. “Coinbase is more correlated to altcoin trading volume and sentiment,” said Owen Lau, equity research managing director at financial services firm Clear Street, referring to the wide range of smaller crypto tokens. “If it gets passed, that could trigger altcoin summer,” added Lau, who picked Coinbase as one of his top 2026 buy ideas.

The law could also lead to more new token launches. That could bode well for Coinbase, which spent $375 million last year to buy Echo, an initial token offering platform, in one of its bigger purchases last year.

US suspension of offshore renewable projects adds to market uncertainty

Wind industry bosses have warned of “negative spillover” effects on investor sentiment after the Trump administration suspended leases on all large US offshore wind projects on national security grounds.

Henrik Andersen, chief executive of Vestas, Europe’s largest wind turbine maker, and president of industry body WindEurope, said uncertainty in offshore wind markets could push up the cost of capital, as investors price in greater risks.

He described 2025 as a “rollercoaster” year for offshore wind developers after being hit by stop-work orders from the Trump administration, which argues the technology is expensive and unreliable on top of the national security concerns.

It follows several difficult years for the industry because of rising costs and supply chain strains. Developers, including Ørsted and Equinor, have booked hefty impairments on US offshore wind projects, while Ørsted has also halted a big UK project, Hornsea 3.

In Japan, Mitsubishi pulled out of several projects citing surging construction costs.

Questioned about the cost trajectory in the industry, Andersen said the cost of capital, which reflects the returns investors expect, had not increased in the past year.

But he added that there was “a little uncertainty on some of the offshore markets — probably related out of what has happened in the US — and I think that could be a negative spillover to the cost-of-capital levels”.

Japan’s decision to suspend offshore wind auctions following Mitsubishi’s decision to pull out, and other troubled offshore wind auctions, had added to the uncertainty, he continued.

“When you have a 20 to 30-year investment programme, the only way you can cover yourself for risk is to ask for a higher return,” he said. “When you get impairments in an industry, everyone would start saying, ‘could that hit us as well?’”

Vestas is the turbine supplier for Equinor’s Empire Wind project, which alongside Ørsted’s Revolution Wind and Sunrise Wind is among five large wind farms under construction that have been suspended by the Trump administration.

Both Ørsted and Equinor are challenging the lease suspensions in court. Hearings are scheduled this week.

Ørsted, the world’s largest offshore wind developer, undertook a $9bn rights issue in September in an effort to shore up its finances because of the challenges in the US.

Despite the offshore industry’s challenges, Tinne Van der Straeten, the former Belgian energy minister who starts as the new chief executive of WindEurope on Monday, said Europe’s geography meant the technology had a “beautiful” future. But she warned “it will not fall from the sky” and that there remained “huge investments to be made”.

Wind turbines supply about a fifth of Europe’s electricity, with onshore developments accounting for the majority of the continent’s current capacity. The industry accounts for 370,000 jobs and contributes roughly €52bn to Europe’s GDP, according to WindEurope.

As Belgian energy minister from 2020 to 2025, Van der Straeten was responsible for pushing forward the Princess Elisabeth Island energy hub, which will connect offshore wind projects in the North Sea, despite costs that have soared from early estimates of €2.2bn in 2021 to more than €7bn today.

As part of efforts to protect Europe’s clean energy industries from being undercut by cheap Chinese competition, the European Commission is discussing “made in Europe” criteria that could be applied to specific technologies that benefit from public tenders, such as wind power.

Both Van der Straeten and Andersen said the industry was not in favour of such clauses.

“We were decades building a global supply chain, and therefore onshoring it all back to the shores of Europe is not going to make any of the solutions more competitive,” Andersen said.

Van der Straeten said the industry wanted “a fair and open competition” in global markets, but with a “level playing field”. To allow the rollout of wind energy to continue, policymakers should focus on upgrading the grids and supporting battery storage to back up intermittent renewable power, she said.

ONLINE

Franco-Israeli telecoms tycoon launches latest effort to reduce $50bn debt pile

Telecoms tycoon Patrick Drahi has relaunched the sale of his 50 per cent stake in German superfast broadband network OXG Glasfaser, as the French-Israeli billionaire continues to explore ways to cut his debt pile. 

Drahi, whose Altice unit partnered with Vodafone’s German operation to launch the network in 2023, sent teaser documents to buyers in recent weeks, according to three people familiar with the matter. OXG is valued at about €2bn, according to estimates from New Street Research. 

The attempted sale, which follows an earlier effort to find a buyer last year, comes as Drahi explores options to relieve a debt pile of more than $50bn. The tycoon is considering a sale of his €7bn French fibre network XpFibre and in October rejected a €17bn bid for French mobile operator SFR. 

OXG committed to spending €7bn to roll out fibre broadband to more than 7mn homes in Germany over a six-year period following its launch in March 2023. However, progress has been slow, with the network reaching just 500,000 homes by the end of 2025. The speed of the network rollout is expected to accelerate this year. 

Infrastructure funds such as Antin Infrastructure Partners, which lost out to Drahi when the network was launched, could be interested in a renewed offer, according to a person familiar with the matter. Antin declined to comment.

However, any agreement to sell his stake will require Drahi to get approval from Vodafone, which may complicate an attempt at a quick sale process. Vodafone declined to comment. 

Drahi, who built a telecoms empire including operations in France, Portugal and the US via a $60bn debt-fuelled acquisition spree a decade ago, has come under increasing pressure to refinance and restructure his debts due to rising interest rates.

Last year he finalised a deal with creditors to Altice France to cut the company’s debt burden from €24bn to €15.5bn, while a similar deal could be struck to reduce the €8bn of debt held against his Altice International operation. 

In November the billionaire infuriated Altice International’s creditors by moving the bulk of the group’s assets — including those in Portugal and the Dominican Republic — out of their group of collateral, meaning they could not call on them should the debt not be repaid. 

The move was seen by analysts as a threat to creditors ahead of a potential restructuring, in order to generate a more favourable deal for Drahi.

James Ratzer, analyst at New Street Research, said that although investors had been “sceptical” about other German fibre investments, OXG was a more attractive opportunity.

“We are more optimistic of better returns [from OXG] given the potential to build a longer-term monopoly,” he added.

Altice did not immediately respond to a request for comment.

The nuclear industry is in the mist of a renaissance. Old plants are being refurbished, and investors are showering startups with cash. In the last several weeks of 2025 alone, nuclear startups raised $1.1 billion, largely on investor optimism that smaller nuclear reactors will succeed where the broader industry has recently stumbled.

Traditional nuclear reactors are massive pieces of infrastructure. The newest reactors built in the U.S. — Vogtle 3 and 4 in Georgia — contain tens of thousands of tons of concrete, are powered by fuel assemblies 14 feet tall, and generate over 1 gigawatt of electricity each. But they were also eight years late and more than $20 billion over budget.

The fresh crop of nuclear startups hopes that by shrinking the reactor, they’ll be able to sidestep both problems. Need more power? Just add more reactors. Smaller reactors, they argue, can be built using mass production techniques, and as companies produce more parts, they should get better at making them, which should drive down costs.

The magnitude of that benefit is something experts are still researching, but today’s nuclear startups are depending on it being greater than zero.

But manufacturing isn’t easy. Just look at Tesla’s experience: The company struggled mightily to profitably produce the Model 3 in large numbers — and it had the benefit of being in the automotive industry, where the U.S. still has significant expertise. U.S. nuclear startups don’t have that advantage.

“I have a number of friends who work in supply chain for nuclear, and they can rattle off like five to ten materials that we just don’t make in the United States,” Milo Werner, general partner at DCVC, told TechCrunch. “We have to buy them overseas. We’ve forgotten how to make them.”

Werner knows a thing or two about manufacturing. Before becoming an investor, she worked at Tesla leading new product introduction, and before that, she did the same at FitBit, launching four factories in China for the wearables company. Today, in addition to investing at DCVC, Werner has co-founded the NextGen Industry Group, which works to advance the adoption of new technologies in the manufacturing sector.

When companies of any size want to manufacture something, they face two main challenges, Werner said. One is capital, which is often the biggest constraint since factories aren’t cheap. Fortunately for the nuclear industry, that shouldn’t pose much of a problem. “They’re awash in capital right now,” she said.

But the nuclear industry isn’t immune from the other challenge all manufacturers face, which is a lack of human capital. “We haven’t really built any industrial facilities in 40 years in the United States,” Werner said. As a result, we’ve lost the muscle memory. “It’s like we’ve been sitting on the couch watching TV for 10 years and then getting up and trying to run a marathon the next day. It’s not good.”

After decades of offshoring, the U.S. lacks people experienced with both factory construction and operations. “There are for sure some people in the United States who have been doing this, but we don’t have the quantum of people that we need for everybody to have a full staff of seasoned manufacturing people.” She not just talking about machine operators, but everyone from factory floor supervisors all the way up to CFOs and board members.

The good news is that Werner sees a lot of startups, nuclear and otherwise, building early versions of their products in close proximity to their technical team. “That is pulling manufacturing in closer to the United States because it allows them to have that cycle of improvement.”

To reap the benefits of mass manufacturing, it’s helpful for startups of all stripes to start small and scale up. “Really leaning into modularity is very important for investors,” she said. The modular approach helps companies start producing small volumes early on so they can collect data on the manufacturing process. Ideally, that data will show improvement over time, which can put investors at ease.

The benefits of mass manufacturing don’t happen overnight. Companies will often forecast cost reductions that can result from learning through manufacturing, but it might take longer than they expect. “Often it takes years, like a decade, to get there,” Werner said.

A criminal probe looks at his testimony to Congress over central bank renovations

U.S. prosecutors are investigating Federal Reserve Chair Jerome Powell over his testimony about the central bank’s building renovation project.

The Fed received grand jury subpoenas from the Justice Department that threaten a criminal indictment relating to Powell’s testimony.

Powell said the investigation was a pretext as part of President Trump’s campaign to pressure the Fed to lower interest rates.

U.S. prosecutors are investigating Federal Reserve Chair Jerome Powell over his testimony last summer about the central bank’s building renovation project, according to government officials with knowledge of the matter.

The Fed received grand jury subpoenas from the Justice Department on Friday that threaten a criminal indictment, the Fed chair said in a statement.

In an extraordinary video statement Sunday night, Powell called the investigation a pretext as part of President Trump’s ongoing campaign to pressure the Fed to lower interest rates, and end the independence of the central bank.

“This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions—or whether instead monetary policy will be directed by political pressure or intimidation,” Powell said in a video statement released Sunday night.

The investigation marks the most aggressive step yet in Trump’s campaign to bend the traditionally independent central bank to his will. Trump has publicly berated Powell for being too slow to lower interest rates. Trump has said he was thinking of suing Powell for “gross incompetence.” The administration is also attempting to remove Fed governor Lisa Cook in a case that is before the Supreme Court.

In a brief interview with NBC News Sunday, Trump said he didn’t know about the Justice Department subpoenas and that any criminal investigation wouldn’t be related to disagreements the White House has had with Powell over interest rates.

“I wouldn’t even think of doing it that way. What should pressure him is the fact that rates are far too high. That’s the only pressure he’s got,” Trump said.

The investigation, which is being run out of the office of Washington’s U.S. attorney Jeanine Pirro, a close Trump ally, began in November and is examining Powell’s congressional testimony and the Fed’s spending records, people familiar with it said.

The White House referred questions to the Justice Department. A spokesman for Attorney General Pam Bondi declined to comment on the probe but said she “has instructed her U.S. attorneys to prioritize investigating any abuses of taxpayer dollars.”

Powell suggested potential criminal prosecution wouldn’t affect his ability to continue serving as Fed chair. His term ends May 15, and Trump is nearing a decision on his successor.

“Public service sometimes requires standing firm in the face of threats. I will continue to do the job the Senate confirmed me to do, with integrity and a commitment to serving the American people,” Powell said.

The video statement represented a notable departure for Powell, who has spent years deflecting Trump’s public attacks with measured, apolitical responses. On Sunday, he dispensed with that restraint. With an edge that showed more defiance than usual, he directly accused the administration of using the Justice Department to punish the Fed for not cutting rates.

Presidents of both parties have occasionally grumbled about Fed policy, but Trump has gone further than any modern predecessor, blaming Powell for high interest rates, exploring ways to fire him, and now wielding the Justice Department against him.

A criminal investigation of the Fed chair could rattle Wall Street, where some investors have already braced for more volatility this year as Trump picks Powell’s successor.

“We are stunned by this deeply disturbing development which came out of the blue after a period in which tensions between Trump and the Fed seemed to be contained,” Krishna Guha of Evercore ISI said in a note to clients Sunday evening.

With Powell set to be replaced as chair in four months, the escalation raises questions about whether the Fed will continue to make decisions free from political interference, a principle that economists and market participants have long viewed as important for economic stability.

The investigation drew a sharp rebuke from Sen. Thom Tillis (R., N.C.). “If there were any remaining doubt whether advisers within the Trump administration are actively pushing to end the independence of the Federal Reserve, there should now be none,” Tillis said. “It is now the independence and credibility of the Justice Department that are in question.”

Tillis is a member of the Senate Banking Committee, where Republicans have a 13-11 majority. He said he would oppose confirmation of any Fed nominee—including Trump’s pick to succeed Powell as chair—until the legal matter is resolved. That would leave Republicans short of the majority needed to advance nominations through the panel.

Massachusetts Sen. Elizabeth Warren, the panel’s top Democrat, said Trump was attempting to push out Powell and “install another sock puppet to complete his corrupt takeover of America’s central bank.”

Trump last month threatened a lawsuit against Powell over the renovation of two historic buildings overlooking the National Mall. “We’re thinking of bringing a suit against Powell for incompetence,” said Trump.

Trump toured the construction project last July with Powell, an event that featured the unusual display of both the president and the Fed chair in hard hats, bickering about costs and specific renovation dates of obscure historic buildings.

The White House began highlighting cost overruns and pricey construction last summer after Trump grew unhappy that Powell wasn’t moving faster to cut interest rates.

The central bank ended up lowering interest rates at its last three meetings of the year, in September, October, and December, but is poised to hold interest rates steady later this month.

Trump floated the idea of trying to dismiss Powell in his first term and again this spring, but he abandoned the idea both times after advisers suggested it might be a loser in the courts and with financial markets.

The brouhaha over the building renovations appeared to be an effort to erode the public’s trust in Powell, build a legal case to force him out, or both.

Russ Vought, director of the White House Office of Management and Budget, sent a letter to Powell in July implying that during recent testimony to the Senate, he had either made false statements to Congress about the $2.5 billion renovation or failed to comply with permitting rules around capital-area construction. Powell wrote to lawmakers explaining how his statements had been truthful.

The episode resolved itself nearly as suddenly as it escalated when Trump, during a tour of the construction site a few weeks later, appeared to play down any conflict. “Look, there’s always Monday morning quarterbacks; I don’t want to be that. I want to help them get it finished,” Trump told reporters after touring the site with Powell.

Administration officials have also said they want Powell to resign his seat as a governor after his term as chair ends this year. Powell has the option to remain on the Fed’s board until early 2028, though outgoing chairs typically don’t stay on the board after they conclude their term as chair.

Separately, the Supreme Court is set to hear arguments later this month over Trump’s effort to dismiss Fed governor Lisa Cook, who was appointed by former President Joe Biden and has regularly voted with Powell.

The Justice Department separately opened a criminal investigation into Cook last year, issuing subpoenas as part of an inquiry into whether she submitted fraudulent information on mortgage applications.

Trump sought to fire Cook from the Fed in August over alleged fraud involving her mortgage applications that was initially referred to the Justice Department by a senior White House housing official. Cook has denied wrongdoing and is challenging her removal in court—so far, with success.

In a November letter to Bondi, Cook’s lawyer accused the White House officials of selectively targeting Trump’s political enemies while ignoring similar allegations against Republican officials.

Trump Organization deepens Gulf push with $10bn in Saudi projects

Hotel and golf development mark first time US president’s family business has partnered with kingdom’s wealth fund

Donald Trump’s family business has announced $10bn in luxury developments in Saudi Arabia as it expands its footprint in the Gulf.

Real estate developer DarGlobal, which has partnered with the Trump Organization in the past, said on Sunday the latest, $7bn project would include a Trump-branded hotel and golf course as part of Diriyah, a $63bn development backed by the Saudi sovereign wealth fund.

The two businesses are also working on a $3bn Trump Plaza tower in Jeddah that will include offices, high-end apartments and town houses. The tower will form part of a larger “Manhattan” project — a nod to the president’s New York real estate background.

The announcement comes weeks after Crown Prince Mohammed bin Salman, the kingdom’s heir apparent, met Trump in the White House and agreed a series of deals in defence, AI and nuclear energy.

Saudi tourism minister Ahmed al-Khateeb on Sunday attended a groundbreaking ceremony along with Eric Trump, executive vice-president of the Trump Organization. The deal underscores “Saudi Arabia’s growing appeal as a leading destination for tourism and investment”, Khateeb said on X.

Saudi Arabia is keen to develop its tourism sector as a main pillar of a wider economic diversification programme launched by the crown prince to decrease the kingdom’s dependence on oil revenues. Other tourism developments include luxury resorts in the Red Sea and an entertainment hub to the west of Riyadh that was opened in recent weeks.

DarGlobal, the international arm of listed Saudi developer Dar Al Arkan, has licensed the Trump name for projects across the Middle East, including in Saudi Arabia, the United Arab Emirates and Oman. The company has also partnered with the Trump Organization to build a luxury Maldives resort in which they are using blockchain technology to attract investment.

The latest project will be located in Wadi Safar, part of Diriyah, the ancestral hometown of the Saudi royal family. It is the first collaboration between the Trump Organization and the Public Investment Fund, which is chaired by the crown prince. The PIF plans to turn the historic area into a tourism and hospitality hub by adding luxury real estate and a royal opera house.

Ziad El Chaar, chief executive of DarGlobal, said talks with the PIF had been under way for 18 months before the deal for the Diriyah project.

“Trump International Golf Club, Wadi Safar will redefine luxury and excellence in the region, setting a new standard that reflects the brand’s enduring commitment to quality, prestige and timeless elegance,” Trump Organization executive vice-president Eric Trump said. “We look forward to creating a destination that complements the rich heritage of the region while delivering a global standard of luxury living.”

An increase in the Trump Organization’s activities in the Gulf since Donald Trump’s return to the White House has prompted criticism from opponents that the president’s family is using ties with the oil-rich states to benefit financially from his role as president. Trump has often dismissed such concerns, arguing that his holdings are held in trust until he leaves office.

UK private equity firms sharply increase use of offshore funds

University of Glasgow researcher says trend raises transparency concerns for investors

UK private equity firms have sharply increased their use of offshore jurisdictions since Brexit, raising concerns about transparency just as the industry is pulling in more money from individual investors.

British groups set up half of their funds abroad over the past four years, up from around a quarter between 2010 and 2015, with about a third in Luxembourg, according to research from the University of Glasgow.

The country has increasingly attracted the private equity industry because of its legal and regulatory environment, a trend that private equity lawyers said had grown because of investor demand for funds that are based in the EU.

But the shift has raised concerns about transparency for investors as offshore regions often require less stringent disclosure about the identity of investors behind funds or have registries that are harder to access.

“What I see is an increasing tendency for PE [firms] to use offshore jurisdictions for registering their funds and their portfolio companies, which . . . means things are less visible to the public eye,” said Paul Lavery, a finance lecturer at the University of Glasgow who conducted the study, and a previous one with similar findings.

Lavery said the need for “transparency and availability of information” had become even more important as the groups attracted more money from retail investors.

A leading private equity lawyer said Luxembourg had been a popular destination for funds before the UK left the EU because it had clear regulations on the treatment of private funds, but “Brexit supercharged it” because funds domiciled in the EU were easier to market across the bloc.

Momentum that had built around Luxembourg meant that many international backers of private equity funds favoured it because their lawyers already understood the jurisdiction, they added.

About 18 per cent of all UK private equity funds set up over the past four years were registered in Guernsey, according to the University of Glasgow research. The island is considered as a cheaper option for smaller funds compared with Luxembourg or the UK. 

Michael Moore, chief executive of industry body the British Venture Capital and Private Equity Association, said the UK had a “world-leading transparency regime” and was the second-largest private capital hub in the world.

“But these figures underline that the UK must work hard to retain this status,’’ he added. “Other jurisdictions have been reforming their legal frameworks to attract fund formation from the UK . . . and [the] government should take steps to ensure that Britain remains a world leader.”