TheChek News Flow

Fund paid $81.6mn dividend to another group company controlled by the billionaire financier

Sir Chris Hohn’s hedge fund TCI surged 27 per cent last year as it profited from big bets on the aerospace sector, helping to solidify the British billionaire’s place as one of the world’s best-performing hedge fund managers.

TCI, which managed just under $80bn at the start of this year, made billions of dollars from bets on US advanced jet engine manufacturer GE Aerospace, French plane manufacturer Airbus and defence company and engine manufacturer Safran, according to one person familiar with the gains. All the companies outperformed. The return figure is calculated net of investor fees.

The news comes as accounts to March last year filed by TCI Fund Management Limited show that it paid an $81.6mn dividend to another company in the wider group, also controlled by the billionaire financier. Hohn typically invests much of these dividends back into the fund, according to a person familiar with the situation.

Hohn is known for his fearsome activist campaigns against companies including Airbus, Alphabet and the London Stock Exchange Group, but also for buying and holding companies that he sees as having powerful competitive advantages against rivals for several years.

TCI held a $14bn stake in GE Aerospace by the third quarter of last year, according to US regulatory filings, with the stock surging 90 per cent during the year. Safran increased by 45 per cent last year while Airbus was up more than 30 per cent.

TCI also held multibillion-dollar stakes in Microsoft, Moody’s and Visa, and these stocks were positive but performed less well.

The S&P 500 climbed 16 per cent last year while the Stoxx Europe 600, the region’s benchmark index, gained almost 17 per cent.

The accounts also showed that the group had made a $797mn charitable donation, confirming Hohn as one of the UK’s biggest donors. Hohn is the co-founder and chair of The Children’s Investment Fund Foundation, a charity that makes large donations to causes, including children’s health, climate change and sexual and reproductive rights.

Last year, the foundation stopped giving grants to US-based non-governmental organisations, saying it no longer understood the “US policy environment” governing donations. Liberal non-profits in America have been put under pressure by US President Donald Trump’s administration, with the president saying the non-governmental sector was full of “thugs and sleazebags”.

TCI declined to comment.

Drug could provide a cure for condition that affects more than 250mn people

GSK’s treatment for chronic hepatitis B delivered a positive result in two late-stage trials and could provide a cure for a condition that affects more than 250mn people.

The British drugmaker said on Wednesday that its phase 3 trials of bepirovirsen delivered a “statistically significant and clinically meaningful functional cure rate” in the more than 1,800 patients from 29 countries who participated in the two studies.

Functional cure rates, defined as when the virus can no longer be detected in patients’ blood, were significantly higher with bepirovirsen plus standard of care, compared with standard of care alone, the company said.

The current standard of care for the viral disease, which is the leading cause of liver cancer and can lead to serious liver damage, involves life-long treatment using antiviral drugs that stop virus replication.

UBS analyst Colin White said in a note he forecast that the drug would reach peak annual sales of $2bn.

The clinical trial success of bepirovirsen, which will be submitted to regulatory agencies for approval, could be a boon for GSK. Its performance has lagged peers in recent years and is searching for new blockbuster drugs to replenish its pipeline.

Many of the FTSE 100 group’s bestsellers, especially several HIV medications with the compound dolutegravir, will lose US and European exclusivity between 2028 and 2030.

Shares dipped 1 per cent in morning trading but have risen nearly 40 per cent over the past 12 months, valuing the company at almost £77bn.

GSK, which has an ambitious goal of increasing revenues from £31bn in 2024 to £40bn by 2031, received regulatory approval last year for several potential blockbuster drugs including exdensur, an asthma drug with peak annual sales potential of £3bn.

The news marks an early win for chief executive Luke Miels, who has taken over from Dame Emma Walmsley and has said he stood by the £40bn forecast.

Tony Wood, GSK’s chief scientific officer, said: “Today’s result supports our plans to progress bepirovirsen as a treatment and also continue its development as a backbone in future sequential therapies. We’re pleased by this major advance in our expanding hepatology pipeline, aimed to transform outcomes in liver disease.”

Figure would represent a significant amount of all the oil the country produces annually

President Trump said Tuesday that Venezuela’s interim authorities will give the U.S. between 30 million and 50 million barrels of sanctioned oil, with proceeds overseen by the White House to benefit both countries.

In a post on Truth Social, Trump said that he has directed Energy Secretary Chris Wright to carry out his plan for the oil to be taken by storage ships and transported to the U.S.

“This Oil will be sold at its Market Price, and that money will be controlled by me, as President of the United States of America, to ensure it is used to benefit the people of Venezuela and the United States!,” said Trump.

Trump’s post offered the most detail to date about how he intends to make good on his promise to extract oil from the country.

Venezuela’s Ministry of Information didn’t respond to requests for comment.

After the U.S. captured strongman Nicolás Maduro, Trump announced the U.S. would take control of Venezuela’s oil reserves and bring American oil companies into the country to rebuild its oil industry and infrastructure. “What we want to do is fix up the oil, fix up the country, bring the country back, and then have elections,” Trump told reporters earlier this week.

On Friday, the president is expected to meet with representatives from the three largest U.S. oil companies—Chevron, ConocoPhillips, and Exxon Mobil—as well as other domestic producers at the White House to discuss investments in Venezuela.

The announced influx of barrels would be good news for Gulf Coast refineries that are configured to run heavy crude including from Venezuela—and by extension for U.S. consumers of diesel and gasoline and other refined products, analysts said. The plants in recent years have been looking for new sources of heavy crude.

“That’s a pretty good slug of oil if it goes in the market right away,” said John Auers, managing director of refining analytics at consulting firm RBN Energy.

The value of the barrels would be between $1.5 billion and $2.5 billion based on Tuesday’s benchmark for heavy crude used on the Gulf Coast, Auers said.

The amount of oil Trump says Venezuela will give the U.S. is significant—up to 15% of all the crude Venezuela produces in a year. It would take as many as 25 of the largest oil tankers in the world to transport the oil.

Trump said the oil will be taken via ship to docks in the U.S.

The latest plan comes as Trump threatened the country’s acting president, Delcy Rodríguez, to cooperate or face consequences. “If she doesn’t do what’s right, she is going to pay a very big price, probably bigger than Maduro,” Trump said on Sunday.

Pentagon’s go-to electronic-warfare aircraft is a key tool in the military’s renewed focus in this type of conflict

Among the more than 150 U.S. warplanes that swarmed over Venezuela this past weekend was the Growler, a jet that attacks signals, not people.

The Boeing EA-18G Growler is a specialist in electronic warfare, a once neglected part of combat that has enjoyed a renaissance following its mass use in the Ukraine war. The Growler, which is flown by a Navy squadron nicknamed the “Zappers,” likely played a key role in Venezuela, where air defenses were quickly overwhelmed.

In electronic warfare, communication, radar and other signals are targeted or protected.

The plane, based on Boeing’s F/A-18F Super Hornet, is a stalwart of U.S. electronic warfare, a field that mainly withered after the Cold War, said Thomas Withington, an electronic-warfare expert at the Royal United Services Institute think tank.

“The Growler forms the mainstay of U.S. air power’s EW component and would have located Venezuelan radars, jammed them and performed a similar task with military communications,” he said, referring to electronic warfare by its initials.

This weekend the U.S. used a host of aircraft—including F-22s, F-35s, F-18s jet fighters, B1 bombers and drones—to suppress Venezuelan air defense and communications as special forces seized the country’s president, Nicolás Maduro.

While the U.S. was easily able to fly into Venezuela, this was against a less sophisticated enemy with decent but limited quantities of air defense, said Nick Cunningham, a defense analyst at Agency Partners, a research firm.

The tactics employed “would probably be less effective against a well-equipped near-peer adversary such as Russia or China,” he said.

In Venezuela, the Growler and other U.S. aircraft were able to easily work around the country’s aging, predominantly Soviet- and Russian-made air-defense systems.

Venezuela had, for instance, 12 S-300 missile-defense systems, according to the International Institute for Strategic Studies think tank. Versions of this widely used Soviet-developed system were also easily bypassed and destroyed by Israel’s air force during their assaults on Iran last year.

Venezuela also has some Chinese radar systems, though those it has shown off were older models, according to Janes, a defense-intelligence company.

Electronic warfare isn’t new, with the British Navy jamming and intercepting radio communications as far back as the start of the last century.

For the U.S., more recent conflicts in Afghanistan and the Middle East required less electronic warfare. That led to concern that the Pentagon had ignored the field.

Then came the Ukraine war, which is widely considered history’s biggest electronic-warfare conflict. Militaries have been scrambling for new capabilities since.

“EW is not as well understood by people, and it is not as visible or catchy as buying fighter planes or ships,” said Frank Kendall, who served as the U.S. Air Force secretary during the Biden administration. “But it is critically important as we have seen in Ukraine.”

In Ukraine, the mass use of drones brought opportunities to jam and spoof their signals. Russia has developed a particular expertise in the field and has also jammed U.S. equipment such as the High Mobility Artillery Rocket System, or Himars.

That can be done as simply as bombarding a drone or rocket with signals that drown out the connection to their operator or satellite guidance.

But platforms such as the Growler, first delivered in 2008, have more in their tool kits. They, for instance, can simulate multiple aircraft in an enemy’s radar by sampling its pulse and sending that back, said RUSI’s Withington.

The Growler also carries so-called anti-radiation missiles that detect and then destroy an adversary’s radar.

Almost all modern aircraft use electronic warfare, mainly to defend their own communications. The U.S. F-35 jet fighter has a particularly potent capability, mainly produced by Britain’s BAE Systems, analysts say.

But the Growler bristles with electronic-warfare equipment, much of which it carries in large pods under its wings and belly. It also has a crew of two, one of whom specializes in electronic warfare. Its price in 2021 was around $67 million.

Boeing referred questions to the U.S. Navy, which didn’t immediately reply to requests for comment.

Electronic warfare has become one of the defense industry’s most lucrative businesses. While large U.S. defense companies don’t break out sales related to electronic warfare in their results, European peers report some of their highest margins in this field.

MBDA, the European missile maker, is marketing a missile whose purpose is to scramble communications and radars. Companies sell decoys, which trail planes or ships, sometimes looking like a missile, and emit signals to confuse adversaries into targeting it instead of its mother ship.

To defend against signal jamming, militaries are starting to communicate via lasers, where able. Russia and Ukraine have gone old school and connect many of their drones to fiber-optic cables.

Artificial intelligence is presenting further opportunities for electronic warfare.

Analysts wonder, though, if the U.S. and Europe have fallen behind China, in particular. For instance, updates to the Growler’s electronic-warfare pods, which the U.S. relies on to protect its air fleets, have been delayed.

“Progress in the program has been painfully slow,” said Kendall, the former Air Force secretary.

Trump administration signals support for proposal to divvy up sanctioned Russian company’s international businesses

Chevron and private equity group Quantum Energy Partners are teaming up on a bid to buy the international assets of sanctioned Russian oil company Lukoil.

If a deal is clinched, Chevron and Quantum plan to divvy up the assets between them, valued at $22bn by Lukoil, according to people familiar with the matter.

The bid, which is spearheaded by Quantum, is for the whole portfolio of Lukoil’s international assets, including oil and gas production, refining facilities and more than 2,000 filling stations across Europe, Asia and the Middle East.

Quantum and Chevron would own and operate the assets for the long term, a promise that was likely to win favour with the Trump administration, the people said. Quantum is buying the assets in collaboration with its London-based portfolio company Artemis Energy.

The offer price of the Quantum-led bid could not immediately be established. Quantum declined to comment.

A Chevron spokesperson said the company had a diverse portfolio and continues to assess potential opportunities. “As a matter of policy, we do not comment on third-party statements, nor do we comment on commercial matters.”

The pair are the latest bidders to enter the battle for Lukoil’s non-Russian assets, which have drawn bids from Carlyle and Abu Dhabi conglomerate International Holding Company.

The auction process was kick-started in November when Swiss commodities trader Gunvor backed out of a deal with Lukoil for the assets after the Trump administration said it would block the transaction and labelled Gunvor the “Kremlin’s puppet”.

Quantum, which was founded by Texan oil tycoon Wil VanLoh, had already engaged with Trump administration officials about its bid and had argued that its proposal would cement American ownership over strategically important energy assets, the people said.

A senior US government official welcomed the Quantum-Chevron proposal.

“We are looking for a divestment that places ownership of these assets into the hands of an American owner and operator ad infinitum. We do not want a buy-and-flip situation, so this is a compelling option,” the official told the Financial Times, referring to the companies’ bid.

Chevron, which previously considered its own bid for part of Lukoil’s assets, could be interested in the Russian company’s 5 per cent stake in Kazakhstan’s Tengiz oilfield, which the US company partially owns and operates.

The US Treasury department has given a dispensation for companies to negotiate with Lukoil until January 17. Any deal would require US regulatory approval, handing President Donald Trump an effective veto.

Gunvor’s deal to buy Lukoil’s international business collapsed in November when the Treasury said it would not grant the Swiss trading house a licence to operate the asset because of its alleged ties to the Kremlin.

Gunvor, which has sought to distance itself from Russia, was co-founded by Gennady Timchenko, a close ally of Russian President Vladimir Putin who left the company 11 years ago and no longer holds a stake.

Announcement comes as scrutiny of chatbot mounts after it created sexualised images of minors

Elon Musk’s xAI said it has raised $20bn in new funding, in an upsized deal that more than doubles its valuation since last spring, despite growing concerns over illegal content generated by its artificial intelligence.

The start-up, which develops the chatbot and model Grok, initially targeted a $15bn round, at a $230bn valuation. On Tuesday, xAI announced the larger-than-anticipated round, with participation from Valor Equity Partners, Fidelity Investment Management, the Qatar Investment Authority and Abu Dhabi fund MGX.

Strategic investors include Nvidia and Cisco, whom the company said would support its computing resources. Nvidia supplies chips to xAI, which power the training and running of its AI models.

In July, xAI raised $10bn through loans and cash investments to fund construction of its Colossus data centre in Memphis, Tennessee. In June, it sold $300mn of shares in a secondary stock offering.

The announcement comes as scrutiny mounts of xAI, after its image generation feature on Grok created sexualised images of minors and adults, “undressing” them without consent. 

Earlier on Tuesday, UK technology minister Liz Kendall said in a statement that the content was “absolutely appalling” and that the company needed to deal with it “urgently”. Creating or sharing non-consensual intimate imagery or child sex abuse material, including AI-generated content, is illegal in the UK.

The company said in a statement posted to X on Saturday that it takes “action against illegal content on X, including Child Sexual Abuse Material (CSAM), by removing it, permanently suspending accounts, and working with local governments and law enforcement as necessary”.

“Anyone using or prompting Grok to make illegal content will suffer the same consequences as if they upload illegal content,” it added.

xAI acquired social media network X for $45bn in March, bringing together two Musk businesses under one umbrella, and combining data, computing power, staff and users. The company said it had more than 600mn monthly active users across both platforms. Users on X can access Grok readily in the app or through comments on posts.

xAI said it was training the next version of its large language model, Grok 5, and planned to launch new consumer and enterprise products. It is also building models to assist its planned expansion into gaming and robotics, as previously reported by the Financial Times.