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Record Japanese M&A streak powers on with $1bn Mitsubishi salmon catch

Group agrees takeover of salmon farms from Norway’s Grieg Seafood as corporate Japan closes in on 5,000 deals this year

Mitsubishi Corporation has agreed a $1bn takeover of salmon farms from Norway’s Grieg Seafood, as corporate Japan continues on a record-breaking M&A trail and increases its influence over global food supply chains.

The deal by the trading house’s Norwegian subsidiary, Cermaq, for aquacultures in Norway and Canada, will create the world’s second-largest salmon farming group, with annual production of 280,000 tonnes by 2027 helping to meet the world’s growing demand for protein.

The transaction carries on a scorching streak of M&A involving Japanese companies, after a first-half record of 4,700 deals worth a total of Y20.9tn ($140bn), according to Tokyo-based consultancy Recof. That surpassed the entirety of last year, and just over half the deals were Japanese groups reeling in foreign competitors.

Japanese management is defying the gloom in the rest of the global M&A market as it pursues growth, with corporate governance reforms gathering momentum and putting it under pressure to put its cash hoards to work.

One M&A lawyer, who has worked closely with two of Japan’s largest food producers on recent deals, said there was still a “significant” underlying demand for more overseas acquisitions, as companies continue to adjust to the shrinking domestic market with its increasingly strained household budgets.

Some Japanese companies are holding back temporarily, said the lawyer, while they wait for more clarity on the US tariff situation, “but in principle we have clients that are raring to go and buy businesses in America and Europe”, the person said.

Japanese food companies have been quietly strengthening their grip on the supply chain, in part by leveraging a growing craving around the world for Japanese food such as sushi, katsu curry and ramen.

Mitsubishi is making a bet on the increasing popularity of salmon. It requires significantly less feed than other animal proteins, such as chicken, pork or beef, and therefore has a substantially lower carbon footprint. Its production will be lifted 40 per cent with the acquisition.

Japanese condiment groups Kikkoman and Kewpie have been building large US factories to expand their reach into western markets, while Japanese restaurant operators have been on a furious overseas expansion drive as their home market shrinks.

Another Japanese trading house, Marubeni, announced last month it was buying Bubbies, an Arizona-based mochi ice cream company, for an undisclosed sum, as it aimed to tap into the US $9bn novelty ice cream market.

Keisuke Ito, general manager of food products at Marubeni, told the Financial Times that it was already working on another “two or three acquisitions” within the next two years.

The brand made mined diamonds synonymous with love and devotion. Now the CEO decries what he calls a ‘huge con’ in lab-grown stones masquerading as precious.

De Beers chief executive Al Cook wants to save a generation of lovers and newlyweds from what he calls a “huge con” when it comes to buying diamonds.

In the process, he hopes to rescue his iconic brand—and perhaps the diamond industry as it has existed for more than a century—from an ominous decline.

London-based De Beers almost single-handedly persuaded generations of consumers that love wasn’t genuine unless it was sealed with a diamond. The stones were prized not only for their beauty but also as a miracle of nature formed over a billion years deep in the earth, and then extracted in exotic locales—often on behalf of De Beers.

Now diamonds can be made in labs that mimic the earth’s extreme pressure and temperatures, but for a fraction of the price. A decade ago, such man-made gems were novel. Today they are mainstream, and increasingly challenging the perception of diamonds as a luxury accessory.

Walmart sold its first lab-grown diamonds in 2022, but now the stones make up half of its diamond jewelry assortment.

Signet Jewelers, which says it is the world’s largest retailer of diamond jewelry, with brands that include Kay Jewelers, Zales and Jared, is partnering with De Beers to extol the virtues of natural diamonds in a new marketing campaign. But last month, Signet said it, too, has been adding more lab-grown diamonds to its fashion jewelry, which was among the factors helping to pull the company out of a prolonged sales slump.

Synthetic diamonds currently account for more than a fifth of global diamond jewelry sales, up from less than 1% in 2016, according to Paul Zimnisky, an independent analyst.

For engagement rings, the penetration is even higher. More than half the engagement rings purchased last year in the U.S. had a lab-created diamond, a 40% increase compared with 2019, according to a survey of nearly 17,000 U.S. couples by wedding planning website The Knot.

“Diamonds were always seen as expensive, a rich person’s asset,” says Matt Bick, a third-generation diamond seller with a showroom on the same London block as the De Beers headquarters. “Now everyone can wear them.”

And that is Cook’s quandary.

A geologist and former longtime oil and gas executive, Cook took the helm of the diamond-mining and jewelry giant in early 2023. Since then, the influx of lab-grown diamonds out of China, India and elsewhere has turned into a flood, crushing demand for natural stones.

Over the past two years, De Beers’s parent, mining giant Anglo American, has slashed the book value of its majority holding in the diamond unit by about 45%, or $4.5 billion.

Last year, while fending off a takeover attempt, Anglo said it would spin off De Beers through a sale or listing to focus on businesses like mining copper and iron ore, but for months found a dearth of potential buyers at prices it can stomach. That has led to preparations for Plan B, a public listing.

Anglo executives hoped to be well into the process of hiving off De Beers by now, but increasingly it looks like any deal could take until next year, Cook and others say.

With Trump’s tariffs sparking fears about an all-out trade war, De Beers may need a Plan C. The U.S. is the world’s largest diamond-jewelry consumer, with no commercial mines of its own. Threatened tariffs have already made cut and polished natural diamonds more expensive in the U.S., at a time when many consumers are already choosing the more affordable lab-grown variety.

De Beers and Anglo have recently signed nondisclosure agreements with around a dozen suitors for the diamond business, people close to the companies say. An IPO is not off the table, and Anglo executives have said privately that the company won’t rush a sale if they think waiting will get them a much better deal.

Cook says he knew taking the De Beers job would almost certainly mean helping sell the company. He didn’t know Anglo would be pressured to move so quickly.

Going all in

In one of his first big moves, Cook shuttered De Beers’s production of its own lab-grown diamond jewelry under the brand name Lightbox. Cook’s move effectively put De Beers all-in on a bet that it could reverse the multiyear drag on the prices of mined diamonds.

Manufactured diamonds are 100% carbon, with the same hardness and sparkle of the original. Nevertheless, De Beers’s future depends on consumers who believe that authenticity can’t be made in a lab.

During an interview at the company’s historic headquarters in Central London, Cook said too many mass-produced stones are masquerading as something special to justify steep markups. He argues that shoppers are cheated when similar pieces of lab-grown jewelry are for sale at wildly different prices depending on who’s selling them.

“I’m deeply worried there’s a huge con going on around lab-grown diamonds,” Cook said. “I can’t believe that’s sustainable.”

He added that the democratization of diamonds diminishes what made them special in the first place. “For as long as humans have been conscious,” he said, “we’ve prized something precious and rare.”

To sell a new generation of shoppers on the virtues of natural diamonds, Cook pushed for Anglo to sharply increase De Beers’s marketing budget to its highest in a decade. Together with Botswana, the company’s biggest diamond supplier and a minority owner, they boosted De Beers’s marketing allocation by more than 25% this year.

The effort coincides with a push by organizations such as the Natural Diamond Council to promote mined diamonds while maligning the lab-grown variety.

The nonprofit trade group called lab-grown diamonds “The Dupe” on billboards it tested in Manhattan earlier this year. They referred to mined diamonds as “For Better,” and lab-grown as “For Worse.”

“People think natural and lab-grown diamonds are the same,” said Kristina Buckley Kayel, the Natural Diamond Council’s managing director for North America. “They are not.”

De Beers helps fund the Natural Diamond Council and sits on its board, but isn’t involved in developing its marketing campaigns, a De Beers spokesman said.

The first De Beers ad campaign as part of a partnership with Signet aired in late 2024 and took a higher road. Called “Worth the Wait,” the ads show couples in various stages of courtship, interspersed with images of volcanic eruptions and lava flows. The tagline: “Just like your journey, a natural diamond is worth the wait.”

Cook also earlier this year extended a licensing deal with Botswana to ensure De Beers a steady supply past 2050, ending a nearly six-year stalemate with the African nation that produces the majority of its diamonds.

Both sides dug in as they sized up what’s at stake. Botswana, which depends heavily on diamond exports, has slashed its economic-growth forecasts as it grapples with the protracted industry slump.

Together the partners are trying to drum up demand and fighting to shake the taint of practices that marred the industry’s reputation—the trafficking in so-called blood diamonds mined in war zones, with profits used to fund insurgencies.

“We are where we are because of the value of diamonds,” says Botswana’s ambassador to the U.S., Mpho Mophuting.

When he meets with jewelers and young people, Mophuting talks about how the diamond industry has funded schools, infrastructure like fiber-optic cables and his own graduate education.

The message doesn’t always resonate with price-conscious buyers. Before she got married last year, Samantha Boselli, a 29-year-old publicist from Hooksett, N.H., chose a 3.5-carat, pear-shaped diamond for her engagement ring. It was grown in a lab.

“The size we could get for the price was unbeatable compared to a natural diamond,” Boselli says. She doesn’t care that the stone likely won’t hold its value.

“When I’m 80 and looking to pass it to a daughter or granddaughter, it will still be a sentimental and beautiful diamond,” she says. “It’s not like I’m looking to resell it.”

‘A diamond is forever’

De Beers gets its name from two Dutch-Afrikaner brothers, Diederik Arnoldus de Beer and Johannes Nicolaas de Beer, who settled in South Africa and discovered diamonds on their farm in the late 1800s.

De Beers grew to control some 90% of the world’s diamond trade. When diamond demand collapsed during the Great Depression, De Beers hired the advertising agency N.W. Ayer, which convinced Hollywood actresses to wear diamond rings. One of its copywriters in 1947 came up with the now famous tagline “A Diamond is Forever.”

Over coming decades, De Beers broadly succeeded in dictating how much should be spent on a diamond engagement ring: “Isn’t two months’ salary a small price to pay for something that lasts forever?” asked a 1980s De Beers ad.

By then, however, the company’s influence was waning as new diamond mines in Russia and elsewhere were discovered. In the early 2000s, the controversy over blood diamonds was cresting at the same time independent producers were undercutting De Beers.

Innovation in manufactured diamonds threw up new hurdles. Though General Electric has been producing lab-grown diamonds for industrial use since the 1950s, technology and consumer tastes evolved rapidly in the past decade.

Even gem experts need specialized machinery to tell the difference between quality lab-grown and mined diamonds. De Beers is now trying to draw more attention to the hard-to-see differences, by asking jewelers to shell out $9,500 for a new diamond-testing device called DiamondProof.

The device is about the size of an air fryer and designed to be displayed on jewelry-store counters. It takes just a few seconds to show color-coded results: If the stone’s image glows blue, it’s natural—a result De Beers says it can guarantee. If it glows yellow, it’s lab-grown or needs further testing.

De Beers hopes that if such a simple-looking contraption can so easily tell mined stones from lab-grown, shoppers might be convinced that there really is a meaningful difference between the two.

‘Fashion trends change’

Most luxury jewelers have opted not to sell lab-grown diamonds. “They are not rare or natural,” says Victoria Reynolds, Tiffany & Co.’s chief gemologist. “There is an overabundance of them.”

Sellers that appeal to more price-conscious consumers have less leeway.

Sales of lab-grown diamonds at Walmart, the country’s second-largest fine jewelry seller behind Signet—according to National Jeweler magazine—soared 175% in 2024 compared with the prior year.

“Our customers are looking for that type of value,” said Chris Steinmann, Walmart’s vice president of merchandising, jewelry and accessories.

The Danish retailer Pandora made a decision in 2021 to sell only lab-grown diamonds, partly due to their lower price, but also because it feels they are less harmful to the environment.

Pandora CEO Alexander Lacik said they represent a breakthrough technology that can’t be stopped through negative advertising.

“This happened with the car and horses and carriages,” he said. “The world is changing.”

Signet had been more reluctant to jump on the lab-grown bandwagon than other middle-market jewelers, which some analysts say contributed to a prolonged sales decline, plunging stock price and a large shareholder who had pushed for a sale of the company.

Signet Chief Executive J.K. Symancyk, who took the helm in November, laid out a new strategy in March that includes pushing more heavily into lab-grown diamonds for fashion jewelry like tennis bracelets, earrings and necklaces, while aiming to protect the allure of natural stones for milestone purchases like engagement rings.

Sales of fashion jewelry with lab-grown diamonds increased 60% in the most recent quarter, compared with a year ago, one factor that helped the company’s overall sales return to growth for the first time since April 2022.

He added that nearly two-thirds of Signet’s customers still prefer mined diamonds for special occasions like anniversaries and engagements. “We see natural diamonds as lasting and enduring,” Symancyk says. “Fashion trends change.”

Signet’s 20,000 sales associates were recently required to complete a digital training course that taught them how to better communicate the unique features of natural diamonds to their customers, including their origin story, scarcity and intrinsic value.

“You can’t really create the magic when you’re talking about a stone that was created in a lab,” said Christine Vassar-Raus, a regional vice president for the Signet-owned Jared chain, who demonstrated the selling techniques in a Connecticut store on a recent afternoon. “It’s just not as romantic.”

The influx of lab-grown diamonds has pushed prices down for both types of stones.

The retail price of a 1-carat lab-grown diamond has plunged 86% since the beginning of 2016, to about $745, Zimnisky estimates. The price of the same size natural diamond is down 40% over that period to $3,925. Back in 2016, there was only about a $1,000 difference between a 1-carat lab-grown and natural diamond. A natural diamond now costs about five times as much as man-made stone.

The plunging prices of lab-grown diamonds have led to buyer’s remorse for some consumers.

After buying a pair of lab-grown diamond earrings, Durée Ross has sworn off the synthetic stones. She likened them to wearing a counterfeit handbag, even though lab-grown diamonds aren’t fake.

“I just didn’t feel good about wearing them,” said the 49-year-old communications professional, who lives in Fort Lauderdale, Fla. “Natural diamonds have a better chance of holding their value. They are more of an investment piece.”

Cook, the De Beers boss, describes a future in which abundantly available lab-grown diamonds continue to lose value, pushing them closer in the consumer’s eye to cheaper knockoffs like cubic zirconia and moissanite, which have different chemical structures and are readily identified as imitations.

For those who’ve paid $2,000 for a 1-carat lab-grown diamond only to see its value collapse, Cook offered condolences: “I weep for you.”

Swiss Exports Slip as Frontrunning Fades, Strong Franc Hits Demand

Exports to the U.S. were down nearly 30%

Switzerland’s exports fell in the second quarter as tariff frontrunning reversed and a strong franc likely squeezed demand.

Exports decreased 5.3% to 70.1 billion Swiss francs ($87.53 billion) over the quarter, from 74.0 billion francs in the first quarter, Swiss finance-department figures showed Thursday. Exports to the U.S. were down nearly 30%, reversing a sharp increase the previous quarter, when firms rushed to get orders in ahead of the anticipated package of U.S. trade tariffs announced in April by President Trump.

Imports to Switzerland also declined on the quarter, widening its trade surplus a little to 13.4 billion francs.

The swing in exports between the quarters was almost entirely down to the pharmaceutical sector, the department said. That mirrors Ireland, another major European pharma hub, where drug factories saw an increase in production ahead of the April tariff announcement. Swiss pharma exports dropped close to 10% over the period, the data showed.

Watches, another key export for the Alpine nation, are meanwhile suffering from a turbulent global backdrop. Exports of Swiss watches to the U.S. slumped 18% last month, highlighting the rockiness of the two countries’ trading relationship. Watchmaker Swatch Group, which produces brands including its namesake as well as high-end timepieces like Omega and Blancpain, said Thursday that it booked at 10% drop in sales over the first six months of the year, a result of fading demand in China. Luxury-goods group Richemont this week similarly reported declining sales in its watch division in recent months.

Trump’s sweeping package of trade tariffs included duties of 31%-32% on Swiss imports, a move that drew an indignant response from the government in Bern.

“I… told President Trump that this was not fair,” Swiss President Karin Keller-Sutter said after the announcement. The two countries soon afterward entered into talks over a solution to tariffs, but have yet to announce a deal.

A downturn in exports also points to the strength of the Swiss franc, since a strong currency depresses demand for goods made in the country. Switzerland’s central bank last month lowered interest rates to 0%, the sixth cut in as many meetings, in a bid to counter gains made by the franc against the dollar. Investors tend to favor the franc as a safe haven, bolstering it in a world made less predictable by Trump’s tariffs and conflict in the Middle East.

Low-cost airline flags £25mn hit as it reports quarterly profits one-fifth higher than the same period last year

EasyJet has warned that “worsening” air traffic control delays and a rise in fuel prices will hit its full-year profits, even as it reported strong demand for travel this summer.

The low-cost airline on Thursday said it expected to take a £25mn hit from the two headwinds in its current financial year, which runs to the end of September.

The EU has warned that airline delays could be at their worst ever this summer as understaffed air traffic controllers battle strikes, wildfires and high demand.

This month, a strike by French air traffic controllers caused disruption in the skies across Europe, leading to the cancellation of hundreds of flights.

“We are extremely unhappy with the strike action by the French ATC in early July,” said Kenton Jarvis, easyJet’s chief executive.

“As well as presenting unacceptable challenges for customers and crew, [the strikes] also created unexpected and significant costs for all airlines,” said Jarvis.

EasyJet reported pre-tax profits of £286mn in the three months to the end of June, a 21 per cent year-on-year rise and in line with analyst estimates.

Passenger numbers climbed 2 per cent, and the airline said it had benefited from the timing of Easter, which this year fell in the third quarter.

The carrier was also upbeat about the prospects for the peak summer months.

It said the outlook for the rest of its financial year “remains positive”, and forecast “good profit growth” year on year.

Still, with 67 per cent of seats sold for the July to September quarter, easyJet said it remained reliant on late summer bookings.

Analysts at Bernstein said the earnings report left easyJet “broadly on track” to report record pre-tax profits of £700mn for the full year. That result would beat its previous record of £686mn in 2015.

Jain Global’s first year showcases the huge barriers to entry of starting a new multi-strategy hedge fund

Even hedge fund royalty Bobby Jain is having a hard time starting a firm to compete with the industry’s giants.

The former co-chief investment officer at Millennium Management tried to pull off the world’s largest hedge fund launch last year. He had to settle for the largest launch since 2018 with $5.3bn in commitments from investors, after falling short of the initial fundraising target of $8bn-$10bn.

A year on from the start of trading, high costs and a slow build-up mean Jain Global is at the bottom of the pack of so-called multi-managers that it is seeking to challenge.

“This is a Darwinian world,” said one investor. “It tells you how hard it is.”

Jain Global declined to comment.

Investors said the fund had gained just 2.7 per cent in the past 12 months, a figure that puts it far behind the dominant duo of Citadel and Millennium on 9.3 per cent and 9.9 per cent, respectively.

However, people close to Jain say the hedge fund is still early in its innings, performance is in line with expectations and it had been no small feat to raise as much as he did.

“The first year for us was about setting the firm up for the future. We didn’t expect them to put up results that were similar to an established firm,” said another investor. “The real race is starting for them now.”

When Jain set out on his own, he modelled his new firm on the “pod shops” that have become the industry’s dominant forces.

The combination of multiple trading strategies, star portfolio managers, tight risk management and high leverage delivered steady returns year after year — and secured Ken Griffin’s Citadel and Izzy Englander’s Millennium $66bn and $75bn under management, respectively.

However, multi-manager platforms are also incredibly expensive businesses to run, with cutting-edge infrastructure needed to support trading and risk controls, plus intense competition for talent. Millennium this year offered one trader a $100mn package to lure him from rival Balyasny.

Jain Global’s humdrum performance illustrates the height of the barriers to entry.

Other new entrants — Balyasny in the early 2000s, or ExodusPoint in 2018 — had clear specialisms and used those as a base on which to add new trading strategies over time. Jain took the opposite approach. Instead of getting off the ground slowly, it began with seven different divisions on launch day last year: fundamental equities; equity arbitrage; commodities; computer-driven systematic; Asia-Pacific; credit; and macro and interest rates.

It was an ambitious and distinctive pitch, but it also came at a time when upstart firms across the industry were having difficulty fundraising, which brought its own challenges.

While Jain secured investor commitments of $5.3bn, the hedge fund did not have that full sum available to trade from the start. Instead, the firm has a drawdown capital structure, similar to that of a private equity firm. This means that it has called capital from investors in stages: one consequence of a competitive environment that handed early investors bargaining power.

The hedge fund also sweetened terms and slashed performance fees for investors willing to write big cheques. Some of its largest commitments came from the likes of sovereign wealth fund Abu Dhabi Investment Authority and a big US university endowment.

At the same time, Jain had to secure the talent necessary to run the firm at full capacity while near two-year, non-compete agreements have meant some new recruits have yet to begin trading, according to people familiar with the firm.

“The firm’s running the cost base of a $5bn firm but the capital deployment is about half that,” said one person close to the firm’s strategy. (The firm is now closer to 75 per cent deployment). “You have all the drag without the performance benefits.”

Other teething problems have hit. The firm has suffered a handful of departures in recent months. Paul Jefferys — who previously worked at Citadel and was responsible for risk rebalancing among other things at Jain — left at the end of June to pursue a career in artificial intelligence, according to two people familiar with the matter.

Chief technology officer Matt Croy and a team focused on event-driven strategies led by portfolio manager Josh Klaff have also left, they added. However, the departures are a small proportion of the overall firm’s ranks, which has grown to around 380 employees.

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It also does not yet have the culture it wants, with two people familiar with the firm describing it as more akin to that of a bank. The seven different businesses have largely operated independently, according to two people close to the business, in large part because they have been focusing on deploying their own capital and making a profit.

But the firm has some breathing room. It has continued to recruit new portfolio managers, including credit specialists Niall Playfair from ExodusPoint and Herbert Filho from Morgan Stanley, and equity arbitrage traders Kevin Salmon from Bank of America and Michael Wong from Mountain Creek.

Its performance has been improving. Since the start of 2025, it has returned 2.2 per cent, according to two investors — right around the returns of Citadel and Millennium — despite not deploying all of its capital and although its traders are still to reach full velocity.

ExodusPoint, the last big launch with more than $8bn in 2018, took years to perform. It trailed its biggest rivals Millennium and Citadel until 2024, but over the past year appears to have finally hit its stride. In the past 12 months, it has returned 18.1 per cent. Balyasny, which sits between ExodusPoint and Millennium and Citadel in terms of size, returned 15.6 per cent in that time.

“Obviously, everyone wants to hit the lights out year one,” said one person familiar with Jain Global’s performance so far. “But given how Bobby structured everything, he never expected to be much further along than he was at the end of June.”

Jain has also structured its terms in a way that gives an element of stability to the business. Investors can only pull their money over the course of two years after an initial lock-up period, according to two people familiar with the terms.

That is not nearly as long as Citadel and Millennium which insist on four and five years, respectively. However, it is still much longer than most hedge funds which tend to offer monthly, quarterly or at most annual redemptions.

Investors keen to access the steady, through-the-cycle returns that the multi-managers have historically offered also have limited options. Both Citadel and Millennium are in large part closed to new investors, a restriction that may help second-tier firms raise new money.

Jain received the last tranche of the original capital commitments this month, heralding the end of the beginning for the new multi-manager.

“There has to be a ‘grace period’ to allow for scale and getting their feet under them,” said one big hedge fund investor. “The issue with Jain is perhaps just how big it is already and the expectations.”

Politicians, activists and diplomats accuse Ukraine’s leader of favouring loyalists and using wartime powers against critics

Anti-corruption raids on prominent Ukrainian figures and moves to favour loyalists in senior positions have led to accusations that President Volodymyr Zelenskyy’s government is sliding into authoritarianism.

Zelenskyy and his top aides face allegations from politicians, activists and diplomats that they are using extraordinary powers granted under martial law to sideline critics, muzzle civil society leaders and consolidate control.

The outcry has grown since masked, heavily armed officers from Ukraine’s State Bureau of Investigation (SBI) forced their way into the home of prominent anti-corruption campaigner Vitaliy Shabunin in Kharkiv last Friday, seizing phones, laptops and tablets.

Around the same time, SBI investigators and armed agents raided the home of former infrastructure minister Oleksandr Kubrakov in Kyiv, taking his mobile and other devices. Authorities said the searches were connected to corruption investigations.

Shabunin and Kubrakov labelled the raids as politically motivated, adding that the SBI had presented no court-issued warrants and would not allow time for their lawyers to be present for the searches.

Shabunin told the Financial Times: “Zelenskyy is using my case to send a message to two groups that could pose a threat to him. The message is this: if I can go after Shabunin publicly — under the scrutiny of the media and despite public support — then I can go after any one of you.”

“The first group are journalists or activists exposing corruption,” he added. “The second group is military personnel. Because the charges against me relate to my military service.”

Political allies and even detractors of Shabunin and Kubrakov, along with much of Ukraine’s civil society, condemned the raids and warned they appear to be part of a campaign by Zelenskyy’s office against critics.

“This is a straight-up, Russian-style scenario of dividing society, which could lead to protests in the streets,” said MP Oleksandra Ustinova, chair of the Ukrainian parliament’s commission on arms control and an adviser to the defence minister.

The raids followed sanctions against several prominent politicians, including former president Petro Poroshenko, who lost a re-election campaign to Zelenskyy in 2019 and has been a staunch critic since.

Earlier this month, Zelenskyy’s cabinet opted not to appoint Oleksandr Tsyvinsky, a detective with the National Anti-Corruption Bureau (Nabu), to lead the Economic Security Bureau, which investigates economic crimes. Tsyvinsky had been independently selected, but the cabinet claimed he was “not suitable”.

Anastasia Radina, an MP from Zelenskyy’s Servant of the People party and head of parliament’s anti-corruption committee, said the government had “no authority” to reject Tsyvinsky and the move did “not comply with the law”.

Also this month, the president nominated first deputy prime minister Yulia Svyrydenko to lead his cabinet, replacing long-serving premier Denys Shmyhal. Svyrydenko is considered a close ally of Andriy Yermak, Zelenskyy’s chief of staff.

The shift comes at a precarious time for Ukraine, which is trying to fight off an escalating Russian air and ground offensive, shore up US military support and reboot its government.

Ukrainian activists, independent media and western officials in Kyiv have warned that what began as a defence of sovereignty risks sliding into a crusade to reshape the state in the ruling circle’s image. They say this threatens to undermine progress on reform since Ukraine’s 2014 democratic revolution.

Zelenskyy’s office declined to comment.

Shabunin and Kubrakov, whose cases are not directly connected, have both vehemently denied the charges against them.

The case of Shabunin, a co-founder and head of the board of the Kyiv-based Anti-Corruption Action Centre (AntAC), is focused on accusations of draft evasion and fraud. The SBI accused him of dodging the draft and misusing military funds, crimes punishable by up to 10 years in prison.

Shabunin’s lawyer, Olena Shcherban, said the case was built on a distortion of his military record. She maintained the investigation was illegal and designed to smear an activist who has exposed corruption in the government. 

After Russia’s full-scale invasion in February 2022, Shabunin volunteered for the Territorial Defence Forces. From September 2022 to February 2023 he was seconded to the National Agency for Corruption Prevention. AntAC said his deployment was formally approved and fully legal.

Shcherban maintains Shabunin’s pay matched government guidelines for mobilised troops and that he never received combat bonuses. She condemned the seizure of electronics belonging to his wife and children, calling the raid a coercive and extrajudicial act.

“These weren’t searches,” said Daria Kaleniuk, executive director of AntAC. “They were intimidation tactics. This wasn’t about justice. It was about pressure.”

Shabunin and his supporters believe the move is retribution for AntAC’s investigations into high-level corruption and its criticism of Zelenskyy’s cabinet after it rejected Tsyvinsky’s appointment at the ESB.

A longtime anti-corruption campaigner, Shabunin has been a thorn in the side of several administrations. Some in Zelenskyy’s office have accused AntAC of being “grant eaters”, a term used to smear non-profit groups that accept funding from western governments.

The case against Shabunin ignited outrage across Ukraine’s pro-reform community. Leading independent media published scathing editorials.

“Taking advantage of the war, Zelenskyy is making his first, yet confident, steps towards corrupt authoritarianism,” wrote the editorial board of Ukrainian Truth, Ukraine’s most-read online news outlet.

“A crackdown on the country’s most famous anti-corruption crusader can’t be happening without at least the silent approval from President Zelenskyy, if not active permission,” the English-language Kyiv Independent said.

The president’s top political rivals followed suit. Kyiv’s mayor Vitali Klitschko warned that “under the guise of war, the authorities persecute those deemed inconvenient: political opponents, local governments, experts, journalists and activists”.

Kubrakov’s case centres on allegations that he helped a Ukrainian lawmaker embezzle about $350,000 in a scheme to purchase fertilisers in Belarus. He said he has “absolutely no connection” with the lawmaker and was fully co-operating with law enforcement.

A person close to Kubrakov said they believed the searches of his home amounted to “revenge” for a criminal corruption probe opened this month into a close Zelenskyy ally, deputy prime minister Oleksiy Chernyshov.

Investigators believe Kubrakov may have blown the whistle on Chernyshov, which the former has denied. Chernyshov has denied accusations of taking part in a $24mn land fraud.

Shabunin also cited the case as a reason for the authorities going after him. “Zelenskyy feels vulnerable. We blocked their top-priority draft law — an amnesty for corruption-related crimes committed by arms suppliers,” he said. “And Nabu issued a notice of suspicion to deputy prime minister Chernyshov, who belongs to Zelenskyy’s inner circle.”

At the same time, the government reshuffle, which began on Wednesday, has prompted critics to accuse the administration of concentrating power in the hands of a few.

“This is revenge,” Kaleniuk of AntAC said. “They’re using the mobilisation law and wartime secrecy to crush critics, assuming the west is too distracted to notice.”

The moves also come as relations between Zelenskyy and US President Donald Trump appear back on track after a dispute in the Oval Office in February and a temporary halt to US military assistance and intelligence sharing.

Trump recently announced he would sell arms to Nato countries which would pass them to Ukraine. But the US leader has abruptly changed his position on Ukraine and Russia before, and few in Kyiv believe he has pivoted to their side for good.

G7 ambassadors have previously publicly warned Zelenskyy’s administration over governance. But this time, the ambassadors in Kyiv have maintained a public silence, including about the raids on Shabunin and Kubrakov.

US ambassador Bridget Brink resigned in protest against Trump’s policies in April this year. An interim envoy has split time between Kyiv and her permanent post in Cyprus.

“It’s really difficult to be critical of Ukraine” when it is under relentless Russian attack, one ambassador said. Others noted the delicate balance of being critical while also showing support as the war-torn country relies on billions of dollars of western financial and military aid.

A western diplomat in Kyiv who has worked closely with Ukraine’s civil society said the cases of Shabunin and Kubrakov “aren’t isolated events”. “They fit a pattern: critics are being pushed aside, loyalists are shielded.”

“There’s a sense inside Bankova [Ukraine’s presidential office] that the west and especially the US has shifted its focus,” the diplomat said. “That rule of law and good governance no longer matter as much.”

Ukraine’s commitment to democratic reform has been central to securing western backing. But with US political attention turning inward and military aid becoming more transactional, some officials in Kyiv appear willing to test the limits.

Kaleniuk said: “If the institutions meant to enforce checks and balances are turned into political tools, Ukraine risks losing the democratic core it fought to build after 2014.”

The (near) impossible task of starting a multi-strat fund

In the world of hedge funds, Bobby Jain is near royalty. 

Jain first made his name as one of the best-connected bankers at Credit Suisse, and most recently worked as the co-chief investment officer of Millennium Management besides Izzy Englander.

So when Jain set out to launch a new multi-strategy hedge fund last year, he was well placed to succeed.

Even at a tough time for fundraising, Jain Global was able to pull in $5.3bn in the biggest hedge fund launch since 2018 (though well short of an initial target of $8bn-$10bn).

One year on though, Jain’s results show just how hard it is to launch a rival to hedge fund giants such as Millennium and Citadel, DD’s Amelia Pollard and the FT’s Costas Mourselas report.

The fund has gained just 2.7 per cent in the past 12 months. That puts it behind the dominant duo of Citadel and Millennium on 9.3 per cent and 9.9 per cent, respectively. 

But since the start of the year, it’s done better, raking in as much as Citadel with 2.2 per cent and falling just slightly behind Millennium. 

Jain gave himself an uphill climb by launching with seven strategies on day one.

Multi-manager platforms are extremely expensive businesses to run: you need cutting-edge infrastructure to support trading and risk controls, plus there’s intense competition for talent. 

Even when Jain found the right portfolio managers, they were sometimes locked up in two-year non-compete agreements, keeping them on the sidelines for the firm’s first months of trading.

Drawing and investing all of its $5bn also took a year, which burned a hole in Jain’s pocket. 

It bore the costs of a $5bn firm, without having invested all of its capital. “You have all the drag without the performance benefits,” said one person close to the firm’s strategy.

Investors don’t seem concerned. “The first year for us was about setting the firm up for the future,” said one. 

But ultimately, returns are everything in hedge fund land, and the investor added that those figures would soon matter. 

“The real race is starting for them now.”