TheChek News Flow

The official manufacturing purchasing managers index for June came in at 49.7

China’s manufacturing activity declined for the third straight month in June as trade frictions with the U.S. continued to weigh on the world’s second-largest economy.

The official manufacturing purchasing managers index for June–the first full month after the China-U.S. trade truce was reached in London–came in at 49.7, edging up from May’s 49.5 and matching the 49.7 tipped by a Wall Street Journal poll of economists, according to data released by the National Bureau of Statistics on Monday.

A reading above 50 suggests an expansion in manufacturing while a reading below that suggests a contraction.

Monday’s print followed a run data suggesting the Chinese economy had lost some momentum in May amid the remaining U.S. tariffs slapped on Chinese goods despite the trade detente.

Still, economists say Chinese policymakers seem satisfied with the economy’s performance so far this year.

Chinese Premier Li Qiang last week said that economic indicators continued to improve in the second quarter despite external challenges. Also, China’s central bank has also adopted a less dovish policy tone, according to Goldman Sachs’ economists in a recent report.

“We think the upcoming July Politburo meeting is unlikely to announce major stimulus and additional easing measures should be targeted (e.g., focusing on labor and property markets) rather than broad-based,” the Goldman economists said.

Other subindexes released Monday showed mild improvements. The production subindex increased to 51.0 in June from 50.7 in May. The subindex for total new orders moved back to the expansionary territory and climbed to 50.2 in June, compared with 49.8 in May, and the new export orders subindex rose to 49.7 from 47.5.

China’s nonmanufacturing PMI, which covers both service and construction activity, edged up to 50.5 in June from 50.3 in May, said the statistics bureau.

Noting the signs of improvement in June, Zichun Huang, an economist at Capital Economics remained cautious about China’s economic outlook, citing weaker export growth and a fading fiscal tailwind that is likely to slow activity later this year.

Economists say eventually Beijing will need more aggressive stimulus to secure its official annual goal for around 5% economic growth as policymakers grapple with a protracted property slump and a bleak labor market.

Trump has repeatedly urged Powell to lower the Fed’s key interest rate in order to lift growth

Public calls for lower interest rates of the kind directed by President Trump toward Federal Reserve Chair Jerome Powell are not a threat to the central bank’s independence, the Bank for International Settlements said Sunday.

The Switzerland-based BIS is owned by most of the world’s leading central banks, although not the Fed, and has long provided a forum to policymakers for sharing ideas and concerns.

Over recent decades, the BIS has advocated for giving central banks freedom to set interest rates to meet the goals mandated by legislatures, which usually include keeping the inflation rate at a specified level or within a range.

On a number of occasions, Trump has urged Powell to lower the Fed’s key interest rate in order to lift growth. Earlier this month, he called on Powell to reduce the rate to between 1% and 2% from 4.3% in order to contain the rising costs of servicing the government’s debts.

While the BIS said in an annual report that doubts have been raised about the administration’s commitment to central bank independence, it judged that comments of the kind made by Trump don’t represent a threat to the Fed’s autonomy.

“As long as society supports an institution with a mandate to preserve stability, it should not be a threat,” said Agustin Carstens, general manager of the BIS and a former governor of Mexico’s central bank.

Despite Trump’s criticisms of the Fed’s policy decisions, opinion polls suggest a majority of voters continue to back its independence in setting interest rates. A mid-April survey of 4,941 U.S. adults by YouGov found that 57% supported the Fed’s independence, while just 14% wanted to see it removed. However, 29% were undecided.

Carstens said disagreements between governments and central banks are “almost by design,” since the power to set interest rates is delegated to a central bank precisely because it will be willing to take decisions that a government would not.

“It shouldn’t necessarily surprise us that there will be from time to time tensions because what society has said is this institution should do what it deems necessary to protect the value of the currency, and oftentimes what needs to be done doesn’t match with what governments may want to see,” he said.

The BIS repeated its view that the independence of central banks is essential if they are to succeed in protecting the value of money, and warned that failure to perform that task can have serious consequences.

“We have had quite substantial episodes where monetary policy mismanagement has led to devastating effects on inflation, affecting the well being of individuals and firms, oftentimes bringing countries to a brink,” Carstens said.

In its annual report on the global economic outlook, the BIS said the prospects for growth have been weakened by the unpredictability that the Trump administration has brought to policy making, in addition to the new barriers to trade that tariffs represent.

“Beyond the policy measures themselves, the repeated cycle of announcements, adjustments and reversals has fostered an atmosphere of uncertainty and volatility, compounding the challenges for the global economy,” the BIS said.

The BIS said the fragmentation of the global economy wrought by higher tariffs would likely increase the frequency of inflation surges such as those that occurred in the wake of the Covid-19 pandemic.

“As supply chains adjust, there is the potential for significant disruptions to trade and temporary shortages of some goods,” the BIS said. “As witnessed during the pandemic, such disruptions can have significant and long-lasting ramifications for production and prices across the economy.”

Sixth Street’s Alan Waxman says his publicly traded rivals are turning private credit into a commoditized business—and he isn’t following suit

Private credit is in a golden age. The biggest firms are marching further into bank territory, raking in money from insurance companies and individual investors and setting their sights on the trillions of dollars in U.S. retirement accounts.

But one of its pioneers thinks the industry is losing track of what made it great.

Alan Waxman, CEO of investment firm Sixth Street, says publicly traded rivals such as Apollo Global Management and Blackstone have reoriented their credit businesses to take in huge sums of money from insurance companies and individual investors. That means money flows in and must be put to work quickly, whether or not the investment opportunity is ripe.

The 50-year-old Waxman, who in 2000 created one of the first private-lending businesses while at Goldman Sachs, isn’t predicting this will end with a blowup. Instead, he argues these firms are turning private credit from a bespoke type of investing with relatively high returns into a commoditized, lower-returning business.

His rivals, Waxman says, have become factories, churning out deals with little consideration of their long-term prospects.

“What does a factory do?” he asked a room full of Sixth Street investors at the firm’s annual meeting in October. “It’s, ‘I want to get as many widgets out the door as fast as possible, as cheap as possible…regardless of what the environment is.’”

Waxman’s warnings come at a sensitive time. Some institutional investors are already starting to complain private credit isn’t living up to its prior gains. And regulators are evaluating ways to make it easier for 401(k) investors to participate in private markets.

His critique is also convenient for Sixth Street, which has been late to the biggest trends fueling private credit’s growth. It was years behind Apollo’s move to manage assets for insurance companies and Sixth Street has yet to offer products aimed at individual investors, who now account for nearly a quarter of Blackstone’s assets under management.

Waxman thinks Sixth Street can withstand the tide. He regularly gets calls from bankers arguing that the $115 billion firm, one of the last big stand-alone private-credit specialists, needs to embrace the factory model to stay relevant—by selling to a bigger asset manager or going public.

He argues Sixth Street’s structure encourages collaboration, helps it attract top talent and allows it to remain flexible, putting billions of dollars to work by constantly pivoting.

Sixth Street is more than a private-credit shop. It is known for tailored financings that can consist of debt, equity or anything in between. Among its recent transactions: a loan tied to royalties to finance drug development and equity deals for real-estate businesses in the U.K. and Asia, a major franchisee for restaurant-chain Wingstop and stakes in the San Francisco Giants and Boston Celtics.

Some of its biggest wins have come through creative structures. Sixth Street more than doubled its money on a 2016 loan to Spotify ahead of its IPO, which included a piece that could be converted to equity, and a 2020 loan to Airbnb to help it weather Covid-19. It quadrupled its money with a complex equity deal to finance the creation of Asia data-center operator AirTrunk in 2017.

The firm’s publicly traded direct lending arm has returned a net 13.3% including dividends since inception, as of May, versus an average of 7.3% for public peers. It also charges higher fees than newer nontraded peers that have been created to raise money from individuals.

“There is no firm in the world that’s private and looks like us,” Waxman said.

Private-credit foundations

A former college soccer player with a full head of salt-and-pepper hair, Waxman is obsessed with risk. Reminders are scattered around Sixth Street’s San Francisco headquarters. There is a conference room named “risk unit, return unit,” after the idea that returns should be viewed in relation to their corresponding risk.

A large sculpted tiger mask hanging near the entry is called “Face the Tiger,” a mantra Waxman invokes to encourage colleagues to confront challenges head on.

Waxman started as a junior analyst at Goldman in 1998. He worked in the special situations unit, which invested the firm’s own money in areas such as corporate equity and debt, real estate and infrastructure.

Early on, he was sent to review a portfolio of loans Goldman wanted to buy. The loans, to radio and television companies, were made by a nonbank lender. Waxman noticed the lender could charge hefty interest rates making loans banks wouldn’t because it was willing to account for the value of the borrowers’ underlying assets, not just its cash flows.

“By looking at things differently than a strict bank, we were able to get comfortable with making loans to these businesses,” Waxman says. “I thought: Why can’t this be applied across other industries?”

Waxman rose to lead special situations and was just 31 when he became a Goldman partner.

Then, at the height of the financial crisis in 2008, Goldman became a bank holding company, making it eligible for emergency government loans but subjecting it to stricter regulation.

The next day Waxman decided to leave. He and his partners launched what eventually became Sixth Street, with the goal of replicating the flexibility of investing from Goldman’s balance sheet.

The Tao

Sixth Street’s flexibility relies on a $30 billion fund called Tao. Named after a term that roughly translates to “the way” in the ancient Chinese philosophy of Taoism, Tao can raise more money as needed and doesn’t need to return capital to investors over a set period. Everyone at the firm gets paid from the fees it generates.

Tao often invests alongside Sixth Street’s other funds, allowing them to compete for big deals when needed and sit out deals it thinks aren’t good enough.

In direct lending, for example, Sixth Street has remained active when rivals have retreated during periods of volatility, such as after the rapid rise in interest rates in 2022. It is now more cautious, arguing rivals with billions of dollars from individuals are rushing to put money into deals.

Co-Chief Investment Officer Josh Easterly warned in an April letter to shareholders of Sixth Street’s publicly traded lending arm that rivals would only be earning about a 5% return on equity—not much higher than what a certificate of deposit pays. Some rivals dispute his math.

Sixth Street was absent from some of the biggest direct-lending deals of the first quarter, including a $2.3 billion loan to MB2 Dental, led by KKR. But it did help finance the buyout of pharmacy chain Walgreens, a complex situation that involved lending against the company’s assets.

Waxman acknowledges Sixth Street will eventually need to find a way to approach individual investors, but he says the firm needs to do it in a way that stays true to its principles.

That is what it did in insurance, where it selectively manages assets for insurers in areas where it thinks it has an edge. In its latest big move, it struck a deal in January with Northwestern Mutual, to invest $13 billion with Sixth Street and take a stake in the management company.

As Waxman often says: “Just because you can raise the capital doesn’t mean you should.”

‘Sapiens’ Author Yuval Noah Harari on the Promise and Peril of AI

The author of ‘Sapiens’ says that for the first time in tens of thousands of years, humanity has competition. And it’s coming fast.

Does the rise of artificial intelligence mean the decline—and even end—of Homo sapiens? That’s the question we posed to author, historian and philosopher Yuval Noah Harari, who sees the potential for both enormous benefit and enormous danger from AI. He discussed the outlook with WSJ Leadership Institute contributing editor Poppy Harlow at The Wall Street Journal’s recent CEO Council Summit.

Here are edited excerpts of their conversation.

Bringing up baby

WSJ: You call artificial intelligence—or alien intelligence, as you refer to it throughout your writing—the rise of a new species that could replace Homo sapiens.

YUVAL NOAH HARARI: Yeah. For the first time, we have real competition on the planet. We have been the most intelligent species by far for tens of thousands of years, and this is how we got from being an insignificant ape in the corner of Africa to being the absolute rulers of the planet and of the ecosystem. And now we are creating something that could compete with us in the very near future.

The most important thing to know about AI is that it is not a tool, it is an agent, in the sense that it can make decisions independently of us. It can invent new ideas. It can learn and change by itself. All previous human inventions, whether the printing press or the atom bomb, are tools that empower us.

WSJ: They needed us.

HARARI: They need us because a printing press cannot write books by itself and it cannot decide which books to print. An atom bomb cannot invent the next, more powerful bomb. And an atom bomb cannot decide what to attack. An AI weapon can decide by itself which target to attack and design the next generation of weapons by itself.

WSJ: The way you talk about it in your latest book, “Nexus,” is that it is a baby, because it learns from us. And therefore, your argument is that we, especially the powerful leaders in this room, have a lot of responsibility, because how we act is how AI will be. You cannot expect to lie and cheat and have benevolent AI. Explain that.

HARARI: There is a big discussion around the world about AI alignment: We are creating these increasingly superintelligent, very powerful new agents. How do we make sure that these agents remain aligned with human goals and with the benefit of humanity, that they do what is good for us?

There is a lot of research and a lot of effort focused on the idea that if we can design these AIs in a certain way, if we can teach them certain principles, if we can code into them certain goals, then we will be safe.

But the two main problems with this approach are: First, the very definition of AI is that it can learn and change by itself. So when you design an AI, by definition, this thing is going to do all kinds of things which you cannot anticipate.

The other, even bigger, problem is that we can think about AI like a baby or a child. And you can educate a child to the best of your ability. He or she will still surprise you for better or worse. No matter how much you invest in their education, they are independent agents. They might eventually do something which will surprise you and even horrify you.

The other thing is, everybody who has any knowledge of education knows that in the education of children, it matters far less what you tell them. It matters far more what you do. If you tell your kids, “Don’t lie,” and your kids watch you lying to other people, they will copy your behavior, not your instructions.

Now if we have now this big project to educate the AIs not to lie, but the AIs are given access to the world and they watch how humans behave and they see some of the most powerful humans on the planet, including their parents, lying, the AI will copy the behavior.

Everything, everywhere

WSJ: We took a poll this morning, asking the leaders in this room how consequential they think AI has been so far in the businesses they lead. And only a small portion said significantly. Most, it was moderately or not at all. Can you speak to them as if we were sitting here 36 months from now? Is there any world in which AI doesn’t have a significant impact on their business?

HARARI: The question is one of time scale. Imagine that we are now sitting in London and the year is 1835. The first railway has been opened between Manchester and Liverpool five years ago. And we have now this conference in London in 1835 and people are saying, “You know, all this talk about railways changing the world, the Industrial Revolution, this is nonsense. We have had railways for ages. Five years. And look.”

So we now know that the Industrial Revolution and trains, they completely transformed everything. But it just took more than five years. The same is likely to happen with AI in all fields, from the obvious to the less obvious.

I think that one of the first fields we’ll see major changes in is finance, that AI is going very quickly to take over the financial system. Because finance is purely an informational realm. You don’t see these tens of thousands of self-driving vehicles yet. The problem is that for driving, you need to deal with the messy, physical world of pedestrians and holes in the road and whatever. But in finance, it’s only information in, information out. It’s much easier for an AI to master that.

And what happens to finance once AIs, for instance, start inventing new financial devices that the human brain is simply incapable of dealing with because it’s mathematically too complex?

A useless class

WSJ: Let me get back to what you’ve said about replacing jobs. You’re worried about what becomes a useless class. What do we do to make sure we, as a society, not only survive, but thrive?

HARARI: I want to emphasize that AI has enormous positive potential as well as dangerous potential. And I don’t believe in historical or in technological determinism. You can use the same technology to create completely different kinds of societies. We saw it in the 20th century—we used exactly the same technology to build communist totalitarian regimes and liberal democracies.

It’s the same with AI. We have a lot of choices about what to do with it—if we remember that for the first time, we are dealing with agents and not tools, so it makes it much more complicated. But still, most of the agency is in our hands. And the question of how we develop the technology and, even more importantly, how we deploy it, we can make a lot of choices there.

The main problem is that now the companies and countries that lead the AI revolution have been locked into an arms-race situation. So even if they know that it would be better to slow down, to invest more in safety, to be careful about this or that potential development, they are constantly afraid that if we slow down and they don’t slow down, they will take over the world.

Digital immigrants

AUDIENCE MEMBER: When we talk about AI, we’re not talking about something that is monolithic, right? This is going to be multiple plethoras of AIs manifesting themselves. When there are all of these competing AIs that are evolving fast, what does that world look like?

HARARI: That’s a very, very important point. The AI will not be one big AI. We are talking about, potentially, millions or billions of new AI agents with different characteristics and produced by different companies, different countries everywhere. And we just have no idea what the outcome will be.

We have zero experience in what happens in AI societies when millions of AIs compete with each other. This is not something you can simulate. So in a way, it’s the biggest social experiment in human history. And nobody has any idea how it will develop.

One analogy to keep in mind—we now have this immigration crisis in the U.S., in Europe, elsewhere. Lots of people are worried about immigrants. Why are people worried about immigrants? There are three main things that come to people’s mind: They will take our jobs. They come with different cultural ideas; they will change our culture. They may have political agendas; they might try to take over the country politically.

Now you can think about the AI revolution as simply a wave of immigration of millions and billions of AI immigrants that will take people’s jobs, that have very different cultural ideas, and that might try to gain some kind of political power.

And these AI immigrants, these digital immigrants, they don’t need visas. They don’t cross the sea in some rickety boat in the middle of the night. They come at the speed of light.

And I look, for instance, at far right parties in Europe. If they care about the sovereignty of their country, if they care about the economic and cultural future of their country, they should be far more worried about the digital immigrants than about the human immigrants.

Goldman Sachs Scraps Plans to Build Hotel Brand in Greece

The firm had big ambitions for three resorts with views of the Aegean Sea. It recently sold the properties, barely breaking even.

ust a few years ago, Goldman Sachs GS 0.53%increase; green up pointing triangle had ambitions to create a hotel brand in Greece that could one day expand to spots around the Mediterranean.

The Wall Street giant bought three seaside resorts in northern Greece in 2022, with plans to spruce them up and start welcoming guests as soon as this year. Tourism in the country was on a tear, and the bank saw an opportunity to snap up properties on the mainland with views of the Aegean Sea, rather than on the pricier Greek islands.

This spring, Goldman abruptly sold the three hotels, barely breaking even on the roughly €100 million (about $117 million) it had invested in the project, according to people familiar with the matter. It also pulled the plug on its plans for a hotel brand in the region, the people said.

The resorts never opened, and some employees who worked on the investment are no longer with the firm.

Greek media described the deal as a “shipwreck.”

While the investment was a small one for Goldman’s asset-management division, it was emblematic of the firm’s search for big returns and steady fees to offset its lucrative but volatile Wall Street businesses. Its goal in Greece was to use mostly client money and financing to drive up the hotels’ value, then book big profits when they were sold. All the while, Goldman would collect management fees from clients whose money was invested.

When it bought the resorts, Goldman was enticed by the country’s strengthening economy, embrace of foreign investments, and cheaper property prices compared with Western Europe. Many hotels in Greece are also family-owned and switching hands to new generations who are more open to selling.

Other firms had also invested in the country, including Blackstone’s successful bet on Hotel Investment Partners, which has a portfolio of dozens of hotels in the Mediterranean that have spread to include around 10 in Greece. Goldman decided that its own Mediterranean adventure would begin in Greece.

The firm continued to cast about for additional hotel acquisitions and explored buying the Grand Resort Lagonissi, according to people familiar with the matter. The hotel sits on an area known as the Athenian Riviera, a stretch of beaches with new luxury hotels and residences. Goldman didn’t pursue the effort.

Around last summer, Goldman President John Waldron visited Greece and met with the country’s prime minister and local bank chief executives. His message was clear: Goldman was invested in the country in a big way, both through its investment banking and asset management.

But by then, Goldman’s investment in the hotels was souring. The renovations required a gut job that would cost far more than the firm had expected.

Late and over budget

Goldman had planned to largely demolish and rebuild the hotels, located on Greece’s northern peninsula of Halkidiki, before throwing open their doors again.

The firm’s asset-management employees in London and Spain worked on the investment from the opposite ends of Europe, with a partner in Madrid in charge. The bank decided to create its own management team to oversee the renovation, rather than hire a firm experienced in the hotel sector as others had done.

Goldman lacked the connections to easily navigate on-the-ground construction hurdles. It created a hospitality platform in Greece called “Ousia,” which means substance, that would oversee the resorts and help find new hotel investments. It had around 10 employees in Athens, including several with significant experience in the hotel industry.

About a year into Goldman’s investment, delays with permits, construction and engineering started becoming a concern.

Goldman realized it would need more time and money to complete the project. The original plan had been to invest between about €150 million and €200 million. Costs for construction materials and labor increased, eating into the investment’s projected returns.

At one point, Goldman and a construction company it was working with decided to part ways.

Goldman had preliminary discussions for a local partner to help with the work. Around last fall, Goldman began exploring a sale.

The firm sold the hotels in the spring to Sani/Ikos Group, a privately held company that owns and operates hotels in Greece and Spain.

In the end, Goldman decided on a full pullout from hotel investments in the country, with the exception of its minority stake in real-estate investment company Prodea.

Goldman said it evaluates unloading investments when it is in the interest of its clients. “We actively manage all of our investments, maintaining a strong focus on operational discipline and value add,” a spokeswoman said.

The firm’s focus on investment banking and asset management in Greece is otherwise unchanged.

The new owner of the hotels announced a more than €400 million investment in the project. The properties will feature nearly 750 rooms, multiple pools, more than 30 restaurants and bars, theaters and spas.

The hotels are scheduled to open in 2029.

Business secretary Jonathan Reynolds to speak to carmaker after ‘everyone just panicked’

Lotus has reversed its plans to end car production in the UK after the government signalled it was willing to offer support to the struggling British sports car brand. 

In a statement on Saturday, Lotus, which is controlled by Chinese carmaker Geely, said it was “actively exploring strategic options” to improve the efficiency of its operations and global competitiveness. 

“Lotus Cars is continuing normal operations, and there are no plans to close the factory,” it said.

The Financial Times reported on Friday that the company was planning to stop manufacturing at its Hethel plant in Norfolk, putting 1,300 jobs at risk.

Two people with knowledge of the situation said UK government officials contacted Lotus and Geely executives shortly after the report was published. “Everyone just panicked,” said one of the people.

UK business secretary Jonathan Reynolds met Lotus management on Sunday, who reassured him that the carmaker was committed to its UK operations.

A Department for Business and Trade spokesperson said Reynolds had “also set out the government’s commitment to working with Lotus and the wider car sector to improve competitiveness and drive growth”.

Geely declined to comment.

A shutdown of the Hethel plant would have dealt a fresh blow to UK car production, following closures by Honda and Ford over the past decade.

In a bid to boost automotive and other advanced manufacturing, Prime Minister Sir Keir Starmer has promised to reduce high energy costs as part of the Labour government’s recently unveiled industrial strategy.

The government has also pledged £2.5bn in capital and research and development funding for the car industry.

On Friday, Lotus said it had paused production in the UK from mid-May to manage inventories and supply chain issues related to US tariffs after it suspended shipments of its Emira sports car to the US.

But people with knowledge of the discussions said the company had struggled to pay its suppliers in recent weeks and it was suffering from low vehicle demand and increasing inventories, which have put pressure on both its Hethel plant in the UK as well as the Geely-owned plant in Wuhan, China, which makes Lotus cars. 

“They’re facing problems that are deeper than the US tariff issue,” one person close to the company said.

Lotus did not immediately respond to an FT request for comment.

Feng Qingfeng, chief executive of US-listed Lotus Technology, which has a controlling stake in the UK business, told senior executives earlier this week to draw up a proposal to pull out of manufacturing in the UK. He also told investors that Lotus wants to localise production in the US.

Lotus has cut jobs in recent years while a number of senior executives have left, including its European chief Dan Balmer and chief commercial officer Mike Johnstone. 

In the three months to June, Lotus Technology reported an operating loss of $103mn, compared with a loss of $233mn a year earlier, while it delivered 1,274 vehicles, down 42 per cent. 

Its Hethel plant, which was established in 1966, has an annual capacity of about 10,000 cars while its Wuhan plant can produce about 150,000 vehicles.

Leo Radvinsky is asking as much as $8 billion for the platform he popularized for sex workers and others producing explicit content, even as he personally avoids the spotlight

Leo Radvinsky has a bare-bones personal website that describes him as a company builder, an angel investor and an aspiring helicopter pilot. His personal foundation website highlights his commitment to open-source software and to philanthropic giving to causes like the Memorial Sloan Kettering Cancer Center.

Buried, however, is any mention of the main source of Radvinsky’s wealth: the pornography-fueled subscription site OnlyFans that he built into an online sex powerhouse.

A Northwestern University economics graduate, he has transformed online pornography from a business based largely on ad-supported X-rated videos into a social-media service offering the alluring—and lucrative—illusion of companionship. OnlyFans now boasts more than 300 million users, many of whom pay fees for subscriptions to a creator’s page, pay-per-view videos and personalized interactions.

Its creators include sex workers but also moonlighting amateurs, pop stars and other saucy celebrities who often offer explicit content for their paying subscribers.

“OnlyFans completely changed the industry because it opened it up to the average person to be able to be a performer,” said Alana Evans, who has been in the adult-entertainment industry since 1998 and heads the Adult Performance Artists Guild union.

Yet despite being a global king of porn, it would be an understatement to say Radvinsky keeps a low profile. The 43-year-old has mastered the art of staying unseen.

He doesn’t give interviews and stays away from industry events. A single photo of him smiling with his arms crossed has circulated on the internet for years. People who have worked with Radvinsky say they are bound by nondisclosure agreements.

Through an OnlyFans spokeswoman, Radvinsky declined to comment for this article.

But Radvinsky, who was raised outside of Chicago and now lives in Florida, is making a bid to climb the ranks of the world’s richest people. Radvinsky’s parent company, which owns OnlyFans, has sounded out banks and potential buyers, asking for as much as $8 billion, people familiar with the talks said.

Radvinsky’s fortune, including the value of OnlyFans, is already estimated by Forbes to be nearly $4 billion. British corporate records show that OnlyFans is hugely profitable—Radvinsky is its sole owner and collected nearly $1.3 billion in dividends in the five years ended in March 2024.

A multibillion-dollar exit would possibly allow Radvinsky and his wife, Katie Chudnovsky, to plow more money into philanthropy. He says on his personal website that he hopes to someday sign the Giving Pledge, which would be a public commitment to donating most of his wealth to charity. In a rare public appearance, Radvinsky attended a 2024 gala for a gastrointestinal research foundation on whose board his wife has served for over a decade.

At the gala, Chudnovsky, who now chairs the foundation, spoke about a $23 million grant program for cancer research that she and her husband had helped support.

“Because of the scientists behind the research we are funding, one miracle followed another. The advances will forever change the face of cancer treatment. And Leo’s here tonight proving that science and miracles go hand in hand,” she said.

The foundation’s YouTube account removed its video of that gala shortly after The Wall Street Journal mentioned it to OnlyFans.

The site’s London-based parent company, Fenix International, was in talks earlier this year over a potential acquisition by a group led by Forest Road, a Los Angeles-based investment bank and advisory firm, according to people familiar with the talks.

It is now unclear if those talks are ongoing. Radvinsky and his team are moving forward with talks with another potential buyer described as their preferred option, one person said.

Even an $8 billion price would be a considerable discount to what other fast-growing tech companies would fetch that are even close to as profitable as OnlyFans.

All of which raises the obvious due-diligence question for any transaction of this size: Who is the emperor behind the empire?

Born in the Soviet Union, Radvinsky moved to the Chicago area when he was a child. He spent at least part of his youth not far from Chudnovsky, another childhood Jewish émigré from the Soviet Union, who was just a couple of years behind him at Northwestern.

Radvinsky saw business opportunities in the salacious side of the internet while he was still a student at Glenbrook South High School in the suburb of Glenview.

High-school classmates say Radvinsky, who played competitive chess when he was as young as 10, was a smart, sometimes abrasive teen who liked to wear a leather jacket in defiance of the Abercrombie & Fitch-inspired prep styles of the time. At school, Radvinsky’s online business was a poorly kept secret.%

That business was called Cybertania—its incorporation papers were signed by Radvinsky’s mother in 1999 when he was still a teenager. One of its first gambits was operating websites such as Ultimate Passwords, which he registered in 2000, that claimed to offer hacked passwords to porn sites.

Some of the hundreds of pornographic website names he owned, according to internet records, included names of celebrities and actresses popular at the time like Paris Hilton, Tara Reid, Britney Spears, Jessica Simpson, Shannon Elizabeth and Ben Affleck. Many of the sites promised links to various X-rated videos.

Radvinsky’s business continued to grow and he started other corporations, including a website called MyFreeCams in 2004. It was the early days of what became known as “camming,” in which models blend casual chats with sexually explicit live content that their users pay for online.

Radvinsky and Chudnovsky married in 2008, under a crystal chuppah at a glitzy Chicago-area banquet hall, according to a wedding announcement in the Chicago Tribune. Chudnovsky, a lawyer who had her own practice, has in recent years described herself in charity bios as the general counsel of an “international privately held technology firm.”

Senior executive says sector’s sales declines are cyclical and do not require it to pursue drastic remedies

Bacardi has brushed off the threat of moderating alcohol consumption and signalled that it has no plans to pursue asset disposals, despite the gloom that pervades the spirits sector.

Ignacio “Nacho” Del Valle, Bacardi’s head of Europe and Latin America and the member of the Bacardi dynasty with the most senior executive role at the business, said he did not believe the alcohol industry was in structural decline.

“Consumer trends do change but [the] data that is out there does not validate that we are adjusting [to anything] other than a cycle,” Del Valle said, referencing analyst research linking the slowdown in alcohol sales to weaker macro economic conditions.

His comments come as concerns plague the alcohol industry that moderation, health concerns, cannabis use and online socialising are driving a structural decline. Like rivals, Bermuda-based Bacardi has suffered from falling sales since a pandemic surge when consumers splashed out on high-end booze during lockdowns.

Net revenues at the privately owned group, which as well as Bacardi rum owns brands, including Martini, Grey Goose vodka, Patrón tequila and Bombay Sapphire gin, fell 3 per cent in its 2024 financial year, according to the latest available figures published by rating agency Fitch. Sales in North America, which makes up about half of group revenues, fell in the mid-to-high single digits.

Larger competitors Diageo and Pernod Ricard reported sales declines of 1.4 per cent and 1 per cent respectively in their 2024 fiscal years, while Diageo’s North America sales declined 2 per cent.

Del Valle indicated that Bacardi had no plans to offload any of its brands, unlike Diageo, which is reviewing its portfolio to identify potential disposals to lower its leverage. “I’ve now been [at Bacardi] for 29 years, and I’ve never had the conversation on selling,” Del Valle said.

“It might hurt others — not us,” he said of the pressures on the industry, reasoning that because Bacardi is privately owned it does not have to take drastic measures during downturns to appease investors.

“We know there’s a bad cycle today, but we won’t do anything wrong today to survive until tomorrow . . . ,” Del Valle said. “While others might need to report something in a way where they might take a shortcut, we will not do that.”

Diageo last month unveiled a $500mn cost-cutting programme and said it was considering major disposals, three months after scrapping its midterm growth target. This month, Rémy Cointreau abandoned its 2030 sales growth target while Jack Daniel’s maker Brown-Forman’s share price slumped 18 per cent after it reported worse than expected results.

Bacardi has accumulated substantial debt over the past two years after raising its stakes in Teeling whiskey and Ilegal mezcal, bringing its debt to earnings ratio significantly higher than its target.

Earnings before interest, tax, depreciation and amortisation were roughly $1.2bn in 2024 and are expected to rise to $1.3bn by 2026, according to Fitch’s most recent forecasts.

The company had net debt of $5.16bn as of the end of March 2024, 4.3 times its earnings, according to Fitch, compared with 3.2 times in 2022 and a long-term target of 3 times.

Del Valle said the group was not looking to make further acquisitions.

“I think we have what we need in terms of a portfolio, but we’ll always keep an eye out for innovation,” he said, adding that the company would be developing products within established categories, rather than entering new ones.

Del Valle said that while consumers were moderating their alcohol consumption, there were still opportunities for growth in “premiumisation” — in which drinkers drink less, but pricier spirits — and what he described as a shift towards daytime drinking.

The group has jumped on the spritz trend with its St Germain elderflower liqueur, used in “Hugo” spritzes, and Martini Bianco, used in vermouth spritzes, and has also entered the fast-growing ready-to-drink category with its Bacardi-and-Cola cans.

Bacardi was founded in 1862 in Santiago de Cuba by Don Facundo Bacardí Massó, who built the company’s first rum distillery. In the years leading up to Fidel Castro’s revolution, the family began moving its trademarks and production out of Cuba.

The company’s remaining assets in the country were expropriated by Castro’s government in 1960. Five years later, it established new headquarters in Bermuda, where the group is still based.

Del Valle, like longtime chair Facundo Bacardi, is a great-great grandson of the company’s founder. He is in a strong position to eventually run the group, according to analysts and people familiar with the company. The group’s chief executive is Mahesh Madhavan, who assumed the role in 2017.

He said Bacardi punched above its weight. “It’s a small company seen as a big one, because our brands do have a big global footprint,” he said. “We act fearlessly because we’re up against giants.” The company employs 8,000 people globally, compared with 30,000 at Diageo and almost 20,000 at Pernod Ricard.

Del Valle added that speaking with his older relatives about past crises the company has weathered, including the expropriation of its Cuban assets, put today’s challenges into perspective.

“Are we living in difficult times? Maybe there’s some adversity, maybe there’s some challenges out there, but we continue to grow.”