Tuesday, August 01, 2023

Bukharin and the Bolshevik Revolution

By Harrison B. Salisbury

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Years later, long after he was dead, “Bukharin's fox” was still racing around the Kremlin, which was empty and desolate by that time, and playing hide and seek in the Tainitsky Garden
 — Svetlana Alliluyeva, “Twenty Letters to a Friend.”

It was Bukharin's fox (he was a man inordinately fond of pets—hedgehogs, garter snakes, a crippled hawk and the famous fox) that haunted the Kremlin for years after Nikolai Bukharin was shot in March, 1938, following the greatest of Stalin's purge trials. But it is Bukharin's ghost, the indelible memory of his post‐Marxian philosophy and his remarkable prevision of the Nazi‐Soviet rapprochement and the inevitable deterioration of Stalin's Russia into proto‐Fascism, which remains to haunt the Communist world.

Nikolai Bukharin was Lenin's most brilliant disciple. He was more than that. He was in Lenin's last years almost his foster‐son, both in a personal sense and a political sense. It was of him that Lenin wrote in his famous Last Testament:

“Bukharin is not only the party's most valuable and greatest theoretician but he is also rightfully considered the favorite of the whole party.” Then Lenin added in a clear reflection of some recent disputes with Bukharin; “But his theoretical views can only with very great doubt be regarded as fully Marxist for there is something scholastic in them (he never studied and, I think, never fully understood dialectics).”

If his name has not come down to the present day with anything like the luster and excitement it evoked in the 1920's and 1930's the blame can be placed upon what Trotsky so precisely called “The Stalinist School of Falsification.” Bukharin's name was second only to Trotsky's when Lenin died in January, 1924. Now it glows dimly in the dusty polemics of Marxist splinters and in the occasional paragraph in the turgid prose issuing from the bowels of the MarxEngels‐Lenin Institute in Moscow.

Stephen Cohen's full‐scale study of Bukhaiin is the first major study of this remarkable associate of Lenin. As such it constitutes a milestone in Soviet studies, the by‐product both of increased academic sophistication in the use of Soviet materials and also of the very substantial increase in basic information which has become available in the 20 years since Stalin's death. Like the study of Stalin by Cohen's Princeton colleague, Robert C. Tucker, it is testimony to the maturity and mastery of Ameristudies in the Soviet field.

Cohen's industrious and thoughtful scholarship reveals that Bukharin tells us more about the present‐day Soviet Union than one might imagine. In his almost forgotten works written during and just after World War I (“Imperialism and World Economy,” “The Economics of the Transition Period,” and others) he drew a frightening picture of “militaristic state capitalism” that could serve as a blueprint of the Soviet state as it came to be under Stalin and his successors. Bukharin called it “the present‐day monster, the modem Leviathan,” a draconian proto‐Fascist state run by a dictatorial oligarchy which in Cohen's words, “mercilessly crushes all resistance.”

In this state, Bukharin said, “Centralization becomes the centralization of the barrack; among the elites the vilest militarism Inevitably intensifies as does the brutal regimentation and bloody repression of the proletariat.” Bukharin, as Cohen notes, was speaking of what he perceived as the emergence of “state capitalism” in the capitalist world. What he described fitted two states of the future—Hitler's Germany and Stalin's Russia.

Bukharin and Stalin clashed on two critical points concerning Germany. First, over Bukharin's opposition, through the Third International Stalin compelled the German Communists to break with the Social Democrats, thus insuring Hitler's rise to power. Then, with Hitler's advent —and this has nowhere been brought out more clearly than by Mr. Cohen —I3ukharin fought to the end against a policy of collaboration or detente with the Nazis, whereas Stalin as early as 1935 and 1936 had begun to lay the ground lines for the notorious Nazi‐Soviet pact.

This is not to suggest—and Mr. Cohen makes this clear—that Bukharin was a spotless hem. He was not. By collaborating wholeheartedly with Stalin until 1928 (despite some twistg and turns), he made possible Stalin's victories over all other rivals and placed himself in a position in which Stalin could cut hap down with comparative ease. Since Bukharin had supported repressive measures against many others, he was on shaky ground in opposing these tactics against himself. Like most of the old Bolsheviks, he helped to dig his own grave.

But unlike some old Bolsheviks, Bukharin perceived the abyss long before he was fi rally shoved into it. He was a brilliant writer and polemicist. For many years he was editor of Pravda and later the editor of Izvestia. It was in those pages that he fought Stalin's policies, first in open argument and ultimately in that cryptic code language the Communists call Aesopian—a kind of dauble‐talk.

Bukharin had no superior at this kind of trick. For example, at a time when Stalin's forced collectivization had spread famine through the countryside, Bukharin wrote: “What do the popes do? Do they not drive the Christiansi impoverished by papal plundering, to starvation —do they not unceasingly fleece their flock and cut into their flesh while shearing them?” The analogy was obvious to the alert Russian reader. (The Russian word for peasant is krestyanin.) Bukharin played this game to the end—to his appearance at the fateful purge trial of February‐March, 1938.

Mr. Cohen demonstrates rather conclusively that Bukharin did not testify as did his prototype, Rubashov, in Arthur Koestler's “Darkness at Noon” as a last service to the party.” His testimony almost certainly was compelled in his effort to save the lives of his young wife and son.

Having decided to testify, Bukharin then sought by means of Aesopian language to turn the trial into an “anti‐trial” in which he would place Stalin under indictment. This maneuver was only partially successful. It was clearly understood in a brilliant analysis written for the State Department at the time by George Kennan. A few of the Western correspondents present suspected what was going on, though the tactic was too subtle for United States Ambassador Joseph Davies and most of the world. They heard Bukharin's plea of guilty but did not penetrate the meaning of his brilliant duel with the prosecutor, Andrei Vishinsky.

On re ‐ reading the stenographic report of the BukharinVishinsky dialogue one can feel the tensions, the nearness to total revelation of the whole macabre Stalinist appamtus. But, of course, that reading is undertaken against a backdrop of more than 30 years' exposure of Stalin's lies, plots and crimes.

Yet there is a grim lesson in Bukharin's words and Bukharin's fate. Years have passed. The Old Bolsheviks are dead. Stalin is dead. Vishinsky is dead. Yagoda, Yezhov and Beria are gone. Even pedantic precise little Judge Ulrich who presided over all the trials and then primly retired to his second‐floor suite at the Metropole has died. But the system is not dead. Brezhnev is not Stalin. Nor is Solzhenitsyn Bukharin. Yet today the same deadly minuet is being played out in post‐Stalin Russia, in that vast and tragic country where, as Bukharin once put it, “Three ethical norms dominate everything: devotion to the ‘nation’ or to the ‘state,’ ‘loyalty to the Leader’ and the spirit.

Stephen F. Cohen has analyzed Bukharin's role witt brilliance and dogged determination. One must read this work to realize the extent to which Bukharin the man has been obliterated by the operation of the Soviet “memory hole” and the extermination of almost all those who knew him. Little remains but the enduring body of Bukharin's works, but these cast a lurid light over the Soviet regime which has emerged since the death of Stalin. ■


The Ideas of Nikolai Bukharin

OUP
A. Kemp-Welch (ed.)
Published: 25 June 1992

Abstract

Nikolai Bukharin was a pioneer and founder member of Soviet Communism. An Old Bolshevik and a close comrade of Lenin, he was shot by Stalin, but eventually reinstated, posthumously, under Gorbachev. This collection of chapters provides is a systematic study of his ideas. The book analyses three major areas of his thought: economics and the peasantry, politics and international relations, and culture and science, and examines his influence both on his contemporaries and on subsequent thinkers. The introduction establishes the context for this discussion, and also provides a historical evaluation of Bukharin's role in relation to the emergence of Stalinism, the phenomenon that finally removed him from the political stage.

Contributors include Anna diBiagio, John Biggart, V. P. Danilov, Peter Ferdinand, Neil Harding, A. Kemp-Welch, Robert Lewis, and Alec Nove.


"Unite the Left": Contextualizing Bukharin's ABC of Communism and Berkman's ABC of Anarchism (PDF)

David Hayter
 Virginia Commonwealth University
THESIS
2021


Abstract

In 1919, Nikolai Bukharin, the leading theoretician of the Bolshevik Party, published a
manual entitled The ABC of Communism meant to put the governing ideology of the newly formed Soviet State into eminently readable terms. Alexander Berkman, a Russian Anarchist who strongly supported the October Revolution, became disillusioned with the new regime in 1921 and left the country. He later published his own tract entitled The ABC of Anarchism.

This thesis pits these two theoretical works against each other as historical documents
embodying the nature of leftist polemics that has characterized the movement since the
dissolution of the First International. Both Bukharin’s and Berkman’s books engage in
polemical self-definition by means of defining the other. By emphasizing Bukharin’s contributions to Bolshevism, this paper rescues the nature of the Bolshevik Party as a group of thinkers with wide-ranging beliefs in contrast to the historiographical trends that continue to emphasize Lenin as the only important figure in the party. I translate and analyze under-utilized articles that Bukharin published in New York from 1916-1917, and in Moscow in 1917 before the Revolution. In looking at Berkman’s critiques of Bolshevism in practice, the historiography of the Russian Revolution is enriched with analyses of the Party from the left, where it usually emphasizes criticism from the right. No major historiography exists on Berkman, and thus I typify his thought by reconciling his letters with his published works.

The tension in both Bukharin and Berkman in matching theory and practice is also a major component of this work and has its roots in the original splits of the Russian narodnik movement on the need for a vanguard
Beijing has invested $25.4B in Pakistan over the last decade, Chinese vice premier says

IMPERIALI$M HIGHEST STAGE OF CAPITALI$M


MUNIR AHMED
Mon, July 31, 2023 

In this handout photo released by Pakistan Prime Minister's Office, Pakistan's Prime Minister Shehbaz Sharif, left, greets Chinese Vice Premier He Lifeng, in the Prime Minister house in Islamabad, Pakistan, Monday, July 31, 2023. 


ISLAMABAD (AP) — China has invested $25.4 billion in Pakistan over the past decade for projects ranging from roads to power plants, China's vice premier said Monday, as the two countries celebrated the 10th anniversary of the so-called Belt and Road Initiative.

The initiative, also called the China-Pakistan Economic Corridor program, is China's global endeavor to reconstitute the ancient Silk Road trade routes and link China to all corners of Asia.

In Pakistan, the CPEC has been billed as an opportunity to bring new prosperity to the South Asian nation. Since 2013, thousands of Chinese construction workers and engineers have been working in this impoverished Islamic nation as part of Chinese President Xi Jinping’s initiative.

However, work on some projects has since slowed down or been briefly suspended for multiple reasons, including a 2021 militant attack in which 13 Chinese workers were killed by a suicide bomber targeting a bus carrying them in the northwest.

In his televised remarks, Chinese Vice Premier He Lefing said Pakistan’s southwestern town of Gwadar was once just a fishing town but because of the construction of a deep-water port there by China it has become a city and hub for regional connections.

He said because of the completion of several CPEC-related projects, Pakistanis were now facing fewer power outages and hoped that Pakistanis “will create a better future with their own hands” in the years to come.

His comments came days after China rolled over a $2.4 billion loan for Pakistan in a move aimed at helping the country overcome a serious economic crisis. China recently played a key role in helping Pakistan avoid a default on a debt payment.

Loans from Beijing to Pakistan have continued pouring in since December, when the International Monetary Fund delayed the revival of a bailout for Islamabad until June, when a breakthrough came following talks between the International Monetary Fund and Pakistan Prime Minister Shehbaz Sharif.

The IMF deposited the first installment of $1.2 billion in Pakistan’s central bank earlier this month.

On Monday, Sharif, in the presence of the Chinese vice premier at a gathering, said he wouldn't forget the recent Chinese financial help, which came at a very crucial time. Since coming to power in April 2022, Sharif has blamed alleged corruption under former Prime Minister Imran Khan for Pakistan’s economic downturn.


He said Pakistan will “emulate the Chinese model” of hard work to overcome one of the worst economic crises his country has faced in recent months. Sharif also said he wanted to see an end to relying on foreign loans.

“We have to move away from these borrowed loans and handouts, and have to stand on our feet to show to the world that our people are great, energetic, and capable of facing difficult challenges,” he said.


Uber Falls as Focus Shifts From First Profit to Slow Growth

Jackie Davalos
Tue, August 1, 2023 

(Bloomberg) -- Uber Technologies Inc. reported its first-ever operating profit, but the shares slid as Wall Street questioned whether the company can maintain the pace of growth in its ride-hailing and delivery business.

Uber posted a second-quarter operating profit according to generally accepted accounting principles of $326 million and free-cash-flow of $1.14 billion. Total revenue jumped 14% to $9.2 billion during the period, narrowly missing the $9.3 billion analysts were expecting. It was the slowest rate of growth since the first quarter of 2021.

The shares, which had doubled this year, dropped 5.1% to $46.97 in New York Tuesday morning.

“The market doesn’t believe Uber can keep top-line growth at these levels,” said Bloomberg Intelligence analyst Mandeep Singh.

The results have raised the bar for Uber going forward. Uber’s business has remained largely unscathed from elevated inflation rates as customers are still willing to pay a premium for the convenience of hailing a ride and getting food delivered to their door. Trips in the US and Canada have recovered to pre-pandemic levels, while delivery demand hit an all-time high, despite increased costs for food.

After struggling with a driver shortage that caused fares and wait times to increase, Uber said the number of active drivers were up 33% in the second quarter compared with last year. The number of trips taken increased 26% from a year earlier to a record high.


Uber has focused on adding new features and products to the app, including a teen rides program, the ability to book group and guest rides, video gift messaging and a boat service. The company has also expanded advertising on the app and said it has been disciplined in cost management “across the board.” The company has avoided the widespread layoffs that have afflicted many other tech companies in recent months, though it has made limited cuts in its freight unit and in human resources. Uber was forced to undertake a major downsizing in 2020, when it dismissed about a quarter of its workforce at the height of the pandemic.

The operating profit, the company’s first since its founding in 2009, helped push Uber to a surprising gain in net income in the quarter. Uber has previously reported a quarterly net profit on occasion but it has always been fueled largely from investment gains, as it was again in the second quarter. In the three months ended June 30, Uber generated net income of $394 million, far surpassing the loss of $49.2 million analysts were expecting.

Uber projected gross bookings of $34 billion to $35 billion in the current quarter and adjusted earnings before interest, tax, depreciation and amortization of $975 million to $1 billion, both beating analysts’ forecasts.

“These milestones were achieved through a combination of disciplined execution, record audience, and strong engagement,” Chief Executive Officer Dara Khosrowshahi said in prepared remarks. He added that the company was “well-positioned to sustain strong, incremental profit generation.”

The company also announced that Chief Financial Officer Nelson Chai is stepping down effective Jan. 5, marking one of the most high-profile departures since the company went public in 2019. A search for his replacement is underway.

“When I joined the company in 2018, Dara asked me to lead the financial transformation of the company,” Chai said in a statement. “As you can see from our Q2 results, that transformation has occurred. I am very proud of the great work we have all accomplished and thank Dara for his partnership.”

San Francisco-based Uber shares have diverged sharply from Lyft Inc., which has struggled to fully recover from the effects of Covid-19. Unlike Uber, Lyft only operates in North America and doesn’t have a food-delivery unit. Earlier this year, Uber’s crosstown rival installed a new chief executive officer and lowered prices to stem market share losses to Uber. Uber accounted for 74% of the US consumer ride-share sales at the end of June, while Lyft had 26%, according to Bloomberg Second Measure. Lyft shares slid less than 1% in premarket trading. The company is scheduled to report results next week.


In a conference call with analysts, Khosrowshahi said that Ubers fares during the quarter were “comparable” to Lyft’s. The two are in a “constructive” marketplace, Khosrowshahi said, adding that Lyft is “a tough competitor who now is competing effectively. We think the US is going to be a two-player market for some periods to come.”

When the pandemic crushed demand for rides, Uber’s decision to focus on Uber Eats helped it gain a foothold in the meal delivery sector which has continued to grow, even as indoor dining has resumed. Uber Eats generated $3.06 billion in revenue, slightly below Wall Street’s estimates, but better-than-expected adjusted Ebitda of $329 million as the unit benefitted from advertising. Customers seem to have been undeterred by higher prices for food, with delivery frequency of four monthly orders per eater, up 8% from a year earlier.

Uber generated $33.6 billion in gross bookings, which include ride hailing, food delivery and freight. That was up 16% from a year earlier and beat the $33.5 billion Wall Street had forecast.

Uber’s freight unit dragged on the company’s overall results. The division, which accounts for less than a quarter of total revenue, saw bookings and sales tumble 30% in the quarter. Uber said the unit is pressured by “category-wide headwinds,” with spot rates seasonally weak, a trend it expects to continue in the near term.

(Updates shares in third paragraph. A previous version of this story corrected a typo on Uber name in first paragraph.)

Most Read from Bloomberg Businessweek
FORDISM IS GLOBALIZATION
Exclusive-Foxconn EV venture targets India, Thailand for new small car

Sarah Wu
Mon, July 31, 2023

 MIH CEO Jack Cheng poses for a photo at the Foxconn's EV development platform MIH demo day, in Taipei

TAIPEI (Reuters) - Foxconn's venture attempting to build a standardised electric vehicle platform is targeting India or Thailand for the production of a small battery-powered car under development, the unit's chief executive said.

The Taiwanese company's EV platform unit Mobility in Harmony (MIH) would be willing to work with its parent or another company to build the new three-seat EV priced below $20,000 and tailor-made for a corporate delivery fleet, MIH CEO Jack Cheng told Reuters in an interview.

MIH has been in talks with convenience stores, car rental companies and courier companies ahead of unveiling its first prototype EV at Japan's largest auto trade show in October, Cheng added.

He declined to name the companies in talks with MIH, but said the car would be priced between $10,000 and $20,000. India and Thailand are likely contenders for production sites, he said, adding that he expected India to be crucial to MIH's longer-term growth.

"You build where the potential market is...In India or Southeast Asia, you have a huge volume opportunity right now," Cheng said, calling India a potential "emerging power for the next generation" in the EV sector.

MIH had not previously described its manufacturing strategy or the potential customers for its new vehicle.

Since 2021, Foxconn has had a joint venture with Thailand's state-energy company PTT centred on EVs, an area of focus for the Southeast Asian country's government.

For its part, Foxconn has so far failed to land the kind of deal that would show the EV market can be opened to the type of contract manufacturing that Foxconn came to dominate in consumer electronics for Apple's iPhone.

Foxconn established the MIH consortium of some 2,600 suppliers two years ago with the aim of creating an open platform that could become the equivalent of Google's Android operating system for EVs.

Cheng conceded MIH had "not seen success yet" but said returns for participating suppliers would come with orders for a range of new EVs called Project X. The idea is to use low-cost, shared platforms to allow corporate fleet operators to order custom-made EVs.

So far, that model is largely untested, and analysts have said the best opportunity for a new EV entrant like Foxconn could close in the next few years as established automakers and startups ramp up their own production.

MIH plans to start production of the three-seat EV about 18 to 24 months after the prototype is unveiled in October, Cheng said. A six-seat EV is scheduled to follow in 2024 and a nine-seat model in 2025.

Based on its timeline, it would take MIH four years or more from its founding to first sales in a best case scenario.

But Cheng, who was a co-founder of Chinese EV maker NIO and headed Fiat's joint venture in China before joining Foxconn, said Tesla's success with its large Shanghai plant showed how quickly an EV maker could scale up.

"I'm building another Shanghai, probably in India," Cheng said. "If this is a Foxconn plant, fantastic, it's the mother company, we put it into the Foxconn plant. If this is a local India plant and it's even more competitive, give it to the India plant."

Foxconn, which only produces a small number of EVs at present, has set an initial target of gaining a 5% share of the global market by 2025. MIH's sales will count towards Foxconn's target, Cheng said.

(Reporting by Sarah Wu; Editing by Kevin Krolicki and Jamie Freed)
Tupperware has become a meme stock, gaining over 300% in past month


Chris Morris
Mon, July 31, 2023


Bed Bath & Beyond has wrapped up its liquidation sale and GameStop is losing executives, so the meme stock crowd is on the hunt for the next big investment for day traders who source their investments largely from Reddit—and may have found it in the kitchen cabinet.

Shares of Tupperware have rallied in the last several days, with shares gaining more than 300% in the past month and more than doubling in the past five days. (The stock was up another 7% in early trading Monday morning.)

The company hasn’t come close to the highs of the early meme stocks, and it still trading in the $3 range, but that’s a big jump from the 80 cents it was trading at in early July. (Year to date, Tupperware stock is still down more than 20%.)

That dip is largely due to an announcement by the company in April of this year that it faced substantial liquidity problems and “there is substantial doubt about its ability to continue as a going concern.”

The company faced a possible delisting at one point in 2023, failing to file its annual report. It said it hoped to do so by the end of May, but failed to meet that deadline. The company now says it will file the annual report by the end of August and has pushed its most recent quarterly report to late September, but noted that “there can be no assurance that either the Form 10-K or Form 10-Q will be filed by such dates.”

Those worrisome notes led to traders shorting the stock—and that’s often catnip for meme stock traders. Whispers that the company might have found an investor are also sparking optimism.

Sales have been declining at Tupperware for years, as competition in the plastic storage container business has increased dramatically, with competitors offering products at substantially lower prices. In 2020, however, Tupperware reported its first year-over-year sales increase since 2017.

Tupperware says it is working to improve its capital structure and near-term liquidity—and has brought on advisors to help it look for investors or potential partners. It’s also reviewing its real estate portfolio for potential cash injections.

This story was originally featured on Fortune.com



Blackstone Alum Doubles Down on Drone Startups After 600% IdeaForge Return

Baiju Kalesh
Tue, August 1, 2023 


(Bloomberg) -- The largest single investor in IdeaForge Technology Ltd. is doubling down on India’s drone-making sector after an early bet on the Mumbai-listed company generated a return of almost 600%.

Florintree Advisers Pvt. this month bought a 15% stake in BotLab Dynamics, an Indian drone maker that specializes in light shows, for about 200 million rupees ($2.4 million), according to Mathew Cyriac, the investment firm’s founder and a former Blackstone Inc. dealmaker. The transaction values BotLab at about 1.2 billion rupees, he said.

“We had evaluated at least 15 drone makers in India before this investment,” Cyriac said. BotLab “is a deep tech company which brought electronics, control systems and hardware together,” he added.

BotLab was established in 2016 at the technology business incubator unit at the Indian Institute of Technology Delhi, according to its website. Three years later, the country’s Army Design Bureau asked the startup to demonstrate its drone swarm technology with 10 drones. In 2022, BotLab put on a light show with 1,000 drones that formed images and transitioned from Mahatma Gandhi’s image to showcasing the 75th anniversary of India’s independence.

BotLab will use the fresh capital for product development as well as getting into applications in defense and surveillance, Cyriac said. It plans to export to other Asian countries and the Middle East later, he added.

The bet on BotLab came about a year after Florintree invested around 1 billion rupees in IdeaForge at a valuation of 8.5 billion rupees. IdeaForge earlier this month went public after an initial public offering that raised about 5.7 billion rupees. Its shares have risen nearly 70% from the IPO price, giving the company a valuation of around 47 billion rupees.

Florintree didn’t sell any shares in IdeaForge’s IPO and remains its single largest shareholder with an 11% stake. The investment generated a return of over 570% based on its latest market value, Cyriac said.

Cyriac joined Blackstone as its second employee in India in 2006 and eventually became the firm’s co-head for private equity in the country. He bought precision engineering firm Mtar Technologies Pvt. from Blackstone in 2017 when he left the buyout firm. Mtar’s shares have surged more than 270% since their debut in 2021.

Three other companies that Florintree is backing could go public in the coming year, Cyriac said. They are in the digital and precision engineering sectors, he added.


Bloomberg Businessweek
Asset Managers Pledging Climate Action Drop Ball When Investing


Frances Schwartzkopff
Tue, August 1, 2023 


(Bloomberg) -- Despite commitments to sustainability, BlackRock Inc., Vanguard Group Inc. and Goldman Sachs Group Inc. are among the asset managers investing more in polluting companies than in those actively working to lower their carbon footprints, FinanceMap reported.


According to a review of $16.4 trillion in stocks held by 45 of the world’s biggest asset managers, only Natixis SA and Schroders Plc have more investments in companies working toward meeting the goals of the Paris Agreement than in companies tied to polluting technologies. The biggest laggards among the 45 asset managers are Sumitomo Mitsui Trust Holdings, HSBC Asset Management and Mitsubishi UFJ Financial Group.

“The data shows that while they may talk the talk, most asset managers aren’t walking the walk when it comes to using their influence to drive real change in investee companies and sustainable finance policy,” said Daan Van Acker, program manager at FinanceMap, in a statement. FinanceMap, which prepared the report, is affiliated with climate nonprofit InfluenceMap.

The report was the third by FinanceMap since 2019 and sought to determine whether a recent increase in the number of climate initiatives and commitments, such as the Net Zero Asset Managers initiative, has made a difference in how asset managers invest and engage with companies.

The 45 asset managers that were studied together have 2.8 times more invested in companies involved fossil fuel production ($880 billion) than in green investments ($309 billion). The assessed equity funds for Goldman Sachs and State Street Corp. are the most exposed to the fossil fuel production value chain, both with 2.2 times higher exposure to the sector than the average asset manager, the report said.

Asset managers in Europe, where environmental disclosure requirements have become more rigorous, scored the highest in terms of working with companies to transition, led by Legal & General Investment Management plc, UBS Asset Management, and BNP Paribas Asset Management, FinanceMap said.

Some investors are sharpening their focus on the environmental and social impacts of their holdings in response to this summer’s extreme weather events. In Canada, where almost 12 million hectares of forest have burned in extraordinary fires, investors are avoiding companies that contribute to climate change, according to a survey of financial advisers by Ortec Finance BV, a risk management firm.

 Bloomberg Businessweek
MEET THE 1%
These 21 private equity power players are shaping the $8 trillion industry as a new guard emerges

Luisa Beltran
Mon, July 31, 2023 

There’s an old joke in private equity: 60 is the new 30. At least that’s how it's long played out on Wall Street. Indeed, this powerful corner of the finance world was for decades dominated by the founders who practically invented the field—then hung on atop their companies for as long as they possibly could. Finally, that’s changing—or at least starting to. There is not only a crop of new leaders at the biggest firms, there's a wave of smaller shops finding their place in the power structure.

And while the rise in interest rates and dropoff in deal flow has squeezed PE companies over the past year, the sector is still massive. Private equity, which refers to firms that use outside capital to invest in companies, controls nearly $8 trillion in assets globally, including $4.1 trillion in the U.S., according to data from Preqin. Private equity dry powder, which refers to capital available to invest, stood at $1.5 trillion in July, excluding venture capital, Preqin said.

Private equity firms are also big employers. Last year, 12 million people worked at companies owned by buyout shops, or at the PE firms themselves, earning $1 trillion in wages and benefits, according to a report from professional services firm EY that was prepared for the American Investment Council. (The AIC is a lobbying group for the private equity industry.) Some of the most well-known companies, including Airbnb, Uber, and Dunkin’, have been backed by private equity firms.

Since their launch in the 1970s and 1980s, many of the original private equity firms, which include KKR, Blackstone, and Carlyle Group, have expanded beyond PE, investing in credit, real estate and infrastructure. These founding firms typically no longer call themselves private equity but now use monikers like alternative asset manager ("alts") or investment firm.

The aging founders of some of these original firms had for years refused to hand over the reins to the next generation. That changed over the past decade, with several buyout shops laying out their succession plans. Leadership changes, however, don't always go smoothly and can sometimes lead to very public spats, as was the case at Apollo Global Management when founder Leon Black left the firm in 2021 after his ties to Jeffrey Epstein became public. This led to a power struggle at Apollo over who would replace him, Fortune reported, with the role ultimately going to Marc Rowan. (Apollo did not return calls or messages for comment.)

There’s also a group of younger firms that have achieved a level of success to rival the old guard. These leaders are well-known in the industry but still relatively unknown outside of it. To compile our list, Fortune reviewed the biggest PE investments and exits, and canvassed private equity executives to suss out which leaders are on the rise—and may eventually run one of these storied firms.

Robert F. Smith, founder, chairman and CEO of Vista Equity Partners


Robert F. Smith, Founder, Chairman and CEO of Vista Equity Partners

Robert F. Smith, 60, is one of the most powerful executives on Wall Street. His firm has over $100 billion in assets under management and has remained one of the most active buyout shops despite the slowdown in dealmaking. Vista invests in software companies; it has clinched three take-private acquisitions since Oct. 22, including Duck Creek Technologies, KnowBe4, and Avalara. The firm has also scored some big exits, like selling Apptio to IBM for $4.6 billion in June and Cvent to Blackstone for about $4.6 billion. Vista has generated $18 billion by selling stakes and holdings since Nov. 30, 2021, and has returned $14.3 billion to investors, according to a June statement.


Smith, a former Goldman Sachs tech banker, founded Vista in 2000. His wealth is estimated at $12 billion, according to Bloomberg. He placed 286th on Forbes's list of world’s billionaires this year and, in 2022, he ranked 86th on the Forbes 400 list of richest Americans. He is also known for his philanthropy: In 2019, Smith famously paid off $34 million in loans for 400 graduates of Morehouse College.

Jon Gray, president and chief operating officer, Blackstone


Jon Gray, Blackstone’s President and Chief Operating Officer

In July, Blackstone was the first alternative manager to surpass $1 trillion in assets under management, a milestone that was three years ahead of schedule, Fortune reported. BX, launched in 1985, is also the only one of the large public alt firms that has yet to finalize its succession. Jon Gray, Blackstone's president and COO, is largely considered the heir apparent to CEO and Chairman Stephen Schwarzman.

Gray, 53, joined Blackstone in 1992 fresh out of the University of Pennsylvania, where he earned two degrees: a B.S. in economics from the Wharton School and a B.A. in English from the College of Arts and Sciences. He has spent his whole career at Blackstone, and served as its global head of real estate for 13 years. Gray is credited as the architect of Blackstone’s buy of Hilton Hotels for about $26 billion in 2007, clinched right before the onset of the global financial crisis. BX took Hilton public in December 2013. Blackstone’s profit on Hilton was $14 billion and is considered one of the best returns in industry.

Marc Rowan, cofounder and CEO, Apollo Global Management


Marc Rowan, chief executive officer of Apollo Global Management Inc., during a Bloomberg Television interview at the Bank of America Global Investor Summit in Paris, France, on Thursday, March 9, 2023. Apollo expects growth in private credit to outstrip its other businesses with the combination of high interest rates and low liquidity driving demand. Photographer: Benjamin Girette/Bloomberg via Getty ImagesMore

One of the messiest handoffs in private equity history led Marc Rowan to assume leadership of Apollo Global in 2021. Rowan was behind some of the most profitable bets at Apollo, including insurer Athene, which the firm finished merging with in January 2022. Apollo’s shares have soared 66% since Rowan took charge in 2021. AUM at Apollo has increased by 31% to about $598 billion as of March 31.

Rowan, 60, is chair of the board of the UJA-Federation of New York, a leading local philanthropy. He is also a founding member and chair of Youth Renewal Fund, as well as vice chair of Darca, Israel’s top educational network.

Orlando Bravo, founder and managing partner of Thoma Bravo


Orlando Bravo, Founder and managing partner of Thoma Bravo

Thoma Bravo, the software-focused PE firm founded by Orlando Bravo, has been active during the current merger slowdown. In June, Thoma Bravo scored one of its biggest exits when it sold fintech Adenza to the Nasdaq for $10.5 billion in cash and stock. Thoma Bravo has acquired or invested in more than 440 software and technology firms in its more than 20-year history, with AUM for Thoma Bravo totaling more than $127 billion as of March 30. The PE firm in December raised $24.3 billion, the most ever, for its flagship Thoma Bravo Fund XV, according to a statement.

Bravo, 52, was born in Mayaguez, Puerto Rico. In October 2017, when Hurricane Maria destroyed Puerto Rico’s power grid, leaving the island without food and water for days, Bravo organized airlifts and shipments of food, water, and supplies to the island. He is the founder and chairman of the Bravo Family Foundation, which aims to provide access and opportunities to young adults in Puerto Rico.

Hadley Mullin, senior managing director, TSG Consumer Partners


Hadley Mullin, Senior Managing Director of TSG Consumer Partners

Launched in 1987, TSG is one of the first private equity firms to focus solely on the consumer sector. Investments currently include BrewDog craft beer, Dutch Bros coffee chain, and Duckhorn Wine Co. In January, TSG’s ninth fund raised $6 billion in commitments, up $2 billion from its prior pool. TSG has about $20 billion of assets under management.

Private equity has long bemoaned the lack of women in its senior ranks. That’s not an issue at TSG. Hadley Mullin, 48, joined the firm in 2004 and, in 2014, she was named a senior managing director. This made Mullin the No. 3 executive at the firm. Roughly one-third of TSG’s partners are female, while more than half of TSG’s 79 employees are women.

Harvey M. Schwartz, CEO, Carlyle Group


Harvey M. Schwartz, CEO of Carlyle Group

Founded in 1987, Carlyle’s businesses include global private equity (which includes PE, real estate, and infrastructure), as well as credit and investment solutions, which refers to fund-of-funds adviser AlpInvest. (Carlyle acquired AlpInvest in 2011.) The investment firm employs more than 2,200 professionals spread across 29 offices around the world. It had $381 billion in assets under management as of March 31, up 17% from a year ago.

In August 2022, drama at Carlyle kicked into high gear when then CEO Kewsong Lee abruptly quit. Carlyle spent several months searching for its next leader before picking Harvey M. Schwartz, a former Goldman Sachs president and co–chief operating officer, in February. While it’s too soon to gauge his progress, Schwartz, 59, has set out some goals for Carlyle. The exec wants to increase Carlyle’s capital markets business, which arranges loans for its portfolio companies, and made $50 million in fees last year, Schwartz said during a Bernstein investor conference in June. “It's obviously something we can grow. I have a team focused on putting together a plan for that, but I think it's kind of obvious whitespace,” Schwartz said, according to a transcript. He also wants to expand Carlyle’s reinsurance business. The firm owns a stake in Fortitude Re, a Bermuda reinsurer. Carlyle, under Schwartz, has also made changes. In July, the firm promoted Lúcia Soares to chief information officer and head of technology transformation. Carlyle also named John Redett, currently head of Carlyle’s global financial services, to be CFO and head of corporate strategy effective Oct. 1. Curt Buser, Carlyle’s current CFO, will retire at the end of the year.


Annie Lamont, cofounder and managing partner of Oak HC/FT


Annie lamont of Oak HC/FT

No list of private equity power players would be complete without mention of Annie Lamont, 66, who helped launch Oak HC/FT in 2014. The venture and growth firm, which focuses on companies in healthcare and fintech, has $5.3 billion in AUM. In July 2022, Oak HC/FT raised $1.94 billion with its fifth flagship fund.

Oak HC/FT lists about 25 investments credited to Lamont. These include Aspire Health, which was sold to Anthem in 2018; health insurance startup Devoted Health; and VillageMD, a primary care provider. She is a former managing partner of VC firm Oak Investment Partners. Lastly, Lamont is the first lady of Connecticut: Her husband, Ned Lamont, was reelected governor of that state in 2022.

Jeffrey Perlman, president of Warburg Pincus


Jeffrey Perlman, President of Warburg Pincus

Warburg, founded in 1966, is a growth investor known for its health care deals, but the firm also invests in sectors such as consumer, financial services, energy transition, technology, industrial, and real estate. With over $83 billion in AUM, the firm has been fundraising for its latest flagship fund, Warburg Pincus Global Growth 14. Marketing for the pool is expected to close soon and exceed its $16 billion target, Fortune has learned.

Warburg has a history of choosing its leaders without any drama. In 2002, John Vogelstein, a cofounder, picked Chip Kaye and Joe Landy to serve as Warburg’s co-CEOs. Landy stepped aside in 2019, leaving Kaye as sole chief executive. Last week, Kaye tapped Jeffrey Perlman, who leads Warburg’s investments in Southeast Asia and its real estate franchise across Asia-Pacific, to be Warburg’s next leader. Perlman, 40, was named president of Warburg, taking over for Timothy Geithner, who became chairman. (Geithner served as Secretary of the Treasury under President Barack Obama.) Kaye is staying put as Warburg’s CEO for now.

Martin Nesbitt, cofounder and co-CEO of the Vistria Group


Martin Nesbitt, co-founder and co-CEO of The Vistria Group

Launched in 2013, the Vistria Group is a middle market private equity firm that invests in health care, knowledge and learning, as well as financial services. Vistria, with over $10 billion in AUM, is currently in the market for its fifth flagship fund that is targeting $4 billion, according to documents from the Connecticut Retirement Plans and Trust Funds. This year, Vistria has invested in ​​U.S. Retirement & Benefits Partners, MGT Solutions and Really Great Reading.

Martin Nesbitt, 60, is a longtime friend of President Barack Obama, having served as national treasurer for both of his presidential campaigns. Before starting Vistria with Kip Kirkpatrick (who also helped launch Water Street Healthcare Partners), Nesbitt cofounded the Parking Spot, a provider of off-airport parking facilities, and served as its president and CEO from 1998 to 2012. (Parking Spot was sold to Green Courte Partners in December 2011.) Nesbitt was also previously an officer of the Pritzker Realty Group.

Margaret Anadu, senior partner of real estate at the Vistria Group


Margaret Anadu, Senior Partner of real estate at The Vistria Group

Margaret Anadu, 42, joined Vistria in July 2022 as a senior partner, where she heads up real estate investing. She spent nearly 19 years at Goldman Sachs, where she was the youngest black female to make partner at age 37 in 2018, Fortune reported. At Goldman, Anadu was global head of sustainability and impact for asset management, as well as chair of the urban investment group. GSUIG grew to over $2 billion of investments annually with Anadu at the helm. She was also chief architect of the One Million Black Women investment strategy at Goldman, which aims to invest $10 billion in Black women-owned businesses and nonprofits.

KKR co-chief executives Joseph Bae and Scott Nuttall


KKR Co-Chief Executives, Joseph Bae and Scott Nuttall

Succession at KKR has offered none of the drama that other firms have provided. In 1976, Jerome Kohlberg Jr., along with cousins Henry Kravis and George Roberts, founded KKR, making it one of the older private equity firms. Kohlberg left KKR in 1987, launched middle market firm Kohlberg & Co. and passed away in 2015. KKR has since evolved into one of the bigger alternative asset managers with 127 portfolio companies and about $510 billion in assets. KKR’s headcount numbers over 2,400 people, while its portfolio companies employ more than 800,000 people. KKR’s AUM stood at about $510 billion as of March 31.

More than 40 years after its founding, KKR set out its leadership in 2017, when it named Joseph Bae, now 51, and Scott Nuttall, 50, as co-presidents. The duo took charge as KKR co-CEOs in October 2021. Kravis and Roberts, both 79, have stayed on as co-executive chairmen but are giving up voting control of the firm they founded. By the end of 2026, KKR will eliminate preferred shares for Kravis and Roberts, putting it in line with other firms like Apollo.

Collin Roche and Dean Mihas, co-CEOs and managing directors of GTCR



GTCR, founded in 1980, is a middle market buyout shop, known for its investments in financial services, healthcare, technology, and consumer services. With every fund, GTCR has gotten larger. That momentum gained a big push in 2019 when the firm named Collin Roche, 52, and Dean Mihas, 56, as its co-CEOs. In 2020, GTCR collected $7.9 billion with its 13th flagship fund, a 50% jump over its prior pool. This year, GTCR topped that mark when GTCR Fund XIV came in at $11.5 billion, its biggest fund ever.

Earlier this month, GTCR unveiled plans to buy a majority stake in Worldpay. Fidelity National Information Services, or FIS, acquired WorldPay in 2019 and had planned to spin off the underperforming unit. On July 6, GTCR swooped in and agreed to buy 55% of WorldPay for $11.7 billion, its biggest deal ever and one of the largest U.S. PE transactions this year. Other GTCR deals this year include the sale of Paya, a payments provider, to Nuvei Corp for about $1.3 billion. AUM for GTCR was more than $35 billion.

William Ford, chairman and CEO of General Atlantic


William Ford, Chairman and CEO of General Atlantic

Founded in 1980, General Atlantic is one of the original growth equity firms that has evolved into a global investment manager. GA typically takes minority stakes in companies and has made over 500 investments in businesses such as ByteDance, parent of TikTok; edtech company Duolingo; and fintech Chime.

William Ford, 62, isn’t a newcomer to private equity. The executive joined GA in 1991 and became CEO in 2007. Under Ford’s leadership, GA has become one of the bigger growth firms with roughly $77 billion in AUM. Armed with $15 billion to invest in deals, GA is expanding into buyouts and credit.

Jose E. Feliciano, managing partner and co-founder Clearlake Capital Group


Jose E. Feliciano, Managing Partner and co-founder Clearlake Capital Group

Jose E. Feliciano, 50, is a former Goldman M&A banker who helped launch Clearlake Capital in 2006. The PE firm, which invests in the technology, industrial and consumer sector, has over $70 billion in AUM.

Clearlake gained notice last year when, along with businessman Todd Boehly, it bought the Chelsea Football Club. So far this year, the PE firm has completed the sales of Archer Technologies to Cinven and a majority stake in FloWorks International to Wynnchurch Capital. It has also closed 13 add-on transactions. Clearlake is currently investing from its seventh flagship private equity fund, which raised more than $14.1 billion in May 2022.


Jon Winkelreid, chief executive and director, TPG


Jon Winkelreid, Chief Executive and Director, TPG

TPG’s succession has also been rather dull. Founded in 1992 by David Bonderman and Jim Coulter, TPG is known for its buys of well-known companies like Continental Airlines, Neiman Marcus and J. Crew Group. The firm, like its rivals, has branched out beyond private equity to growth, impact and real estate investing. Earlier this year, it agreed to buy credit and real estate investment firm Angelo Gordon for about $2.7 billion. TPG became the latest of the large alternative asset managers to go public when its shares began trading on the Nasdaq in January 2022. While its market capitalization is more than $9 billion, TPG’s AUM is much bigger at $137 billion.

TPG was one of the first to lay out its succession plan when Jon Winkelreid joined in 2015 as co-CEO with cofounder Jim Coulter. (Bonderman continued in his role as co-founder and chairman of TPG.) Winkelreid, 63, was already known on Wall Street, having spent more than 27 years at Goldman Sachs where he was considered a potential successor to then CEO, Lloyd Blankfein, Fortune reported in 2012. He retired in 2009 as Goldman’s president and co-chief operating officer. In 2021, Winkelreid was named TPG’s sole-CEO when Coulter became executive chairman.

John Connaughton and Jonathan Lavine, co-managing partners of Bain Capital


John-Connaughton-and-Jonathan-Lavine,-co-managing-partners-of-Bain-Capital

Bain Capital can trace its roots to management consulting firm Bain & Co. In 1984, partners of Bain & Co, including Mitt Romney, launched the PE firm known as Bain Capital. In fact, much of Bain Capital’s first fund came from Bain & Co, the New York Times reported in December 2011. Like many of the large alt managers, Bain has expanded beyond private equity and now invests in venture capital, public equity, fixed income, credit, and real estate. It has about $175 billion in AUM as of March 31.

In 2016, Bain Capital set out its leadership, when John Connaughton and Jonathan Lavine, 57, were named co-managing partners, Fortune reported at the time. Longtime partners Josh Bekenstein and Steve Pagliuca became co-chairman. Connaughton, 57, is the global head of Bain’s buyout arm which has invested in 1,150 companies. Lavine is the chief investment officer of Bain’s credit unit, the former Sankaty Advisors, as well as Bain’s special situations business.

Ramzi Musallam, CEO and managing partner of Veritas Capital


Ramzi Musallam, CEO and managing partner of Veritas Capital

Veritas is a tech investor that targets companies in government-related industries like health care, education, and national security. While the deal market may be slow, Veritas, along with Elliott Investment Management and Patient Square Capital, agreed to buy Syneos Health for $7.1 billion in May. The firm is currently investing out of its eighth flagship fund, Veritas Capital Fund VIII, which raised $10.65 billion of committed capital in October.

Ramzi Musallam, 54, joined Veritas in 1997. In 2012, Musallam was the firm’s second-highest ranking executive when Robert McKeon, who founded Veritas and was its chairman, died. McKeon’s passing triggered key man issues, meaning Veritas investors could legally walk away. Musallam convinced investors to stick with Veritas, which then had $2 billion in AUM. That turned out to be a good bet. Roughly 10 years later, Veritas has about $45 billion of AUM.


Steve Klinsky, founder and CEO of New Mountain Capital


Steve Klinksy of New Mountain

Like many firms, New Mountain doesn’t just invest in private equity but also targets credit and net lease financing in real estate. The firm typically focuses on sectors such as consumer, software, health care, and fintech. New Mountain is currently fundraising for its latest flagship fund and seeking $12 billion, Buyouts reported in March. In 2021, the firm’s sixth pool raised $9.6 billion.

Klinsky, 67, is a former Goldman Sachs partner who cofounded the leverage buyout group at GS in 1981. In 1984, he joined Forstmann Little and Co, one of the biggest buyout firms of the 1990s. He was a general partner at Forstmann from 1986 to 1999. That year, in 1999, Klinsky founded New Mountain and the firm now has more than $40 billion in AUM.

This story was originally featured on Fortune.com
SCOTLAND
The looming battle over pylons for green energy

Douglas Fraser - Business and economy editor, Scotland
Mon, July 31, 2023 

Pylons in Firth of Forth

The Great Energy Transition from fossil fuels to renewable energy has numerous dimensions: jobs lost and others created, electric vehicles, biofuelled planes, scrapped gas boilers and triple glazing.

But to those who live in rural communities near the picturesque village of Beauly, it means pylons and cables in four directions, a vast new substation, and the "Beauly buzz" that keeps some awake at night.

They are at the crossroads of a vast network of infrastructure being planned to bring power from where it will be generated within a decade, and to funnel it through the central Highlands towards the homes, businesses, hospitals and schools to the south where most of the demand is.

Green energy projects worth billions stuck on hold

Where does the UK get its energy and electricity?

With a budget of £10bn, SSE Networks Transmission (SSEN) has a large share of more than £50bn that rewiring Britain is expected to cost. It is spending around two-thirds of its budget on sub-sea links, but it is the onshore links that are whipping up squalls of opposition.

Battles to protect scenic and environmentally sensitive areas from the march of ever-bigger wind turbines are now moving to pylons and cables.

And where these skirmishes used to be isolated to one or at most two communities affected by a wind farm, the campaigns are now strung along routes, like beacons.

From the north, one high-voltage line is planned to bring power 107 miles from a sub-station at Spittal near Wick in Caithness, across sensitive peatlands, past Sutherland's eastern villages of Golspie and Brora, over the Kyle of Sutherland near Bonar Bridge and through Easter Ross to Beauly.

That's in addition to a sub-sea cable that takes high-voltage current from Caithness to the coast of Moray.

Substations, like this one at Loch Buidhe will need to be expanded to cope with the extra capacity

From the west, a further cable has been approved to bring power from the Isle of Lewis and the offshore floating wind farms being planned for the Hebridean island's north and west coast.

That cable under the Minch makes landfall at Dundonnell, south of Ullapool, and will run underground from west to east coasts, where a large plant will transfer its direct current (DC) to the alternating current (AC) on which the rest of the grid works.

DC at high voltage is seen as a more effective way to transmit power over distance and under water, and takes up a narrower corridor of land when it is buried - but it costs a lot to transform it to and from AC.

Power is coming from the North Sea, through a further gigantic sub-station at Peterhead across Aberdeenshire, Moray and Nairn, with further substation infrastructure planned for New Dear and Blackhillock.

A further grid upgrade means pylons, cables and substations stretching south from Kintore through a substation planned for Fiddes and through Angus.

Previous upgrades to the existing power line seen here near Beauly were controversial

Going south from Beauly, a high-voltage line has been part of the national electricity grid since 2015.

The Beauly-Denny line became famous and infamous as the battle over pylons of up to 60 metres (197ft) through the central Highlands, at their most obvious to road and rail travellers at the Drumochter Pass north of Pitlochry, and connecting to the southern network at Denny near Falkirk.

That took 14 years in planning and disputes, including five years for a public inquiry. Approval was given with numerous mitigating requirements to compromise with communities who did not want to see pylons and nature campaigners who worried about habitat.

That route is 130 miles long. The scale of what is now being planned is roughly three times as big. And following public meetings along the routes through spring and summer, campaigners believe they can tie this in knots if they secure public inquiries.

Controversial Beauly-Denny power line goes live

Some want the planned routes re-directed, away from homes, or at least away from their homes, or the cables undergrounded or laid under the sea.

Others are not interested in mitigations, but want the industrialisation of the Highlands to stop, saying the developer has not proven a need for so much intrusion into the landscape.

In an uncompromising campaign from the Kiltarlity and Kilmorie communities near Beauly, its leaders say they are getting regular contacts from others along these routes, now including those in the Mearns area south of Aberdeen.

Lyndsey Ward points beyond the red deer stags grazing in her garden to the route the pylons and cables are likely to take, within 170 metres (557ft) of her remote hilltop home.

But she is not a NIMBY she insists - it is not a matter of "Not In My Back Yard" so much as "not in anyone's back yard", she says.

Lyndsey Ward believes there are alternative ways of delivering low carbon energy without damaging the landscape

SSE hasn't proven the need for this infrastructure, she says. If people in the south want low-carbon energy, Communities B4 Pylon Companies says they should have their own wind turbines and power pylons near their homes, and they can develop nuclear power, or solar, or import solar energy from the Mediterranean.

"We don't think we need it," she says. "We've asked SSEN to give us evidence of need and they've failed to do that. If they can prove need, we'll listen to them and we'll talk solutions. But until they do that, there's no point in talking about it.

She is not disputing the need to shift from fossil fuels, insisting she is not against renewable power. Her campaign is for it to become more localised.

This overlooks any evidence that the quality and consistency of the wind resource in and around the north of Scotland is far better than wind power further south.

"We've got enough for Scotland's need. That's when the wind's blowing. When the wind's not blowing, we still need something else."

"England can't take it. Their grid structure isn't up to doing it, and won't be for a decade."

There have been campaigns in the south of Scotland too, and a growing realisation that the extent of offshore wind in the North Sea will require much more cabling to get power from England's east coast, across its fens and flat fields and into the bigger cities.

Some of that power will come from "boot-strap" cables linking the north-east of Scotland with English landfall sites.

One such high-voltage direct current (HVDC) cable already links Hunterston in Ayrshire with north Wales, and is occasionally used to bring power north when the wind drops and Scotland needs to import energy.

The Torness nuclear power plant in East Lothian is currently due to close in 2028

When Torness nuclear power station has to close, and with no prospect of nuclear power being allowed a new generation in Scotland, there will be more such imported energy necessary.

In the south of Scotland, a division of Scottish Power has a monopoly on the transmission system, inherited from its days as a nationalised company. In England and Wales, that role is played by National Grid.

In the north of Scotland, transmission is the responsibility of a division of SSE, which was also a nationalised company as "the Hydro Board". It re-shaped the map of the Highlands with vast hydro schemes, which brought power and people into the Highland glens, much of that in the 1950s.

SSE Networks Transmission has the task of designing that network, persuading regulators its plans are at reasonable cost and profit, and persuading the public to accept new grid connections across its extensive and environmentally-sensitive region.

Its regulator, Ofgem, wants to see evidence that the lowest cost options have been thoroughly explored. It speaks for the end customer, who will have the cost of this £10bn project added to bills.

But the lower the cost, the more the scheme relies on pylons, which is antagonising at least some of those who live nearby.

SSEN's Rob McDonald says politicians will have to explain to the public why these projects are needed

SSEN Transmission is not looking for sympathy, but its managing director Rob McDonald is looking for both UK and Scottish governments and energy regulators to step up and make the case more strongly for what the company is being required to do.

As local MPs and MSPs voice the concerns of constituents, Rob McDonald, managing director of the division, diplomatically reminds them that his job is to put into practice the consensus across governments and parties:

"These projects are really important in terms of delivering the UK and the Scottish governments' climate change and energy security targets.

"This is a portfolio of projects which has been approved by the energy system operator and the energy regulator Ofgem, which is about delivering the UK's energy ambitions."

In other words, this is SSEN doing the work for others, and on a tight leash in terms of the programme's profitability.

"Both the UK government and Scottish government are very supportive of these projects. They're supported by opposition parties in terms of the climate ambitions they're trying to address here. So there's broad support for what we're trying to achieve here.

"We're in the early stages of consultation, and as we go through this process of consulting with the public, we're going to have to hear from the politicians and the regulators about why these projects are needed."
ScotWind expansion

It is expected to deliver the infrastructure that will be necessary if targets and ambitions are to be met for ScotWind, a colossal build-out of wind power capacity in the waters around Scotland.

That is a world-class resource of relatively strong and consistent wind, with the deployment of both fixed and floating turbines rising more than 200 metres (656ft) above the sea.

The industry bid for the right to develop more than 27 gigawatts of capacity in this round of offshore wind - more than four times the amount Scotland usually requires.

Not all of that will be built. The industry is warning that rising costs are already putting the brakes on investments in the southern North Sea, and there are many obstacles to be navigated, in environmental audits, supply chains, planning approval and grid connections.

Some can be harnessed locally to make hydrogen. Some could bring new, energy-intensive industries close to the source of power. Some can be stored in batteries or pumped storage schemes. But most has to use cables to get to market, and to do so at scale.

Those wind farms that do rise from Scotland's waves can only stack up financially if their output can reach population centres and industries where it will be needed.

And that is where the Highlands, the islands and north-east of Scotland face increasing industrialisation and conflict with their natural beauty.


Why Barbie and Taylor Swift actually matter to the 2023 economic story

'Barbie' and Taylor Swift are driving consumers' experiential spending: Expert


Josh Schafer
·Reporter
Mon, July 31, 2023 

It's a Barbie girl summer for economists, too.

Mattel's (MAT) famous doll has been everywhere this summer, dominating the box office with the best opening weekend of 2023 and even getting a mention in the Federal Reserve's latest press conference.

But the story of Barbie's intersection with finance news is about more than the industry's most prominent purple-tied official Jay Powell answering a question about pink attire and Taylor Swift's Eras Tour, because both are proving to be legitimate drivers of a resilient US consumer keeping America out of a recession.

"These events are getting more highlighted specifically because of the situation we're looking at," Bank of America US economist Shruti Mishra told Yahoo Finance.

"Is the consumer going to drop? Is it still resilient? Those questions are the most important questions leading up to any Fed press conference, FOMC meeting, and just generally for the economic outlook."

Fed Chair Powell, for his part, didn't fully bite last week when asked about the impact of Barbie and Taylor Swift on the US economy. But even he noted it doesn't hurt.

"The overall resilience of the economy, the fact that we've been able to achieve disinflation so far without any meaningful negative impact on the labor market, the strength of the economy overall, that's a good thing," Powell said.

"It's good to see that, of course. It's also you see consumer confidence coming up and things like that, that will support activity going forward."

Margot Robbie attends the European premiere of "Barbie" in London, Britain July 12, 2023. (Maja Smiejkowska/REUTERS)

And these aren't just any popular summer events, either.

Reports have estimated Swift's Eras Tour could be the first billion-dollar concert tour ever.

Meanwhile, "Barbenheimer" — the dual box office hits of "Barbie" and Christopher Nolan's biopic "Oppenheimer" — combined for the fourth-biggest overall weekend in box office history.

In the latest release of the Fed's Beige Book, the Philadelphia Fed highlighted Taylor Swift's three-night stop at Lincoln Financial Field as a boost to the local economy.

Taylor Swift performs onstage during the Taylor Swift | The Eras Tour at Lincoln Financial Field on May 12, 2023 in Philadelphia, Pennsylvania. 
(Lisa Lake/TAS23/Getty Images for TAS Rights Management)

"Multiple contacts reported that the amount of money guests spend at their leisure destinations declined modestly in recent months," the report read.

"Despite the slowing recovery in tourism in the region overall, one contact highlighted that May was the strongest month for hotel revenue in Philadelphia since the onset of the pandemic, in large part due to an influx of guests for the Taylor Swift concerts in the city."

Analysis from Moody's shows Swift's impact wasn't just a one-off in Philadelphia, either.

Moody's had seen an increase in revenue per available room in every city Swift has stopped in that the firm tracks through its report's publication July 21.


Moody's tracked average revenue per room increases at all four of the cities Taylor Swift stopped at in May.

According to University of Michigan clinical assistant professor of marketing Marcus Collins, it's rare for a movie and concert tour to have this kind of impact.

With Barbie pink taking over wardrobes and Swift's Eras Tour bracelets dominating social media, the marketing behind both messages have transcended into a cultural moment. And culture, Collins told Yahoo Finance, is the "most influential external force of human behavior, full stop."

"The salience of (Barbie and the Eras Tour) makes it so that it's undeniable," Collins said. "You can't not talk about it because it's everywhere."

Jefferies US economist Thomas Simons told Yahoo Finance he hasn't seen anything like the obsession with Barbie and Taylor Swift in his more than 15 years working in economic research.


'Barbie,' Taylor Swift, & the Fed: Powell talks consumer spending & inflation

From moviegoers dressing in pink to see the Barbie movie to Taylor Swift fans shelling out big bucks to see her "Eras" tour, consumers are still spending on big events. Both pop culture phenoms were referenced in a question to Federal Reserve Chair Jerome Powell about consumer spending and economic growth. Powell said "it's good to see" the economy remain resilient despite the Fed raising rates, but he notes they will be watching to make sure that economic strength doesn't lead to inflation rising again. Powell did not say whether or not he has seen Barbie or the "Eras" tour.

Simons likens the interest from economists to the rise of social media and the "casualization" of economics, which leads to economists being both more aware of pop culture impacts and more willing to look for them.

And as economists and researchers alike have turned to the data to look for the impact of these cultural phenomena, the answers have been eye-popping.

In addition to the findings from Moody's and the Fed, recent data from Bank of America showed card spending on entertainment and clothing both spiked the week of Barbie's release with entertainment sales up about 13%.

"There's (likely) a Barbie and Oppenheimer effect to play out here," Mishra noted.


Bank of America saw an increase in card spending the week Barbie and Oppenheimer were released.

Josh Schafer is a reporter for Yahoo Finance.



In the Market: Signs of life in the moribund US deals market

Mon, July 31, 2023
By Paritosh Bansal

(Reuters) - Singapore's sovereign wealth fund Temasek invested the smallest amount since 2019 during its last fiscal year, as it waited for when pricing got more to its liking. Now, it's starting to see what it likes.

The S$382 billion ($287 billion) fund is seeing more investment opportunities. It invested in payment processor Stripe in March after passing on earlier fundraising rounds due to high valuation, said Jane Atherton, Temasek's joint head for North America.

Temasek is also seeing deals at reasonable valuations, adjusted for risks, to invest alongside private equity firms in buyouts, as well as to buy assets from them, she said.

"We have been somewhat cautious in terms of the pace of our deployment," Atherton said. "I would say we're getting less cautious as we continue through the year."

Temasek's evolving view reflects a change that is becoming more apparent in some parts of the U.S. deals market in recent weeks: the gap between the price expectations of buyers and sellers -- a key reason behind what has been a moribund year of deals -- is closing, according to half a dozen private equity investors and deal advisers.

Buoyed by a recent market rally driven by technology and other growth stocks and the U.S. economy's surprising resilience in the face of rate rises, buyers are becoming more confident than they were just weeks ago. Some are starting to think they can afford to pay more because they expect to increase the profits of companies they buy.

At the same time, some sellers, particularly listed companies, have come to realize that if their value didn't move up much in this year's stock market rally, the prices that they had seen at the highs in 2021 might not come back.

Peter Orszag, Lazard's incoming CEO, said sellers were coming around to the view that the impact of the higher rate environment on valuations may be "a new normal, as opposed to a very temporary blip" that they can wait out.

"As you move through time, the realization that this is the reasonable baseline becomes more potent, and that's what's narrowing the gap," Orszag said.

Among areas that could see increased activity are sectors such as healthcare, energy transition and technology. Private equity sales of the best portfolio companies and structured investments are becoming more active, too, the investors said.

One tech-focused investor, whose pipeline of deal opportunities is just about 20% of what it was two years ago, said the valuation convergence is leading to more talks. They added they expected to see a more pronounced pickup after Labor Day when people return from the summer holidays.

NASCENT RECOVERY


For banks, investors and companies, the change in sentiment, should it stick, is good news. Lower investment banking revenues dragged down profits at banks including Goldman Sachs and Morgan Stanley. Earlier this month investors latched onto any signs of hope, with comments from bank executives suggesting a recovery was afoot.

Any recovery, however, is tentative and the narrowing of the gap in expectations is not uniform across the market. Much uncertainty remains, including whether there is now too much optimism in the market.

"We're at the very nascent stages of this," said Jason Thomas, head of global research and investment strategy at Carlyle. "Perhaps this will fizzle out."

For now, the market dynamic is putting some valuations back within historical norms after the wild pandemic-era gyrations, creating conditions for buyers and sellers to meet.

In the software sector, for example, firms historically traded around 6 times forward revenue. During the pandemic rally, the multiples expanded to as high as 17 times, before dropping to 5 times last year, the tech-focused investor said.

Those multiples have now traded back up above 6 times, allowing deals to happen that would not have at the end of last year, two of the investors said.

In late June, for example, IBM bought software maker Apptio for $4.6 billion from Vista Equity Partners, paying more than 10 times forward revenue.

HIGHER RATES


The idea that the economy might be in for a period of higher inflation and interest rates is also playing into the calculus.

A deal that used to cost 6.5% a year to finance at the end of 2021, now costs 11% to 12%, according to Carlyle's Thomas. That means for a buyer to get a 20% annual return on the deal, the company's earnings would need to grow at 16% now versus 9% in 2021.

S&P 500 earnings, excluding the energy sector, are estimated to grow 7% in the third quarter, according to Refinitiv. With the economy looking in better shape, more buyers may feel they can meet higher growth targets, Thomas said.

When they can't agree on price, the two sides are exploring more creative ways to get along.

A company facing increased interest costs, for example, might want to replace part of its debt with other instruments that don't require interest payments, such as warrants and payment-in-kind notes, Thomas said.

Temasek is seeing more demand for such structured investments, Atherton said, with its Credit and Hybrid Solutions unit deploying when "people aren't yet willing to move to what we view as fair value on price, but we like the asset."

($1 = 1.3306 Singapore dollars)

(Reporting by Paritosh Bansal; Additional reporting by Greg Roumeliotis; Editing by Anna Driver)