Finance

U.S. ‘industrial renaissance’ is driving a rebound in fundraising

Published

6 months ago

November 20, 2024

Jonathan Gray, president and chief operating officer of Blackstone Inc., from left, Ron O’Hanley, chief executive officer of State Street Corp., Ted Pick, chief executive officer of Morgan Stanley, Marc Rowan, chief executive officer of Apollo Global Management LLC, and David Solomon, chief executive officer of Goldman Sachs Group Inc., during the Global Financial Leaders’ Investment Summit in Hong Kong, China, on Tuesday, Nov. 19, 2024.

Bloomberg | Bloomberg | Getty Images

An “industrial renaissance” in the U.S. is fueling demand for capital, Marc Rowan, CEO of Apollo Global Management said at the Global Financial Leaders’ Investment Summit in Hong Kong.

“There is so much demand for capital, [including through debt and equity] … What’s going on is nothing short of extraordinary,” Rowan said on Tuesday during a panel discussion.

This demand has been supported by massive government spending, particularly on infrastructure, the semiconductor industry and projects under the Inflation Reduction Act, said the asset manager, who is reportedly in the running for Treasury Secretary position under President-elect Donald Trump.

“What we’re watching is this incredible demand for capital happening against a backdrop of a U.S. government that is running significant deficits. And so the capital raising business, I think that’s going to be a good business,” he said.

Industrial policies, including the CHIPS and Science Act and the 2021 infrastructure legislation, warrant billions in spending.

Rowan added that the U.S. has been the largest recipient of foreign direct investment over the past three years and is expected to stay at the top spot this year as well.

Rowan and other panelists also identified energy and data centers — needed for artificial intelligence and digitization — as growth sectors requiring more capital.

Blackstone President and COO Jonathan Gray told the panel that data centers were the biggest theme across his entire firm, with the company employing billions on their development.

“We’re doing it in equity, we’re doing it financing … this is a space we like a lot, and we will continue to be all in as it relates to digital infrastructure.”

Fundraising and M&A recovery

Other panelists at the summit organized by the Hong Kong Monetary Authority said that capital raising was well-positioned to recover from a recent slowdown.

According to David Solomon, Chairman and CEO of Goldman Sachs, capital raising activity had reached peak levels in 2020 and 2021 amid massive Covid-era stimulus but later became muted amid the war in Ukraine, inflation pressures and tighter regulation from the Federal Trade Commission.

There has been a recent pick up in activity as conditions have normalized, along with expectations of friendlier regulation on dealmaking from the FTC under the incoming Donald Trump administration, Solomon said.

While there remains an inflationary backdrop and other risks in the current environment, Ted Pick, CEO of Morgan Stanley said that the consumer and corporate community are “by in large, in good shape” as the economy continues to grow.

“This environment has been one where, if you are in the business of allocating capital, it’s been great,” he said, adding that the group was now gearing up to get into “raising capital mode.”

“That is [the] hallmark of a growing and thriving economy, which is where the classic underwriting and mergers and acquisitions businesses take hold,” he said.

Solomon predicted that these trends would see “more robust” capital raising and M&A activity in 2025.

Finance

Chase CEO Jamie Dimon says markets are too complacent

Published

12 hours ago

May 19, 2025

Business Finance News

Jamie Dimon, CEO of JPMorgan Chase, leaves the U.S. Capitol after a meeting with Republican members of the Senate Banking, Housing and Urban Affairs Committee on the issue of de-banking on Feb. 13, 2025.

Tom Williams | Cq-roll Call, Inc. | Getty Images

JPMorgan Chase CEO Jamie Dimon said Monday that markets and central bankers underappreciate the risks created by record U.S. deficits, tariffs and international tensions.

Dimon, the veteran CEO and chairman of the biggest U.S. bank by assets, explained his worldview during his bank’s annual investor day meeting in New York. He said he believes the risks of higher inflation and even stagflation aren’t properly represented by stock market values, which have staged a comeback from lows in April.

“We have huge deficits; we have what I consider almost complacent central banks,” Dimon said. “You all think they can manage all this. I don’t think” they can, he said.

“My own view is people feel pretty good because you haven’t seen effective tariffs” yet, Dimon said. “The market came down 10%, [it’s] back up 10%; that’s an extraordinary amount of complacency.”

Dimon’s comments follow Moody’s rating agency downgrading the U.S. credit rating on Friday over concerns about the government’s growing debt burden. Markets have been whipsawed the past few months over worries that President Donald Trump‘s trade policies will raise inflation and slow the world’s largest economy.

Dimon said Monday that he believed Wall Street earnings estimates for S&P 500 companies, which have already declined in the first weeks of Trump’s trade policies, will fall further as companies pull or lower guidance amid the uncertainty.

In six months, those projections will fall to 0% earnings growth after starting the year at around 12%, Dimon said. If that were to happen, stocks prices will likely fall.

“I think earnings estimates will come down, which means PE will come down,” Dimon said, referring to the “price to earnings” ratio tracked closely by stock market analysts.

The odds of stagflation, “which is basically a recession with inflation,” are roughly double what the market thinks, Dimon added.

Separately, one of Dimon’s top deputies said that corporate clients are still in “wait-and-see” mode when it comes to acquisitions and other deals.

Investment banking revenue is headed for a “mid-teens” percentage decline in the second quarter compared with the year-earlier period, while trading revenue was trending higher by a “mid-to-high” single digit percentage, said Troy Rohrbaugh, a co-head of the firm’s commercial and investment bank.

On the ever-present question of Dimon’s timeline to hand over the CEO reins to one of his deputies, Dimon said that nothing changed from his guidance last year, when he said he would likely remain for less than five more years.

“If I’m here for four more years, and maybe two more” as executive chairman, Dimon said, “that’s a long time.”

Of all the executive presentations given Monday, consumer banking chief Marianne Lake had the longest speaking time at a full hour. She is considered a top successor candidate, especially after Chief Operating Officer Jennifer Piepszak said she would not be seeking the top job.

Finance

Stocks making the biggest moves midday: UNH, TSLA, BABA

Published

14 hours ago

May 19, 2025

Business Finance News

Finance

Klarna doubles losses in first quarter as IPO remains on hold

Published

18 hours ago

May 19, 2025

Business Finance News

Sebastian Siemiatkowski, CEO of Klarna, speaking at a fintech event in London on Monday, April 4, 2022.

Chris Ratcliffe | Bloomberg via Getty Images

Klarna saw its losses jump in the first quarter as the popular buy now, pay later firm applies the brakes on a hotly anticipated U.S. initial public offering.

The Swedish payments startup said its net loss for the first three months of 2025 totaled $99 million — significantly worse than the $47 million loss it reported a year ago. Klarna said this was due to several one-off costs related to depreciation, share-based payments and restructuring.

Revenues at the firm increased 13% year-over-year to $701 million. Klarna said it now has 100 million active users and 724,00 merchant partners globally.

It comes as Klarna remains in pause mode regarding a highly anticipated U.S. IPO that was at one stage set to value the SoftBank-backed company at over $15 billion.

Klarna put its IPO plans on hold last month due to market turbulence caused by President Donald Trump’s sweeping tariff plans. Online ticketing platform StubHub also put its IPO plans on ice.

Prior to the IPO delay, Klarna had been on a marketing blitz touting itself as an artificial intelligence-powered fintech. The company partnered up with ChatGPT maker OpenAI in 2023. A year later, Klarna used OpenAI technology to create an AI customer service assistant.

Last week, Klarna CEO Sebastian Siemiatkowski said the company was able to shrink its headcount by about 40%, in part due to investments in AI.