The Due Diligence logo

One Swiss finance thing to start: UBS is “the great white shark” of global banking, according to the people of the bucolic Italian-speaking enclave of Ticino.

At the region’s carnival on Sunday, a float depicting local hero and UBS chief executive Sergio Ermotti riding a giant shark devouring foundering sailors kitted out in vintage Credit Suisse ski hats won first prize. 

The apparent interpretation was a direct challenge to Ermotti’s frequent pleas that UBS’s capture of Credit Suisse last year should not be seen as the “deal of the century”.

But at least Ermotti could see the funny side. “At this time of year, almost any form of jokes and satire are allowed and welcomed,” he told his followers on LinkedIn. We share this photo special for our readers.

A carnival float in Tinico, Switzerland, depicting UBS CEO Sergio Ermotti riding a giant shark devouring foundering sailors kitted out in vintage Credit Suisse ski hats
A carnival float in Tinico, Switzerland, depicting UBS CEO Sergio Ermotti on a giant shark devouring sailors dressed in vintage Credit Suisse ski hats © Chiara Zocchetti/CdT

Welcome to Due Diligence, your briefing on dealmaking, private equity and corporate finance. This article is an on-site version of the newsletter. Sign up here to get the newsletter sent to your inbox every Tuesday to Friday. Get in touch with us anytime:

In today’s newsletter:

  • CVC’s co-founder steps down

  • How the Issa brothers finance their jets

  • ConocoPhillips’s shale hunt

CVC’s deal junkie bows out

Donald Mackenzie, one of the buyout industry’s most famous dealmakers, yesterday called time on a more than three-decade-long career atop one of Europe’s biggest private equity firms. 

His departure from CVC Capital Partners is the latest in what appears, at least to outsiders, to be a somewhat orderly transition of power. Another co-founder, Steve Koltes, stepped down a couple of years ago, leaving a largely new group of dealmakers to take over the running of the firm.

The move ends Mackenzie’s reign at CVC during which he helped build the firm from scratch into an investment giant with €188bn in assets encompassing private equity, credit and infrastructure, among others. 

The Scotsman was known for taking an uncompromising attitude to pretty much anyone that crossed his path, with one longtime CVC backer recalling how Mackenzie once admonished his own investors for being late to a meeting with him.

Described by a colleague as a “deal junkie”, he put his addiction to good use, helping CVC develop a near-unsurpassed reputation for making money. The deal that cemented his legendary status was the firm’s takeover of racing company Formula One.

He helped woo F1’s then-chief executive Bernie Ecclestone over lunch in 2005, before a series of fraught negotiations that involved the unlikely duo calling up notorious investment banker and former RBS chief Fred Goodwin on the fly to see if he’d finance a deal. 

After a rocky ownership period, which included Mackenzie having to appear as a witness in a German bribery trial, CVC sold the company a decade later for $8bn, earning many times its initial investment. 

Alongside his flair for buying and selling businesses, Mackenzie also oversaw CVC’s growth from UK buyout shop to global asset management company. As former rivals such as Charterhouse and Doughty Hanson fell by the wayside, CVC continued to grow at pace. 

In 2021, the company sold a stake in itself to specialist finance group Blue Owl in a deal valuing CVC at €15bn. 

The company also began making plans to go public, following US peers such as Blackstone and KKR, in a move that would help Mackenzie and other co-founders cash out. 

Uncharacteristically, CVC’s timing was bad. Russia’s full-scale invasion of Ukraine put paid to the first attempt, while conflict in the Middle East played a role in delaying their second. 

Mackenzie will remain on CVCs board as a non-executive director and focus on his “private interests”. If this involves investing his own wealth, then he will probably continue to be busy.

The billionaires borrowing from their company to pay their private jet loans

Longtime DD readers might recall our item back in 2022 explaining how Mohsin and Zuber Issa got their hands on tens of millions of euros in interest-free, unsecured loans to help them buy two private jets. 

The billionaire brothers, for the unacquainted, own the UK supermarket chain Asda and the petrol stations giant EG Group alongside private equity firm TDR Capital.

The generous lender to the brothers was none other than EG itself. (Bank of America also lent them money for the planes, but as you’d expect from a bank, it demanded interest payments and security over the jets.) 

Well, we have an update. It turns out, the brothers — via two Isle of Man companies — have been borrowing millions of dollars of fresh cash from EG to pay the interest and principal on third-party loans with which they bought the jets, DD’s Kaye Wiggins reports.

EG did not disclose how much interest it is charging the brothers’ companies. It only said it was “comparable to the average commercial rate of interest”.

A person with knowledge of the matter said the Isle of Man companies, through which the brothers own the jets, were using the fresh cash to repay external debt to third parties.

They own two Bombardier planes, one of which is advertised as being ideal for transporting heads of state.

As we wrote the story in 2022, people with knowledge of the situation told us EG’s generous terms had recently been flagged as part of an audit, and the brothers were going to start paying backdated interest as a result. 

EG received $8mn from them in interest that year, filings show. As it happens, that’s just $1mn more than the $7mn it handed them in new loans. We hope this graphic, from the story, makes it all completely clear. 

Issa brothers flowChart

Who will ConocoPhillips try to buy? 

Who will make the next move? That’s the question most oil and gas dealmakers are thinking about as the industry experiences rapid consolidation. 

The most obvious answer is ConocoPhillips, which was beaten by Diamondback Energy this weekend in the $26bn race to snap up Endeavor Energy Resources. What’s less clear is who could be the next target. 

Conoco’s interest in Endeavor is a clear indicator that the Houston-based group wants to put its hand on assets in the Permian Basin. It also indicates that the company with a market capitalisation of about $130bn wants to bulk up. 

Who are the potential targets? 

Dealmakers in Texas told DD that the top target for Conoco could be Devon Energy, which has a strong Permian presence and a market value of $27bn and fits its aspirations of going big. 

The problem with Devon is that it has its own ambitions of being a buyer. Reuters reported — and DD has confirmed — that Devon has approached Enerplus, which has a market value of $3bn.  

The next sizeable possibility could be Marathon Oil, which is trading at a $13bn valuation. Interestingly, there is speculation that Marathon and Devon could thwart any Conoco approach by combining with each other, but there’s nothing active yet. 

If it fails to pull off a mega-deal, Conoco could go after the likes of Apache ($9bn market cap) and Matador Resources ($7bn market cap).  

What’s clear is that the pressure is on Conoco to get a deal done before it is left without an option. In fact, if it doesn’t move quickly it could end up being the next target of ExxonMobil or Chevron.

To figure out what might happen next in the Permian, read the latest deep-dive of the FT’s Myles McCormick, who looks at how things might shape up.

Job moves

The head of Macquarie’s booming commodities business Nick O’Kane, who was paid 75 per cent more than the Australian financial group’s own chief executive last year, is to leave this month after almost three decades.

Skadden has hired James Danly, a former commissioner of the Federal Energy Regulatory Commission, as a partner and head of its energy regulatory group.

BlackRock is reorganising its group that deals with governments, central banks and very large investors such as sovereign wealth funds: 

  • Charles Hatami, who heads the financial and strategic investors group, will focus on relationships with SWFs. 

  • Ben Leax, his newly named deputy, will add a focus on insurance clients while continuing to head its consulting arm, known as Financial Markets Advisory. 

  • Brandon Hall, former FMA co-head, will become deputy chief operating officer.

Smart reads

Fashion victim Chinese online marketplace Temu is scooping up manufacturers of cheap goods that had once worked with Shein, as its fast-fashion rival moves to clean up its supply chain ahead of a planned blockbuster US listing, the FT reports. 

Hidden threat B. Riley Financial is under fire for funding a buyout linked to a firm that prosecutors call a fraud, The Wall Street Journal writes. 

Bold currency bet When Alaska Air proposed a merger with the parent of Hawaiian Airlines in December there was one factor that may have been overlooked: the asymmetric yen trade

News round-up

Arm’s an AI stock now. When’s the crash? (Alphaville) 

How big a hypocrite is Norway on energy matters? (FT Energy Source) 

Yodel to be sold off in latest unwinding of Barclay family interests (FT) 

Airbnb plans $6bn in new share buybacks as it looks to ‘reinvent’ itself (FT) 

Abrdn shareholder sold out after losing confidence in management (FT)

Barclays boss needs more than tweaks to regain shareholder trust (FT)

Due Diligence is written by Arash Massoudi, Ivan Levingston, William Louch and Robert Smith in London, James Fontanella-Khan, Ortenca Aliaj, Sujeet Indap, Eric Platt, Mark Vandevelde and Antoine Gara in New York, Kaye Wiggins in Hong Kong, George Hammond and Tabby Kinder in San Francisco, and Javier Espinoza in Brussels. Please send feedback to

Recommended newsletters for you

FT Asset Management — The inside story on the movers and shakers behind a multitrillion dollar industry. Sign up here

Unhedged — Robert Armstrong dissects the most important market trends and discusses how Wall Street’s best minds respond to them. Sign up here

Copyright The Financial Times Limited 2024. All rights reserved.
Reuse this content (opens in new window) CommentsJump to comments section

Follow the topics in this article