Private equity firms sell assets to themselves at record rate

Good morning and welcome back. In today’s newsletter:

• Private equity groups sell assets to themselves at record rate

• Asia’s wealthy shift money to Switzerland

• Trump threatens strikes if Iran rebuilds nuclear programme

• US law firm associates set for $300,000 bonuses

We begin with private equity firms, which sold companies to themselves at a record rate this year, making use of a controversial tactic to hold on to assets as managers struggled to find buyers or list their investments.

What we know: Roughly a fifth of all private equity sales this year involved groups raising money from new investors to acquire businesses from their older funds, up from 12-13 per cent the previous year, said Sunaina Sinha Haldea, global head of private capital advisory at Raymond James.

Why it matters: Such transactions sell assets already owned by a private equity group to so-called continuation vehicles — newer funds also managed by the firm. The tactic enables private equity firms to return cash to investors in older funds, but has prompted concerns about potential conflicts of interest.

The use of the structure has boomed in recent years as buyout firms have struggled to secure the valuations they want from external buyers or public markets, choosing instead to hold on to investments in the hope of fetching more in the future. Read the full story.

Here’s what else we’re keeping tabs on today:

Five more top stories

1. Swiss private banks are expanding their Asia-focused teams onshore in Switzerland, after a sharp rise in referrals and inquiries from the region during the past two years. Bankers said Asian family offices and ultra-wealthy individuals were increasingly shifting their money to Switzerland.

2. Trump has threatened to launch fresh strikes against Iran if it is found to be rebuilding its nuclear programme, as the US president held talks with Israel’s Prime Minister Benjamin Netanyahu. He also said Hamas has a “very short period of time to disarm” in Gaza. Read the full story.

• More from Washington: Trump has said the US carried out an attack on a “dock area” in Venezuela, confirming that Washington had struck inside the country.

• Taiwan: China’s military has launched live-fire exercises around the island, as Trump played down the seriousness of the large-scale manoeuvres.

3. Mid-level lawyers at some US firms will be paid bonuses of more than $300,000 this month. The large payouts to associates highlight how competitive the legal market has become, with the best-paid lawyers now roughly on a par with their investment banking peers.

4. Ukraine’s President Volodymyr Zelenskyy called for a security guarantee lasting as much as 50 years, a day after a Florida summit with Trump that failed to make a breakthrough. He said Washington’s offer of a 15-year guarantee was not enough to deter Russia.

5. Former UK prime minister Tony Blair was urged to join the Eurozone by one of his advisers, who argued that the benefits within 30 years would be enough to cover the annual cost of the NHS, newly released official papers have shown.

Take part in a live Ask an Expert Q&A with Roula Khalaf, Editor of the Financial Times, on January 8. Submit your questions on what will shape 2026.

News in-depth

Euroclear, the central securities depository, has recently been thrust into the spotlight by the EU’s failed plan to use frozen Russian cash on its balance sheet to assist Ukraine. Laura Dubois takes a look at the Belgian company at the heart of a tussle over Moscow’s immobilised assets.

We’re also reading . . . 

• Mining ambitions: Rwanda is seeking to produce metals at a global scale and counter its reputation as a conduit for smuggled riches from the neighbouring Democratic Republic of Congo.

• Accounting’s status at risk: The US Department of Education has proposed to have it removed from a list of designated professions. The industry is pushing back, writes Stephen Foley.

• Year in a word — cockroaches: JPMorgan chief Jamie Dimon has given a deft summary of the bankruptcies that have rattled finance, writes Brooke Masters.

Charts of the year

Donald Trump’s “liberation day” tariffs spooked the bond markets and sent global boardrooms scrambling to rejig their supply chains. They also pushed up domestic prices of everyday items, hurting American consumers. In spite of his attempt to reshape its rules, the global trading system has proved to be resilient. Here is the year in world trade in charts.

Take a break from the news . . . 

One of the last people in Cairo who knows how to design and make a bespoke suit by hand is Samir El Sakka. At 89, he is the city’s oldest and most revered master tailor, and stands as perhaps the last living steward of his craft. From his atelier, he speaks of a vanishing world.