Hedge funds take Miami Beach

One scoop to start: SoftBank is in talks to invest as much as $25bn into OpenAI, in a deal which would make it the ChatGPT maker’s biggest financial backer, as the pair partner on a massive new artificial intelligence infrastructure project.

Another scoop: Barclays has tightened its work-from-home requirements, increasing its minimum days in office to three days a week. The move makes it the latest company to rethink its hybrid working policy since the end of the Covid-19 pandemic.

And another thing: Bonus season has the promise of even greater riches for City workers this year after British and US banks scrapped EU-imposed bonus caps — but how will yours measure up? Take the FT’s annual survey to help us find out.

In today’s newsletter:

Hedge fund bonanza in Miami Beach 

Nothing quite captures the zeitgeist on Wall Street in 2025 like your Uber driving talking about private credit and asset-backed finance.

That was how DD was greeted this week as we pulled away from the Miami International Airport en route to the Global Alts conference. The days-long bonanza in South Beach has become a popular destination for the world’s biggest investors and hedge fund managers to beat New York’s brutal winter.

Fleece vest-clad fundraising executives, allocators and dealmakers fanned out across the city’s Fontainbleau Hotel, the Ritz-Carlton and Nobu to attend a busy schedule of meetings and parties.

Many managers compared the week to speed dating. It’s a chance to try to win capital from potential limited partners, including family offices, pension funds and retirement plans. But the meetings are often limited to just 20 minutes, meaning stamina is key.

It was a rough start to the week. Investors descended on Miami amid a market rout that gripped tech and energy stocks on the heels of DeepSeek’s debut on the world stage.

As DD’s Amelia Pollard took off on one of the first flights out of New York on Monday morning, the plane was filled with a sea of screens turned to CNBC, eyes glued to tickers all in the red.

Yet on Tuesday — as Nvidia recovered a bit from its 17 per cent drop the prior trading day — the mood lightened, and the biggest themes of the year began to percolate.

“Interval funds” was the big buzzword. These are a relatively new creation of funds that are more widely available to retail investors. (Financial giants such as Blackstone helped popularise them.)

The arrival of Donald Trump in the White House is giving a new boost to the fund structure, with many on Wall Street hoping for a softer regulatory regime.

Aside from the lucrative fund structure, though, conversation drifted towards the White House and how a number of potential policies could impact the market this year.

There was a physical presence hailing from Camp Trump, too. Elon Musk’s brother Kimbal Musk made an appearance, as did Vivek Ramaswamy — formerly of the new Doge agency and now “highly likely” running for Ohio governor.

Vivek’s message to the audience? “More people who have a successful track record in business should pursue public service for limited periods of time,” he said. “And then go back to being a capitalist or whatever it is one wants to do.”

Mistral: stuck in a start-up limbo

After a week that seems to have blown up many investors’ assumptions about the artificial intelligence race, January 2024 feels like an eternity ago.

At last year’s World Economic Forum, all the buzz was around Mistral, a hot French start-up that had created a world-class AI model with a fraction of the budget of OpenAI or Anthropic.

But this year, Davos was wowed by China’s DeepSeek, which made an even better model for an even cheaper cost — beating Mistral at its own game.

The debate is still raging about whether DeepSeek did so legitimately after OpenAI told the FT it found evidence that the Chinese start-up used its proprietary models to bootstrap its rival.

But back in Paris, Mistral seems to be left in a start-up limbo.

Its $1.2bn in total fundraising and $6bn valuation seem both too much for it to go quietly into the sunset, and too little to keep up with US rivals OpenAI, Anthropic and xAI — who together have raised nearly $50bn as they hurtle towards “superintelligence”.

“They are starting to see the writing on the wall,” one Mistral investor told the FT. “They need to sell themselves.”

Davos Man is still pretty invested in Mistral’s success, as it’s currently Europe’s only AI company taking on OpenAI at its own general-purpose large language model game.

After all, this is a company that was nearly called EuroAI before it launched less than two years ago.

If Mistral were to fold its hand like Inflection or Adept and sell out to Big Tech in some contorted “acquihire” — as many VCs tell DD they believe it will — Europe loses its best hope of a seat at AI’s top table, as well as leverage against the Trump administration’s warmongering against Brussels’ tech regulators.

But as rumours swirl that someone such as Microsoft, Amazon or even SAP might scoop them up, Arthur Mensch, Mistral’s CEO, insists his company is not for sale.

“We think that what we are doing is important [to do] as an independent company,” he told the FT. “So this is not on the table.”

“Necessity is the mother of invention,” quips Mensch. But unless Mistral can pull something out of the bag by the time next year’s WEF rolls around, Europe’s hopes of AI sovereignty look fragile.

The war on the business traveller

This is no golden age for corporate road warriors, the mid- to upper-level business executives whose regular air travel once guaranteed distance from the unruly masses.

Credit card companies have paid up for access to airlines’ once-exclusive lounges to draw in millions to their high-interest cards, eating into the exclusiveness of being part of the air travel aristocracy.

The scourge of inflation, which has caused egg prices and tech stocks to soar, has also eroded the value of points stockpiled by corporate grunts.

Now, a consultant travelling across the US or Europe must queue up and elbow their way into airport lounges, only to find limited seating and an ever more unappealing assortment of rail liquor, prosecco and processed fare.

The FT digs into the symptoms of the declining exclusivity of air travel’s hierarchy in a Big Read.

Airlines carry razor-thin margins. On top of that, the act of herding millions through crowded security queues and on to airborne aluminium cans ultimately carries marginal differentiation. But credit card loyalty programmes are pure profit.

During the Covid-19 pandemic, companies such as Delta and American Airlines were kept afloat by borrowing against their loyalty cards programmes.

The FT reports that these programmes of the big three US airlines alone were worth $73.8bn in 2023, not far off from their collective market capitalisations of about $90bn.

In that sense, airlines have simply done what tech giants such as Meta did long ago: transform the customer into the product.

That’s something to chew on next time you’re behind sunburned travellers wearing flip-flops and cargo shorts on the lounge queue.

Job moves

• Jefferies has hired Tim Kerry as co-head of Emea leveraged finance, where he’ll work alongside Bala Ramesh, who is also head of debt capital markets for the region, a source told DD. Kerry joins from Barclays. 

• Private investment firm Antares Capital has hired Olga Kosters to lead its credit secondaries business. She joins from Apollo Global Management. 

• 17 Capital, a lender to private equity firms, has hired Aryeh Landsberg as a managing director. He joins from Barclays, where he worked on fund finance. The firm also hired Stephen Kosoris as an investor relations director from Russell Investments.

Smart reads

Billionaire’s conflict Questions swirl over whether billionaire Howard Lutnick’s pledge to unwind his significant holdings will be enough to avoid numerous conflicts of interest in the White House, the FT writes.

Soho House Dan Loeb, the founder of Third Point, is pushing back on what he calls a “sweetheart” buyout deal to take the members’ club Soho House private, The Wall Street Journal reports. Let the drama begin.

Trump’s orbit The establishment is by and large warming up to Trump as he begins his second tour in the White House, The New York Times writes. Case in point: elite law firm Sullivan & Cromwell is taking on the appeal of his criminal conviction.

News round-up

OpenAI says it has evidence China’s DeepSeek used its model to train competitor (FT)

Former SAP executive makes payment to end sexual harassment probe (FT)

‘The only winners are lawyers’: Heathrow braces for long journey to third runway (FT)

Record number of CEOs leave roles amid activist pressure, research shows (FT)

Executives who ran failed Amazon ‘aggregator’ sued over alleged sham business (FT)

Trump Media targets crypto investments with push into financial services (FT)

Sales drop at WHSmith’s high street stores as it looks for buyer (FT)

Lloyds Bank to shut another 136 branches across UK (FT)

Meta’s Mark Zuckerberg explores purchase of Washington, DC, property (FT)

KPMG UK partners enjoy record payday (FT)