Making Maga money

One scoop to start: Donald Trump’s social media company is in advanced talks to buy Bakkt, a cryptocurrency trading venue owned by Intercontinental Exchange, as it pushes to expand beyond online conversation.

And the latest from a mega-deal: Nippon Steel’s top executives are meeting local officials and workers of US Steel in Pennsylvania this week as the Japanese group makes a post-election push to build on-the-ground support for a $15bn takeover that has faced bipartisan political opposition.

In today’s newsletter:

• Raking it in from Trump’s White House 

• The biotech fund backed by Wall Street giants

• M&A with LeBron James’s media company 

The big windfalls from Donald Trump’s win

Some of the US’s wealthiest businessmen made a shrewd calculation: if you threw your weight behind Donald Trump when he was considered a pariah, the bet would pay off if he made it to the White House.

Peter Thiel, the uber contrarian early Facebook backer, was quick to support Trump in 2016, when many considered the real estate mogul’s presidential bid a sideshow. It has paid off in spades.

Thiel’s protégé, JD Vance, is now second in line to the most important job in the world. About a decade ago, Thiel began to support Vance, then a Yale-educated lawyer whose memoir Hillbilly Elegy had become a cocktail party sensation on the plight of rustbelt America.

After first hiring Vance and then pumping millions into his successful Senate bid, Thiel’s benefactor will play a vital role in Trump’s efforts to disassemble the regulatory state, a longtime pet project.

Thiel also has stakes in a portfolio of companies ranging from Anduril to Palantir that stand to thrive in the second Trump administration.

Others in Thiel’s orbit have seen even bigger financial gains. 

Elon Musk, a member of the PayPal mafia alongside Thiel, became Trump’s wealthiest and most vocal backer this election cycle, making a calculated, if risky, bet that Trump would return to office. 

X, the social media platform Musk acquired for $44bn, became a strategic asset for the Trump campaign and tilted rightward. Musk’s entire business empire has benefited.

The value of his electric-car maker Tesla has skyrocketed by more than $500bn since April lows. Two of his private companies — xAI and SpaceX — have had their private market values soar by tens of billions apiece in potential new deals. Musk’s wealth is up more than $100bn this year, according to Forbes.

Some on Wall Street were early to support Trump’s re-election effort after many had distanced themselves from the former president following the January 6 attacks on the Capitol. A few players are now jockeying for a big return on their investments.

Cantor Fitzgerald’s chief executive Howard Lutnick, a vocal Trump backer who co-heads his transition team, has been fighting an increasingly bitter battle against another early backer, hedge fund investor Scott Bessent, to become the next US Treasury secretary.

There are also other big trades on the line. 

Pershing Square founder Bill Ackman stepped on the Trump train earlier this year as he was working to raise a US-based fund that he told potential investors could benefit from his rising social media stardom. 

While the IPO of the fund was pulled, Ackman has seen his own Trump trade gain. His large holdings in government-backed housing agencies Fannie Mae and Freddie Mac have doubled since election day as traders bet the administration will end their government conservatorship, rising about 50 per cent above Ackman’s cost basis, DD calculates.

The financier has long said a bigger windfall awaits.

How to build a billion-dollar biotech fund

A tiny biotech venture capital firm led by 33-year-old managing partner George Petrocheilos isn’t your average fund.

Don’t let Catalio Capital’s $1.3bn size deceive you: its backers include a who’s who of Wall Street, including Orlando Bravo, Alan Howard, Stanley Druckenmiller and Henry Kravis.

Smarts and chutzpah took Petrocheilos a long way. His ascent began with cold calls to masters of the universe. After winning the confidence of financiers such as KKR’s Joseph Bae and Coatue’s Philippe Laffont, Petrocheilos has built a valuable Rolodex. 

But it hasn’t hurt that the father of Petrocheilos’s partner and Catalio co-founder Jacob Vogelstein is a famed geneticist. The elder Vogelstein, an accomplished scientist at Johns Hopkins University, allowed his son’s firm to incubate companies bearing some of his most promising ideas in cancer treatment — giving investors direct access to the pipeline in the process. 

Kravis, who co-founded KKR, is now the fund’s most vocal supporter and was the one to recruit Bravo as a backer, a source tells DD.

With Kravis’s guidance, Petrocheilos has also assembled a star-studded “board of advisers” that includes Alex Gorsky, the former chief of Johnson & Johnson, and Dina Powell McCormick, an ultra-connected former top Goldman Sachs executive who is now a partner at BDT & MSD.

“There is no one he won’t speak to,” Kravis said of Petrocheilos in an interview. “It is amazing how many people he has gotten to know over the years who adore him. They have given him money and they continue to give him more money.”

Investors have enjoyed promising early results. 

Catalio has returned more than $300mn to its limited partners, a rare feat in a tough market for venture bets. KKR recently purchased a minority stake in the group.

Despite only 24 biotechs having listed this year across the whole sector, six of Catalio’s companies, including Arrivent Biopharma and Septerna Therapeutics, have floated.

But the question remains how much Catalio can differentiate itself from a sea of other biotech funds — and whether their biggest windfalls can come from companies that aren’t tied to the co-founder’s father.  

LeBron’s media group expands

The entertainment industry may have just found the busiest boardroom in television history.

In a merger announced on Monday, The SpringHill Company and Fulwell 73 will bring together NBA star LeBron James and sports marketer Maverick Carter with some of the UK’s top production talent and a wide cast of Hollywood’s top financiers.

James and Carter both have achievements in conventional TV shows and films. Fulwell 73 has made shows such as The Late Late Show with James Corden — who is a co-owner — and The Kardashians; SpringHill has made The Wall and Million Dollar Mile.

But the real pitch behind the merger is about figuring out the future in assembling well-known content creators, such as sports and TV stars, and bringing their consumers directly to digital platforms, the FT’s Daniel Thomas reports. 

SpringHill already owns Uninterrupted, which provides a platform for athletes to produce their own content, and a branding agency that can amplify their impact.

That’s where the money’s also going. 

Between the two companies, they will have what Fulwell 73 co-owner and producer Leo Pearlman calls “a hell of a line-up” of investors. 

Among the group: Liverpool FC owner Fenway Sports Group, Nike, American businessman Todd Boehly, Epic Games, RedBird Capital Partners and Main Street Advisors.

The problem? Working out what the merged company will be called. 

SpringHill is named after the apartment complex where James was raised, while Fulwell 73 refers to a stand at Sunderland Football Club’s former stadium and 73 to the last time the English football club won a major trophy. Tough decisions await. 

“We’re trying to convince LeBron and Mav to ditch their Liverpool allegiance and become Sunderland fans with the rest of us,” Pearlman — one of the several Fulwell co-founders who support the football club — told the FT.

Job moves

• CVS Health has added four board seats in a deal with activist hedge fund Glenview Capital Management. The drugstore operator last month replaced chief executive Karen Lynch with longtime executive David Joyner.

• Clifford Chance has hired Vince Ferrito as a private equity partner, after the firm recently brought on David Schultz and Matthew Hinker. All three joined from O’Melveny.

• Perella Weinberg has hired Erik Maris for a senior role to expand its coverage of French and European clients. He previously worked for Advent International and Lazard.

Smart reads 

Minor offence Some companies take a hard ethical line by firing employees for minor offences, the FT writes. Some say the dismissals are a way to disguise cost savings.

Sit-down with Thiel Bari Weiss, founder of the publication The Free Press, sat down with Silicon Valley kingmaker Peter Thiel to talk about Donald Trump and the counter-elites’ tremendous comeback.

Priority boarding The budget airline Spirit Airlines filed for bankruptcy this week after a deal with JetBlue fell apart, Lex writes. Hedge funds and bond managers are willing to help the reorganised carrier get off the ground.

News round-up

Private equity buyers snap up two more US accounting firms (FT)

KKR and Bain’s $4bn takeover battle set to open up M&A in Japan (FT)

Departing Manulife CEO urges greater scrutiny of private equity deals (FT)

DOJ will push Google to sell Chrome to break search monopoly (Bloomberg)

Donald Trump picks Big Tech critic to head communications regulator FCC (FT)

Germany and Finland ‘deeply concerned’ about severed undersea cable (FT)

Samsung shares rise on ‘desperate’ buyback plan (FT)

Vanguard says shareholders can vote for profits over ESG issues (FT)