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(Bloomberg) — For some wearing 1880s robber baron attire at the Met Gala, the outfit was a part of a fantasy carrying out the “Gilded Glamour” dress code.

For Steve Schwarzman, it fit. Blackstone Inc.’s chief executive officer donned a top hat, white tie and cane next to his wife, Christine, in a gold gown with her hair up.

The couple teased they were Mr. and Mrs. Russell from the Julian Fellowes series “The Gilded Age” — characters perhaps they understand more than most, having ascended to wealth and stature themselves. There they were, at a party for 400 guests — the same number that fit, or were allowed in, to Caroline Astor’s ballroom in the late 1800s.

On Monday night, it was Anna Wintour’s list and ball, at a benefit for the Costume Institute at the Metropolitan Museum of Art, featuring a new exhibition about America’s fashion legacy. 

Whether or not the number of guests was a symbolic reference to Astor’s list, the event couldn’t help but be a 21st century statement on privilege and power, carefully curated for broad public consumption.

The screams from people lined up on sidewalks on Fifth Avenue came for the Kardashians, Sarah Jessica Parker, Kerry Washington, Cardi B, Janelle Monae and Kieran Culkin. The Schwarzmans went barely noticed, and their names weren’t on the list of expected guests handed to press.  

Sam Bankman-Fried, the billionaire founder of crypto exchange FTX, had his name on the list. But it was FTX’s new head of fashion and luxury partnerships, Lauren Remington Platt, who took the role of brand ambassador on the red carpet, wearing a custom-made necklace inspired by the FTX logo.

“The fashion world is one I know well, and one that needs to learn more about crypto,” Remington Platt said in explaining their presence.

Also, she added, Bankman-Fried wants to use his wealth to improve the world, and he’s interested in spreading his philosophy. He recently teamed up with Met Gala veteran model Gisele Bundchen on a campaign rooted in that message. 

Even though he’s known for wearing cargo shirts and T-shirts. 

“Sam has a very strong fashion sense,” Remington Platt said. “Most importantly, he’s authentic to himself.”

Elon Musk, meanwhile, seemed comfortable in an outfit that reminded him of that other Fellowes hit about a British aristocratic family.

“I basically dressed like I’m from Downton Abbey or something,” Musk said. But he was wearing an American designer: Tom Ford, according to his mother, Maye Musk, a model and his date for the night. “He bought it, he doesn’t borrow, he’s not a model,” she said. (She wore Dior couture and Chopard jewelry.)

As for the trend of putting messages on clothing, Musk said “it’s hard not to get behind” what New York City Mayor Eric Adams had on the back of his jacket: “End Gun Violence.” 

He had more to say about the “Tax the Rich” message that Alexandria Ocasio-Cortez wore at September’s edition of the event.

“Oh, is that what it said? I had trouble actually reading it,” he said, laughing. “It was sort of wrapped around — something ich?” (He would later tweet a similar joke.)

As for the actual message: “I’ve paid the most taxes that any human being has ever paid, on earth last year, so it’s like ‘OK,’” Musk said. “It’s not like I’m not paying taxes.”

“The government is not awesome at spending money, generally speaking, but I’m not someone who thinks the government shouldn’t be around,” he added. He only wishes it functioned more like the private sector, with “companies competing to do the best job for the consumer.”

Which brings us to Twitter, the company he’s agreed to buy for $44 billion and take private. 

“I want to make it as inclusive and interesting and entertaining as possible, and broaden the audience,” he said. As far as his views on free speech, “someone could certainly go and say anything they want in Times Square right now, but that doesn’t mean that you give them a giant megaphone and access to 100 million people.” 

The Met Gala, of course, is itself a megaphone. The message this year was crowd-pleasing.

“It’s quite a good time. It’s a very positive vibe,” Musk said. “It’s a celebration of style, and I think especially after the pandemic people want something exciting and glamorous — and that’s this.”

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(Bloomberg) — Elliott Investment Management, which manages funds that have about a $1 billion investment in Western Digital Corp., sent a letter to the board calling on it to conduct a full strategic review of the value that could be created by separating its two vastly different businesses: hard disk drives and Nand flash memory.

Western Digital has underperformed — operationally, financially and strategically — as a result of the challenges of running both businesses as part of the same company, according to a statement from Elliott on Tuesday. In the letter, Elliott argued that a separation of the flash business would allow both businesses to be more successful and create significant value, which could send Western Digital’s stock above $100 a share by the end of 2023. Western Digital’s shares jumped as much as 16% on the news to $62.32 in New York.

In addition to its public investment in Western Digital, Elliott is also offering more than $1 billion of incremental equity capital into the flash business at an enterprise value of $17 billion to $20 billion to be used either in a spinoff transaction or as equity financing in a sale or merger with a strategic partner. 

Western Digital, based in San Jose, California, is manufacturing partners with Kioxia Holdings Corp. of Japan and together they are one of the largest producers of the flash memory that provides storage in phones and computers. Semiconductor makers have struggled to keep up with a surge in demand, causing shortages that are hobbling industries across the economy. Flash memory is an essential component of many electronic devices, where it has replaced magnetic disks as the main storage of data. Everything from Apple Inc.’s iPhones to electric cars and supercomputers relies on the chips. 

“We agree that Western Digital is an excellent, yet undervalued, company with strong positions in our flash and HDD businesses and look forward to engaging with Elliott to discuss their views,” the company said in a statement responding to Elliott’s letter. The board has explored a range of options to unlock and deliver long-term value, Western Digital said, and “will carefully consider Elliott’s ideas.”

Last week Western Digital reported adjusted earnings per share for the third quarter that beat analyst estimates. The results helped dispel concerns over the impact of Covid-related lockdowns in China, which are weighing on the hard disk drive business, as well as worries about the contamination of materials at some of its factories in Japan.

(Updates with comments from company in the fifth paragraph.)

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(Bloomberg) — Wall Street trading powerhouse Jane Street, known for its dominance in markets such as exchange-traded funds and corporate bonds, is turning to decentralized finance to borrow crypto.

The New York-based company is going to initially borrow up to $25 million in USDC, a stablecoin pegged to the U.S. dollar, with plans to scale up to $50 million. It will borrow from crypto firm BlockTower Capital and will do so through Clearpool, a DeFi marketplace where institutions can get uncollateralized liquidity from a network of lenders. Launched on the Ethereum blockchain in March, Clearpool is backed by global investors including Sequoia Capital and Arrington Capital. 

This is the first time Jane Street is using decentralized finance to borrow crypto, a representative confirmed. They declined to comment on why the firm is doing so and how it’ll use the funds. They also declined to comment on whether the firm has borrowed crypto before.

“This is the first traditional financial institution on Wall Street that has made this step — this almost opens the floodgates,” Robert Alcorn, chief executive officer of Clearpool, said in an interview. “Others are going to go from watching this space to considering it seriously.”

Clearpool has spoken with dozens of traditional Wall Street companies and has “high single digits of traditional financial institutions that are almost ready to go” and start using the service, he added.

Crypto-focused firms such as Alameda Research already use similar services by Maple Finance and TrueFi to borrow or lend capital. These services allow users to adhere to know-your-customer and anti-money-laundering requirements, unlike most other DeFi marketplaces. Users may also be able to borrow at a lower rate with these services. 

Lenders in such DeFi protocols typically earn 15% to 25% in annualized interest, Sanat Rao, a general partner at BlockTower Capital. He declined to cite the rate BlockTower will receive.

“One of the new things we started doing is what we call real-world lending,” Rao said in an interview. “We are basically taking crypto capital and lending it to someone who is not directly in the crypto space. It’s a brand-new use case.”

Clearpool offers lenders yields which are enhanced through a rewards mechanism and paid in the protocol’s native token CPOOL. Recipients can stake their tokens, which effectively puts them into special wallets, to earn additional yields.

This is not the first time Jane Street is showing interest in DeFi. The firm backed Bastion, a lending project, in March. And last year, it began contributing market data to Pyth Network, a provider of verifiable data for DeFi. 

The company sees crypto trading as a growth area. It’s been executing crypto trades since 2017 and is one of the market makers powering Robinhood Markets Inc. customers’ free crypto trades.

(Updates with additional context and Jane Street’s comments.)

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(Bloomberg) — Apple Inc. has recruited a longtime Ford Motor Co. executive who helped lead safety efforts and vehicle engineering, a sign the iPhone maker is again ramping up development of an electric car. 

The tech giant hired Desi Ujkashevic for the car project, according to people with knowledge of the matter. Ujkashevic had worked at Ford since 1991, most recently serving as its global director of automotive safety engineering. Before that, she helped oversee engineering of interiors, exteriors, chassis and electrical components for many Ford models. 

The executive worked on Ford’s Escape, Explorer, Fiesta and Focus models, as well as the Lincoln MKC and Aviator, according to her LinkedIn profile. She also helped develop new electric vehicles for the Dearborn, Michigan-based automaker. And Ujkashevic has experience dealing with regulatory issues, something that will be key to Apple getting a car on the road.

The Cupertino, California-based company declined to comment on the hire. Ford, meanwhile, said that Ujkashevic has retired from the automaker. 

Enlisting Ujkashevic suggests that Apple is continuing to push toward a self-driving car despite several high-profile departures over the past year. The project’s management team has been almost entirely replaced since it was run by Doug Field, an executive who left for Ford last year.

Building an electric, self-driving car is seen as a “next big thing” for Apple — a new product category that can keep its sales growth from stalling. But the project has suffered numerous strategy shifts and personnel changes since it kicked off around seven years ago.

Turnover has been especially heavy over the past year. Besides the departure of Field, Apple lost key managers in charge of hardware engineering, robotics and sensors. In some cases, high-ranking engineers left to join flying taxi startups. 

After Field quit, the company appointed Apple Watch and health software head Kevin Lynch to oversee the project. Lynch is a well-regarded software engineering manager but hasn’t previously led the development of a vehicle. Still, the company has sought to accelerate the project under Lynch — with the goal of announcing a product by 2025. 

An Apple car would put the company in competition with Tesla Inc. and Lucid Group Inc., as well as traditional automakers racing to introduce electric vehicles. Ford has been particularly aggressive in EVs lately with a push to electrify the best-selling vehicle in America: the F-150 pickup. 

Apple also is trying to master autonomous driving as part of the project — an auto-industry holy grail that tech companies such as Alphabet Inc.’s Waymo also have been grappling with.

Over the years, Apple has struggled to settle on a vision for its car, which has been in development since around 2015. The current hope is to make something fully autonomous and remove both the traditional steering wheel and pedals. The company also has sought to emphasize safety with its vehicle.

To that end, the company is looking to develop stronger safeguards than what’s available from Tesla and Waymo. That includes building in plenty of redundancy — layers of backup systems that kick in to avoid safety and driving-system failures — Bloomberg reported last year. Ujkashevic could be involved with that component. Apple had hired Jaime Waydo to serve as car safety leader in 2018, but the Waymo veteran departed last year. 

Ujkashevic is now one of the few senior managers on Apple’s car team to come from the auto industry, but there are some others. Last year, Apple hired Ulrich Kranz, a former BMW executive and onetime head of self-driving startup Canoo. Stuart Bowers, a former Tesla executive who worked on self-driving software, and Jonathan Sive, an ex-manager at Tesla, Waymo and BMW, also are involved.

At Ford, Ujkashevic was one of the company’s highest-profile managers, serving as a named executive on its website.

“Desi has a wealth of global automotive industry leadership experience,” her biography reads on the Ford website. The company credited her with improving products, quality and the customer experience at the 118-year-old company.

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(Bloomberg) — Rockwell Automation Inc., a provider of control devices and software for industrial automation, fell the most in more than two years as it blamed supply-chain snags for crimping sales and profit. 

Since January, “we’ve seen supplier push-outs and de-commits for electronic component shipments, the impact of unexpected Covid-related shutdowns in China, and Russia start a war in Ukraine,” Chief Executive Officer Blake Moret said on a conference call with analysts to discuss earnings. 

With the challenges piling up, Rockwell Automation on Tuesday slashed its profit expectations. The company now forecasts adjusted earnings for the fiscal year ending in September of $9.20 to $9.80 a share, down from a prior outlook of as much as $11.10. It also lowered its sales guidance.

While investors were expecting a cut, “the reduction was greater than expected,” said John Walsh, an analyst with Credit Suisse, in a note to clients.

What Bloomberg Intelligence Says:

“Cost inflation and component shortages, primarily electronic chips, appear to have outpaced Rockwell Automation’s expectations, resulting in an earnings miss and guidance downgrade. Visibility on supplies is low, evidenced by the poor performance of the hardware-dominant Intelligent Devices segment, which went from outsized sales growth in fiscal 1Q to a decline in 2Q.”

— Mustafa Okur, BI industrials industry analyst

Click here to read the research.

The reduced forecast weighed on shares even as Rockwell Automation recorded a 37% jump in orders during its second quarter and record backlog of pending projects. There’s “broad-based demand growth across industries, geographies and offerings,” Moret said. The competition between heightened demand and supply pressure has been called out recently by companies as varied as Apple Inc., General Electric Co. and Harley-Davidson Inc.

Rockwell Automation’s shares tumbled as much as 16% in New York, the largest intraday drop since the early days of the pandemic in March 2020. Rockwell Automation had slumped 28% this year through May 2 while the S&P 500 Index declined 13%.

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(Bloomberg) — It’s the first day of speakers at the Milken Institute Global Conference in Los Angeles, which brings together everyone from dealmakers to celebrities as it returns to its pre-pandemic spring schedule.

The famed gathering, in its 25th year, has outlined its focus as the power of connection, celebrating “the forces that bring us together while confronting the issues that keep us apart.” It’s a fitting theme for a world jolted by war in Ukraine just as the highest inflation in decades raises the specter of recession and the dregs of a global pandemic refuse to disappear.

Speakers including Ark Investment’s Cathie Wood, Goldman Sachs Group Inc.’s David Solomon and General Motors Co. CEO Mary Barra will address the crowds, with academics, sports stars, entrepreneurs and politicians among the thousands set to gather this week at the Beverly Hilton.

Whalen of TCW Says Firm Is Decreasing Risk (7:23 p.m. ET) 

Asset manager TCW is paring back risk in the face of growing economic and geopolitical risks, according to Bryan Whalen, the firm’s co-chief investment officer for fixed income. 

“We are back to 2019 playbook,” Whalen, who helps oversee over $225 billion of fixed-income assets at TCW, said on a panel at the Milken conference. “We are getting defensive.”

Within credit markets, the firm finds agency mortgages attractive and sees opportunities in junk bonds that are trading at deeply discounted prices, especially when investors can benefit from corporate events such as acquisitions that repay the debt at par, Whalen said. 

Lemkin of Canyon Partners Sees ‘Changing of the Guard’ Out of High-Yield Bonds (6:13 p.m. ET) 

Investors are leaving high-yield bonds and looking for other opportunities in credit, according to Todd Lemkin, chief investment officer of Canyon Partners. 

“It is poetic justice to us,” Lemkin said on a panel during the conference. “Funds are going to start flowing into alternative credit and alternative investments.”

Lemkin described the shift in sentiment among investors as “a bit of a changing of the guard.”

Lemkin also said that Canyon Partners is “very cautious” about investing in China at the moment. The country’s economy has rapidly slowed, and Lemkin feels that the nation “has really lost its way.” 

“We are not rushing in there to buy,” he said.

More Milken Coverage: Takeaways from Cathie Wood, Brian Armstrong remarks

Apollo’s Zelter Says Higher Rates Will Slow Growth (4:50 p.m. ET) 

A U.S. recession “has to be” one-third to two-thirds of an investment base-case scenario, Apollo Global Management Co-President James Zelter, said in an interview with Bloomberg Television on the sidelines on the Milken conference.

It looks like higher interest rates will slow down the economy, he said. A recession would be driven by financial conditions rather than led by consumers, he added.

Read More: End of easy money heralds financial shock

Zelter said his firm is targeting a part of the private credit market that focuses on how the financial system operates such as inventory, transport and real estate finance.

 “That is arguably a $40 trillion opportunity,” he said. He noted that most people think about private credit as the sponsor market, which is only a $5 trillion to $10 trillion opportunity.

Carlyle’s Bernasek Sees a Pause for U.S. Buyout Deals (4:50 p.m. ET)  

Brian Bernasek, co-head of U.S. buyout and growth at private equity giant Carlyle Group Inc., said there’s very likely to be a pause on U.S. buyout deals as there was during the first six to eight weeks of the year.

Still, there will be a lot of very good investment opportunities, Bernasek said Monday in an interview with Bloomberg Television on the sidelines of the conference.

“It has been a very good financing market,” particularly for the larger-scale firms, he said.

Qualcomm CEO Says Hybrid Work Is Here to Stay (4:50 p.m. ET) 

Cristiano Amon, the CEO of chipmaker Qualcomm Inc., said a hybrid form of working — part office, part remote — is here to stay post-pandemic, fueled by metaverse technologies that will allow people a sense of presence with their colleagues even when they’re not in the same room.

“Working from home drove a broadband transformation,” Amon said, making it possible to use more video and virtual reality than ever before. VR can make it possible for people in the same meeting to throw on goggles and enter the same virtual space. Then eventually, technology will augment our physical reality. 

“People will be in Zoom meetings in holographic form,” he added.

Citadel’s Griffin Says Fed Needs 4% Inflation This Year to Avoid Recession (3:50 p.m. ET)

The Federal Reserve will be able to ease off monetary tightening if inflation drops to 4% by year-end, Citadel founder Ken Griffin said. 

That “will give the Fed much more latitude in policy,” Griffin said Monday at the Milken Conference. But if it remains near or above the current 8.5%, the central bank “will have to the hit brakes pretty hard,” tipping the economy into recession.

The billionaire also highlighted the big disconnect in the labor market, noting there are twice as many job openings than unemployed people seeking work. That will put even more upward pressure on wages, further exacerbating inflation, he said. That the economy isn’t pulling more people off the sidelines of the job market is a “real problem,” he said.

Griffin also said cryptocurrencies are the “great hot spot” of debate within his Chicago-based firm, noting that most employees who are younger than he are big believers in digital assets.  

“They believe that cryptocurrency has an important role in the global economy as a means of facilitating payment,” said Griffin, who has previously expressed skepticism about the value of digital tokens. “These are really sharp people,” he added. “I have to live with the reality that an asset is worth what people perceive it to be worth.”

Corporate Bonds Starting to Look Attractive, Silver Rock’s Meyer Says (2:20 p.m. ET)

This year’s sell-off in corporate bonds has created attractive investment opportunities, especially if the Federal Reserve changes its policy stance in coming years, said Carl Meyer, CEO of credit firm Silver Rock Financial.

“You’ve got lots of bonds trading at 85, 90 cents on the dollar,” Meyer said Monday on a panel at the Milken Conference. “There’s real upside if the Fed were to pivot to dovish later this year. You have a chance to make a lot of money, whether in investment grade or high yield.”

The traditional 60/40 allocation between equities and bonds that has fallen out of favor recently due to low yields could also perform well in the current environment, Meyer added.

“If you think we’re heading for a recession, if you think the Fed is going to have to tame inflation and then go dovish, then maybe 60/40 is the way to go,” he said. “It’s going to serve as both a hedge and a way to make money in your portfolio.”

Shenkman Capital’s Slatky Says CCC Debt ‘Tough Place to Be’ (2:20 p.m. ET)

Shenkman Capital Management expects slowing growth coupled with sticky inflation to hurt the riskiest part of the U.S. high-yield corporate bond market.

“For the bottom end of the market, the CCC part of the market, in stagflation, that’s a really tough place to be,” Justin Slatky, the firm’s chief investment officer, said Monday at the Milken Conference.

The high-quality part of the junk market should be able to withstand stagflation, at least compared with other asset classes, he said. About 40% of the junk and loan market matures from 2024 to 2026 and volatility is likely to pick up as companies struggle with their Ebitda and valuations come down, he added.

“You are going to see bond prices move around quite dramatically, but you’ll probably still going to see default rates stay at a lower level,” he said.

Citi Traders Dealing With the Highest Volatility Since 2008 (1:45 p.m. ET)

Trading desks are dealing with volatility levels that markets haven’t seen in more than a decade, Citigroup Inc. CEO Jane Fraser said.

Traders are coping with inflation that is at its highest level in a generation and investors who are increasingly worried about the likelihood of a global recession, Fraser said Monday at the Milken Conference. As an example of volatility, she mentioned trading on Friday, when bonds sold off at the same time as equities. Normally, the two have an inverse relationship. 

“I remember the ’70s and ’80s, and I don’t remember days like that, and some of this is just very odd dynamics around supply and demand,” Fraser said. “When volatility is 2008 or 2009 levels, that’s telling you that no one knows what this is going to be.”

Emerging Market Indexes Should Split Into Baskets, PGIM’s Hunt Says (1:40 p.m. ET)

Emerging market indexes are too broad given disparities between different countries coming out of the Covid-19 crisis, PGIM CEO David Hunt said Monday at the Milken Conference.

“When you think about an index that has South Korea, China, Argentina, and until recently, Russia and Ukraine in it, and you say ‘I’d like to allocate to a basket like that,’ it sounds a little crazy,” Hunt said.

Hunt said PGIM is working with clients on investing approaches that break emerging markets up into different baskets, including a more-developed group, a commodities-related basket and one focused on those on the verge of being “very attractive economies.”

“The world will quite soon pull apart emerging-market indexes and we’ll see something a lot more tailored to the way that capital should be allocated,” he said.

Guggenheim’s Minerd Says Market Not Fed Should Find Neutral Rate (1:30 p.m. ET)

With the market focused on this week’s Federal Reserve meeting, where the central bank is forecast to raise the overnight lending rate by 50 basis points, Guggenheim Partners CIO Scott Minerd questioned the goal of the ebb and flow of monetary policy.

“We don’t know where the neutral and natural interest rate is” and never did, Minerd said Monday on a panel at the Milken Conference. “I’m a great skeptic that the Fed can figure out” where the rate should be to support full unemployment while keeping inflation steady. 

“Why don’t we just unpeg rates and let the market find the rate,” he said, adding that former Fed Chairman Paul Volcker took such an approach.  

Sovereign Funds ‘Look Past the Noise’ With Private Assets, Kapoor Says (1:08 p.m. ET)

Many sovereign wealth funds have increased their allocation to private assets, which have the benefit of being able to “look past the noise” and invest for the long term, Investcorp Holdings Co-CEO Rishi Kapoor said. 

Floating-rate loans have become very attractive to institutional investors, with base rates roughly equal to spreads in recent months, said Kapoor, who oversees the firm’s private equity business in North America and India. 

“You have effectively created the ability to double your absolute return on a portfolio of floating-rate loans, even compared to six months ago,” he said Monday at the Milken Conference. 

Guggenheim’s Minerd Says Recession Likely, But Not Until 2023 (1 p.m. ET)

The Federal Reserve may be leading the U.S. into a recession as it races to raise rates and get ahead of inflation, but probably not until end of 2023, Guggenheim CIO Scott Minerd said.

“We’ve never been able to reduce inflation by more than two percentage points in the U.S. historically without inducing recession,” Minerd said Monday at the Milken Conference.

The recession will likely not be too bad, he added, because the Fed will be able to pivot quickly. The only way the Fed would be able to avoid a recession is to “let markets find a natural rate.”

PGIM’s Hunt Sees Europe on the Brink of Recession (12:15 p.m. ET)

Wide-ranging sanctions on Russian energy exports could soon tip the European economy into a recession, PGIM Chief Executive Officer David Hunt said.

“We’re only one hydrocarbon sanction away from a recession starting,” Hunt said Monday on a panel at the Milken Conference.

A recession also looks likely for the U.S. if the Federal Reserve’s tightening path stays on the current track, he added, but probably not until 2024.

Apollo’s Rowan Is Preparing for ‘Volatile’ Future (Noon, ET)

Marc Rowan, the co-founder of Apollo Global Management Inc., said that the current market is the “logical conclusion” of 14 years of “money printing,” with the biggest correction likely to occur in growth and technology stocks.

“The world is desperate for safe yield,” Rowan, who is also Apollo’s chief executive officer, said Monday at the Milken Conference, adding that he’s a big fan of senior-secured credit and also likes floating-rate notes.

During a panel, Rowan also said he’s enthusiastic about financial-technology firms, many of which want to focus on fee generation but not on building their balance sheets. That’s where Apollo can come in.

“We’re going to see a revolution in financial services” in the coming decade, he said.

 

(Corrects spelling of name in fourth paragraph)

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(Bloomberg) — South Africa’s deployment of 10,000 soldiers to help with relief efforts in the two provinces hit by devastating floods last month will cost more than $30 million. South African National Defence Force members will work in KwaZulu-Natal, where more than 400 people died and landslides damaged roads and ports and washed away houses, …

Deployment of Army to South African Flood Areas to Cost $32 Million Read More »

(Bloomberg) — A gauge measuring South African manufacturing sentiment dropped the most in nine months in April after the worst flooding in almost three decades left more than 400 people dead, damaged businesses and halted operations at the nation’s biggest port.  Absa Group Ltd.’s purchasing managers’ index, compiled by the Bureau for Economic Research, dropped …

Manufacturers’ Mood Darkens After Deadly South African Floods Read More »

(Bloomberg) —

The U.K. government is considering policy changes to a popular program that provides preferential tax treatment for early-stage investments into tech companies, which could make it easier for companies to raise larger rounds of funding.

Talks among regulators about potentially expanding the Enterprise Investment Scheme and the Seed Enterprise Investment Scheme are in preliminary stages, according to people familiar with the matter, who asked for anonymity because the discussions are private.

A U.K. Treasury spokesperson said the government keeps all tax relief policies under review in order to ensure they meet policy objectives in a fair and effective way.

Both the EIS and SEIS incentivize individual investors to back new companies by offering significant tax relief. 

Under the SEIS today, for instance, a company can raise as much as 150,000 pounds ($188,000) from individual investors, who would then be able to receive a reduction on their income tax liability with favorable capital gains treatment. But some in the startup industry have advocated for a cap of 250,000 pounds, allowing companies to more easily raise early funds.

The U.K.’s departure from the European Union and accompanying restrictions on state aid allows for reforms such as this, the people said; one added that it’s more likely significant changes will be made to the SEIS rather than the EIS.

Since the EIS was launched in 1994, nearly 33,000 companies have netted a total of about 24 billion pounds in funds, U.K. government data show, and from SEIS’s start in 2012 to 2013, about 14,000 companies have received about 1.4 billion pounds.

In a February report from data platform Beauhurst and venture firm SFC Capital, it was argued that changes to the SEIS were needed to increase the number of early U.K. venture investments. 

“SEIS, as well as EIS, the tested and proven tools of investing in innovation, have to be reinvented, improved, and reinforced before it is too late,” the report’s authors concluded.

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(Bloomberg) — European Union patients will be allowed to move their health-care data across the bloc, part of a wide-ranging proposal unveiled by the European Commission.

The EU’s European Health Data Space aims to get citizens access to their e-prescriptions and health records online, according to an announcement from the European Commission on Tuesday. This system, to start by 2025, will be connected with all 27 EU member states, meaning people can travel around the EU and still access their health information.

Researchers and pharma companies will also get access to anonymized data to improve the development of medicines, including making personalized cancer treatments or using artificial intelligence. Regulators and policymakers could also get access to improve health policy decisions.

“With the European Health Data Space, we can harness the power of health data and stronger health research, with citizens in control of their data at all times,” Health Commissioner Stella Kyriakides said. “It will be a game changer for how we deliver healthcare and health solutions, always for the benefit of citizens and patients.”

The cost of creating the European Health Data Space will be between 700 million euros and 2.5 billion euros ($2.6 billion), according to an EU impact assessment seen by Bloomberg. The commission estimates that EU countries will spend another 12 billion euros to digitalize their health systems more broadly, according to an EU official.

Read More: The EU Wants A Central, Cross-Border Digital Health Space

The commission views the health data space proposal as an extension of the EU’s increasingly coordinated approach to health throughout the Covid-19 pandemic. This was most clear with the EU’s Digital Covid Certificate which allowed citizens to show their vaccination and recovery status to travel around the union and enter businesses.

But the commission could face hurdles convincing countries to sign on, as they have long been reluctant to share data across borders and have digitalized their systems to differing degrees. Under the proposal, EU countries will bear the brunt of digitalizing their health systems, which can be a time-consuming and often costly switch.

Some like Denmark provide health apps to citizens, and other EU countries like Finland and Estonia exchange health data across borders. However, many patients throughout the EU often can’t move their health data between health systems or regions within the same country because health systems rely heavily on paper records or systems cannot communicate with one another.

Lawmakers are also concerned about possible data breaches, especially with increasing cyber attacks on health systems in the EU. Tiemo Wolken, a Socialist German parliamentarian, wrote in a statement that data protection is of “paramount importance.”

“Patients must be able to fully trust the digital exchange of data, and highly sensitive personal health data must not fall into the wrong hands,” Wolken said. “In the coming weeks, we will now examine whether the Commission’s proposal meets these high requirements.”

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