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Speaker 1: Good morning. It's Monday, the twenty second of January here

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Speaker 1: in London. This is the Bloomberg Daybreak Here at podcast.

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Speaker 1: I'm Caroline Hepki.

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Speaker 2: And I'm Stephen Carroll. Coming up today, Ronda Santis exits

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Speaker 2: the race for the White House as Trump cements his

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Speaker 2: Republican front runner status.

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Speaker 1: Germans hold mass protests to decry reported discussions of an

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Speaker 1: anti immigrant deportation plan that echoes Nazi policies.

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Speaker 2: Plus the broken broker business. We have a special report

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Speaker 2: on why London's listed firms are on the hunt for

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Speaker 2: new advisors.

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Speaker 1: Let's start with a roundup of our top stories.

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Speaker 2: Ronda Santis has pulled out of the US presidential race

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Speaker 2: and endorsed Donald Trump. His exit narrows the Republican field

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Speaker 2: to two ahead of the primary vote in New Hampshire tomorrow.

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Speaker 2: In a video announcing his withdrawal, the Florida governor attacked

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Speaker 2: Trump's remaining Republican rival.

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Speaker 3: Yes, my endorsement because we can't go back to the

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Speaker 3: old Republican guard of yesteryear. Are repackage formed of warmed

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Speaker 3: over corporatism that Nicky Haley represents, the days of putting

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Speaker 3: Americans last, of cow towing the large corporations of caving

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Speaker 3: to woke ideology are over to sounds.

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Speaker 2: His exit Marx stunning turnaround. Freman, who two years ago

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Speaker 2: was described as the future of the Republican Party.

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Speaker 1: Nikki Hayley, Donald Trump's other rival for the nomination, has

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Speaker 1: ramped up her attacks on the former president. Blim Begs

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Speaker 1: Ed Baxter has the story.

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Speaker 4: She is really focusing on Trump's mental acuity. She says,

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Speaker 4: he's not the same man now that he was when

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Speaker 4: she served in his cabinet.

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Speaker 5: So I always told him what I thought was in

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Speaker 5: the best interests of the country when I was in

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Speaker 5: his cabinet, But this is different. I mean, we're seeing

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Speaker 5: he's just not at the same level he was at

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Speaker 5: twenty sixteen. I think we're seeing some of that decline.

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Speaker 5: But more than that, what I'll say is focus on

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Speaker 5: the fact that no matter what it is, chaos follows him.

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Speaker 4: Trump has responded that he feels mentally stronger than he

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Speaker 4: did twenty five years ago. Ed Baxter.

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Speaker 2: Blueberg Radio Chris Helen's British tc Y fund Management made

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Speaker 2: more profit than any other hedge fund last year. Industry

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Speaker 2: estimates from LH Investments suggests the firm made an estimated

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Speaker 2: twelve point nine billion dollars j Bloomberg James Walcock has

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Speaker 2: the details.

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Speaker 6: Tci's success marks another good year for larger asset managers.

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Speaker 6: The top twenty hedge funds generated eighty three percent of

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Speaker 6: the gains made by all hedge funds over the past

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Speaker 6: three years. But bigger may not be better forever. Heavily leaved

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Speaker 6: bets and a crowded market have drawn the attention of

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Speaker 6: skeptical traders and regulators. Even Citadel's Ken Griffin acknowledged the

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Speaker 6: risk at the Bloomberg New Economy Forum in November. I

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Speaker 6: definitely don't think the word systemic applies.

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Speaker 4: I think could you see the multimanagers hedge funds take

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Speaker 4: a joint ten fifteen to twenty percent.

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Speaker 6: Hit to their equity.

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Speaker 5: It's possible.

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Speaker 4: That's painful, but not systemic.

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Speaker 6: Griffin's fund, Citadel, ranks first on lph's list for having

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Speaker 6: made the most money since its launch in London. James Wilcock,

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Speaker 6: Bloomberg Radio.

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Speaker 1: Now when of up to ninety nine miles per hour

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Speaker 1: have led to flight and rail services being canceled or

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Speaker 1: delayed in many parts of the UK, danger to life

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Speaker 1: and The warnings were also in place overnight as Storm

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Speaker 1: Aysher brought heavy rain and strong winds. Sam Johnson from

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Speaker 1: the RNLI lifeboat charity is warning people to be careful

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Speaker 1: along the coast.

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Speaker 2: Large swells waves is when we're most likely to see

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Speaker 2: debris blowing into pedestrian areas and that's going to be

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Speaker 2: when there's going to be a real risk to life.

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Speaker 1: Sam Johnson from the RNLI speaking their travelers flying to

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Speaker 1: the UK and Ireland also being forced into diversions and

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Speaker 1: even to different countries as the storm has thrown planes

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Speaker 1: off course. A social media post from Dublin Airport said

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Speaker 1: that while it remains open, the weather is posing a

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Speaker 1: significant challenge to both departing and arriving flights.

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Speaker 2: Hundreds of thousands of people in Germany took part in

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Speaker 2: protests over the weekend against a far right deportation plan.

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Speaker 2: The demonstrations are in response to revelations that politicians from

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Speaker 2: the alternative for Germany party, along with members of the

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Speaker 2: main opposition Christian Democrats, discussed a controversial remigration scheme at

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Speaker 2: a recent meeting. When protesters said they'd gathered out of

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Speaker 2: concern for the future.

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Speaker 7: Above all, we are here for the grandchildren, that they

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Speaker 7: still have a future worth living, that they can continue

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Speaker 7: to enjoy a constitutional state, democracy, human rights and a

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Speaker 7: colorful society.

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Speaker 6: That is our concern.

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Speaker 2: Here, protester in Glen Milts. They're speaking at a rally

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Speaker 2: in Berlin. Discussions about the scheme, which took place at

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Speaker 2: a meeting in November. According to the media, organization Corrective

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Speaker 2: included a proposal for mass deportations of asylum seekers and

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Speaker 2: other foreigners with the right to reside in Germany, as

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Speaker 2: well as some German nationals. The AfD is currently second

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Speaker 2: in national opinion polls, while support for Chancellor Olaf Schultz's

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Speaker 2: three party coalition has weakened.

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Speaker 1: A White House advisor says that US military action to

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Speaker 1: deter groups such as Yemen's Hoothy rebels will take time.

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Speaker 1: Deputy National Security Advisor John Feiner also hinted that additional

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Speaker 1: measures are coming soon.

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Speaker 8: I think one thing that's important to keep in mind

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Speaker 8: is deterrences is not a light switch. It requires a

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Speaker 8: pattern and a practice of activity over time and can't

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Speaker 8: be assessed based on a snapshot of what's happening in

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Speaker 8: any given moment.

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Speaker 1: Finer's comments are broadly in line with Joe Biden's acknowledgement

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Speaker 1: last week that hoothy missile and drone attacks are unlikely

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Speaker 1: to stop immediately. Iran backed militias are also carrying out

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Speaker 1: other attacks in the region, including one in western Iraq

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Speaker 1: on Saturday, which injured at least two US service members. Now,

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Speaker 1: according to people familiar with the discussions, the US and

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Speaker 1: the UK are exploring ways to step up their campaign

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Speaker 1: against the who thys, but without provoking a broader war.

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Speaker 2: Benjamin etnia Who has rejected terms presented by Hamas for

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Speaker 2: a new hostage deal. The Israeli Prime Minister says the

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Speaker 2: proposal was unacceptable.

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Speaker 9: Mass is the mending in exchange for the release of

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Speaker 9: our hostages, the end of the war the withdrawal of

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Speaker 9: our forces from Gaza. Were we to agree to this,

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Speaker 9: our soldiers would have fallen in vain and the next

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Speaker 9: October seven would only be a question of time.

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Speaker 2: Netnia Who's rejection of the deal comes as public and

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Speaker 2: political pressure to bring the captives back home has been

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Speaker 2: rapidly increasing over the past several days. One hundred and

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Speaker 2: thirty two Israeli hostages remain in Gaza, though twenty seven

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Speaker 2: are known to have died. Hamas's long standing position has

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Speaker 2: been that any deal with Israel would require a cease

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Speaker 2: fire first. So in the moment, we're going to get

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Speaker 2: more in that decision by Ron DeSantis to put out

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Speaker 2: of the Republican race in the United States. But ahead

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Speaker 2: of this week's results in the Luxury Giant LVMH part

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Speaker 2: of a bumper set of results we're going to be

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Speaker 2: having this week peace by our opinion columnst under Felsted

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Speaker 2: caught my eye. She asks, is it time to break up?

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Speaker 2: LVMH says the group is suffering from a conglomerate discount

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Speaker 2: because of the wide range of brands it has under

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Speaker 2: its roof. Louisvin, for example, accounts for fifty two percent

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Speaker 2: of its sales. Dior as another juggernaut. But it has

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Speaker 2: all these other businesses, the likes of Fendy, Sephora, Tiffany,

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Speaker 2: that come under its roof, and they're effectively in Andrea's

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Speaker 2: being thrown in for nothing in twelve vmh's valuation.

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Speaker 1: Yes, for surely this has a great deal to do

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Speaker 1: with Arnold and to do with the family. You know,

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Speaker 1: he has five children that he has groomed to lead

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Speaker 1: this business. So interesting that Andrews says. Maybe for sheerheld

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Speaker 1: as it might be better, but would that really be

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Speaker 1: the plan for the family.

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Speaker 2: Well, it might solve the succession problem that Bernard Arna

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Speaker 2: was presenting himself with as well. The biggest question though,

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Speaker 2: that Andrea Wright says, is whether Arnold Senior would really

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Speaker 2: take an act to the empire that he spent forty

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Speaker 2: years building.

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Speaker 1: Yeah, it's a really great piece. Have a read of

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Speaker 1: it on the Bloomberg terminal this morning. Now, Donald Trump

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Speaker 1: seems to be on a quicker path to the Republican

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Speaker 1: presidential nomination than he was eight years ago, after Ron

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Speaker 1: de Santis dropped out of the twenty twenty four race

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Speaker 1: over the weekend, joining us now to discuss his Bloomberg's

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Speaker 1: news director was in matheson Good morning. Was good to

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Speaker 1: have you with us. With Dessanta's dropping out and backing Trump,

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Speaker 1: I mean, what to hope does Nicky Haley have a

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Speaker 1: beating Trump to the Republican nomination?

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Speaker 10: Well, it certainly has to be an ever increasingly narrow

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Speaker 10: window for Nicky Haley here to have a pathway to

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Speaker 10: the Republican nomination. The key names who've been dropping out,

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Speaker 10: including of course the biggest one of all so far,

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Speaker 10: Ron DeSantis and moving to endorse Donald Trump, to support

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Speaker 10: Donald Trump, to throw their weight behind him, and so

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Speaker 10: her field of supporters, at least within that part of

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Speaker 10: the Republican Party seems to be fading. She does have

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Speaker 10: a lot of support outside the party, though key figures

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Speaker 10: on Wall Street are still trying to raise money for

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Speaker 10: her to keep her campaign going. She's seen as sort

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Speaker 10: of the main non Trump alternative amongst that never Trump

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Speaker 10: section of the party who want to have someone else

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Speaker 10: in contention Beyond New Hampshire. Of course, her polling there

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Speaker 10: is all right. She's polling a around thirty five to

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Speaker 10: thirty eight percent in New Hampshire. Trump those polling around

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Speaker 10: fifty percent, fifty to fifty two percent, and that pretty

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Speaker 10: much puts him in a lock. For New Hampshire that

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Speaker 10: it is a more sort of moderate Republican area, you

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Speaker 10: want to say, so, possibly some supporters for her, but

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Speaker 10: the gap probably is just too big for her to narrow.

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Speaker 10: The question is how well does she place in New

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Speaker 10: Hampshire if she comes second, Is it close enough to

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Speaker 10: keep her campaign going or is it really the point

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Speaker 10: where she also has to throw on the towel.

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Speaker 2: What went wrong for Ron DeSantis? His campaign seemed to

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Speaker 2: hit quite a lot of speed bombs from where he

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Speaker 2: started as being vaunted as, you know, being the future

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Speaker 2: of the Republican Party.

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Speaker 10: Well, it's interesting because only about a year ago, all

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Speaker 10: the talk was about DeSantis. It was like, this man

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Speaker 10: is young, he's charismatic, he's sort of a version of

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Speaker 10: Trump himself, and he would be the one to beat.

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Speaker 10: And no one was really talking about Donald Trump as

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Speaker 10: a serious contender for twenty twenty four. And how quickly

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Speaker 10: that has changed, perhaps because Ron DeSantis tried to out

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Speaker 10: trump Trump. In fact, he is in some ways more

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Speaker 10: right wing and more conservative ideologically than Donald Trump is.

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Speaker 10: But the problem was he couldn't translate his success in

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Speaker 10: Florida to the national level. His campaign just wasn't able

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Speaker 10: to take his message. The people in the rest of

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Speaker 10: America want to know about the economy. He didn't have

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Speaker 10: a lot of policies on the economic front, and so

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Speaker 10: he just struggled to get traction outside Florida. He did

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Speaker 10: sort of seem to come across better in most recent weeks,

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Speaker 10: but yeah, he really had given a lot of the

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Speaker 10: runway to Trump over a period of at least six

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Speaker 10: to eight months.

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Speaker 1: Yeah, a lot of people were surprised by the Trump

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Speaker 1: victory in twenty sixteen. Countries around the world are not

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Speaker 1: going to be caught out again though. So how globally

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Speaker 1: are people thinking about perhaps the second Trump White House?

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Speaker 10: Well, that's right, there's a lot of preparation going on already.

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Speaker 10: We know that a lot of countries are sending officials

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Speaker 10: delegations not just to Washington, but out to key parts

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Speaker 10: of America to talk to officials there to try and

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Speaker 10: understand what is another Trump presidency look like. What does

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Speaker 10: it mean for economic policy, what does it mean for trade?

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Speaker 10: Does it mean for her security around the region? I mean,

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Speaker 10: if Donald Trump comes back to the White House, it's

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Speaker 10: in a very different world than when he was in it.

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Speaker 10: There's two world wars going on, you know that he

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Speaker 10: needs to deal with. There's the war of Russia's war

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Speaker 10: in Ukraine. There's the Israel Hamas conflict going on, trade

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Speaker 10: supply chains, food security. Although that looks very different than

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Speaker 10: when he was president, but there are similar issues, including

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Speaker 10: the rise of China, and so you can see at

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Speaker 10: least now countries perhaps have a better sense of what

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Speaker 10: to anticipate from Donald Trump in therefore, at least they're

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Speaker 10: going and better prepared.

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Speaker 2: Okay, Rosalin Mason or at the AMA News director, thank

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Speaker 2: you very much.

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Speaker 1: Now, companies listed on the London Stock Exchange are increasingly

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Speaker 1: looking to switch advisors amid growing concerns over the viability

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Speaker 1: of corporate brokers. These are the boutique firms that shepherd

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Speaker 1: public businesses through their interactions with investors in the city.

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Speaker 1: Now to discuss this is Bloomberg's Breaking News editor Leo Kensher,

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Speaker 1: but who has been looking into this. Leo, good morning.

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Speaker 1: Just first, what exactly the corporate brokers.

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Speaker 11: Do, Carolyn. As you mentioned, they are the sort of

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Speaker 11: key advisors that help firms interact with investors in the city.

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Speaker 11: They've been around for centuries and they largely offer four

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Speaker 11: types of key services. It's advisory so classic strategic m

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Speaker 11: and A advisory and research, sales and also execution of trades,

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Speaker 11: and that would be in UK equities in particular. And

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Speaker 11: one of their sort of absolute core tasks is to

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Speaker 11: get new shareholders on a company's register, so they really

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Speaker 11: have to deliver on that. And you might have mentioned

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Speaker 11: as well that it's a requirement for companies to have

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Speaker 11: those corporate brokers on so if they if a company

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Speaker 11: loses their corporate broker, they might get their shares suspended

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Speaker 11: if they don't find a new one. Corporate brokers like

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Speaker 11: those mandates because they're really sticky. They tend to last

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Speaker 11: for about a decade and when their companies get involved

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Speaker 11: in m and A or equity raisers, they can earn

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Speaker 11: very decent fees on that.

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Speaker 2: Okay, So the corporate broking world has been reshaped substantially

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Speaker 2: in the current downturn. What's changed and what are the

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Speaker 2: concerns of listed companies who are looking at this.

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Speaker 11: Yes, so one of the biggest developments sort of in

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Speaker 11: the last twelve months was Deutsche Bank coming in and

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Speaker 11: buying numerous which was sort of in between the bulch brackets,

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Speaker 11: the tier one investment banks in the city and the

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Speaker 11: MidCap brokers. We're talking of about sixty or so MidCap

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Speaker 11: brokers in the City of London and a few tier

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Speaker 11: one investment bank. There's also very notable consolidation between smaller players.

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Speaker 11: Two examples here there's Cavendish, which has been created by

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Speaker 11: the merger of Chenkers and finn Cap to notable names

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Speaker 11: and then their last week we had the merger between

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Speaker 11: Pameo Gordon, which is almost one hundred and fifty years old.

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Speaker 11: Cameron's David, Cameron's father and grandfather had jobs there. It's

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Speaker 11: owned by Bob Diamond, the former Barclay CEO, and they

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Speaker 11: have merged with Librium. And those are sort of like

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Speaker 11: the biggest deals that happened in the past twelve months.

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Speaker 11: And definitely some consolidation going on in that space right now.

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Speaker 1: Okay, that's really interesting. Didn't know about a Cammon's father grandfather.

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Speaker 1: So then some of the bookers are being quite vocal

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Speaker 1: though about what they want done by government and regulators

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Speaker 1: to basically help them in their situation. You say, there's

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Speaker 1: lots of consolidation going what are they asking for?

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Speaker 11: Yes, so I haven't heard a single one asking for

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Speaker 11: more supply side measures to be fair, So, as you know,

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Speaker 11: we have the Edinburgh Forms, loser i PO rules, the

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Speaker 11: reversal of EU regulations on trading and research fees, all

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Speaker 11: this talk about great British ISA. So enough on the

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Speaker 11: supply side, and you may have heard this before, but

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Speaker 11: what one executive told me in particular sort of on

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Speaker 11: the demand side, we need a cultural change, and that

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Speaker 11: won't happen overnight. One example the executive gave me was

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Speaker 11: no one in Britain really knows what's in their corporate pension,

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Speaker 11: and you know, I wish that wasn't true, but it's

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Speaker 11: true in my case. But in the USK everybody talks

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Speaker 11: about what's in there for one case. So that's something

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Speaker 11: that would have to change in order to get demand

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Speaker 11: up for UK equities.

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Speaker 2: So where does the industry go from here? What briefly

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Speaker 2: should we be looking out for this here?

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Speaker 11: So very briefly, if there's no significant market comeback, we'll

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Speaker 11: see more consolidation. As I said, there's dozens of smaller

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Speaker 11: films that catered to small capitals, so we'll see what

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Speaker 11: do you make among them if there's no comeback in

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Speaker 11: demand for fundraisings and IPOs.

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Speaker 2: This is Bloomberg Daybreak Europe, your morning brief on the

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