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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg

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Speaker 1: Daybak podcast, available every morning on Apple, Spotify or wherever

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Speaker 1: you listen. It's Monday, the twentieth of May. Here in London.

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Speaker 1: I'm Caroline Hepkin and.

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Speaker 2: I'm Stephen Carroll.

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Speaker 3: Coming up today, Iran's president and foreign minister are killed

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Speaker 3: in a helicopter crash. We look at who may take

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Speaker 3: over and what it could mean for the broaderm At.

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Speaker 1: Least in other news, London still leads Europe in attracting

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Speaker 1: foreign direct investment into financial services.

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Speaker 2: Plus private equities.

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Speaker 3: Massive UK debt bind sparks warnings of danger.

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Speaker 2: We have a special report.

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

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Speaker 3: Iran's President, Ibrahim Raisi, has been killed in a helicopter crash,

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Speaker 3: according to a number of Iranian news sources. The semi

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Speaker 3: official Mayor News agency reports that Foreign Minister Hussein Amir

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Speaker 3: Abdullahian has also died in the crash. The convoy consisted

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Speaker 3: of three helicopters. The wreckage was found on Sunday in

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Speaker 3: a mountainous area of the country, but dense fog hamper's

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Speaker 3: rescue efforts Bloomberg's Middle East edator Paul Wallace says questions

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Speaker 3: remain over what happens next.

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Speaker 4: The government itself has not put out an official statement yet, saying,

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Speaker 4: for example, who now takes over, It's likely to be

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Speaker 4: the vice president, someone who's called Mohammad makhmer. In some ways,

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Speaker 4: a lot of what's gone on in Iran in the

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Speaker 4: last couple of years in terms of its foreign policy

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Speaker 4: were not down to Racey so much as the Supreme

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Speaker 4: media Ali Kamini. He obviously remains in position.

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Speaker 3: Bloomberg's Paul Wallace speaking there, The news comes in the

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Speaker 3: middle of the Israel Hamas conflict in Gaza, with Hamas

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Speaker 3: supported by Iran and tensions with the US over around

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Speaker 3: backed too Thi's attacking ships in the Red Sea.

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Speaker 1: Well Ibrahim ric age sixty three was an ultra conservative

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Speaker 1: cleric who was elected in twenty twenty one, following eight

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Speaker 1: years under the relative moderate Hassan Rahani. Raissi was seen

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Speaker 1: as a favorite to eventually succeed the Supreme leader, a

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Speaker 1: Ali Haamane, who is in his eighties. Richard Dalton is

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Speaker 1: a former British ambassador to Iran. He says that Raisi

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Speaker 1: was important but not irreplaceable.

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Speaker 5: But a figure that was trusted by the Supreme Leader

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Speaker 5: Atola Kamene and by the other organs of power like

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Speaker 5: the judiciary and the Parliament could be appointed quite quickly

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Speaker 5: to take his.

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Speaker 1: Place, Richard Dalton speaking there, Raisi entered office pledging to

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Speaker 1: end efforts to build trade ties with the West and

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Speaker 1: instead focused on developing links with China and Russia. But

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Speaker 1: Rayisi's time as president has been marked by economic problems

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Speaker 1: at home, including successive lows for the Iranian currency against

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Speaker 1: the US dollar. Also the most widespread and violent protests

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Speaker 1: in the country's recent history, triggered by the death of

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Speaker 1: a young woman held in police custody.

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Speaker 3: Tidning is now Two of the three members of Israel's

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Speaker 3: war cabinets are continuing to put pressure and Prime Minister

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Speaker 3: Benjamin Netanyahu to change course under war in Gaza on Saturday,

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Speaker 3: opposition leader Benny Gantz said he'd quit the cabinet by

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Speaker 3: the eighth of June if the Israeli leader didn't make changes.

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Speaker 3: He wants Natanya who to agree to a six point

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Speaker 3: plan with the return of hostages a top priority.

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Speaker 6: I just understand that we are facing a very long campaign,

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Speaker 6: whether it's in Gaza, whether it's in other places. But

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Speaker 6: the hostages they don't have that much time.

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Speaker 3: Israeli Work Cabinet member Benny Gantz speaking there. His proposals

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Speaker 3: also include demilitarizing Gaza and supporting efforts to normalize relations

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Speaker 3: with Saudi Arabia. Analysts say Natnia, who's governing coalition, is

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Speaker 3: likely to remain secure even if Gantz carries out his

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Speaker 3: threat to resign.

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Speaker 1: Now, London still leads European cities when it comes to

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Speaker 1: securing foreign direct investment for new financial services projects, but

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Speaker 1: a new survey warns that Paris is likely to challenge

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Speaker 1: London's dominance in the years ahead. Bloomberg's Tea at Adebayo

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Speaker 1: has more.

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Speaker 7: London has secured eighty one foreign financial projects last year.

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Speaker 7: A survey by Ernst and Young shows a seventy six

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Speaker 7: percent increase in investments compared to the previous year, with

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Speaker 7: the city accounting for a third of all financial FDI

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Speaker 7: in Europe. Although Brexit and poor equity market performance has

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Speaker 7: raised concerns about the UK's competitiveness, London secured more than

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Speaker 7: double the investment of second place Paris, but data shows

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Speaker 7: that investors still rank Paris ahead of London over a

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Speaker 7: three year horizon, with many on Wall Street touting the

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Speaker 7: French capital as Europe's next financial hub. In London tiwa

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Speaker 7: Adebayo Bloomberg Radio.

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Speaker 3: The cast of buying a typical home in the UK

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Speaker 3: has reached a record high. The property website right Move

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Speaker 3: says demand has pushed up the average house price to

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Speaker 3: just over three hundred and seventy five thousand pounds. That's

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Speaker 3: an increase of zero point eight percent from last month.

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Speaker 3: Property sales also jumped by seventeen percent in the first

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Speaker 3: four months of the year when compared with the same

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Speaker 3: period in twenty twenty three.

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Speaker 1: Staying here in the UK, the government is expected to

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Speaker 1: unveil a compensation package worth more than ten billion pounds.

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Speaker 1: Over the decades long contaminated blood scandal, thousands of people

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Speaker 1: died after contracting illnesses from contaminated, unscreened blood. Bloomberg's James

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Speaker 1: Wilcock has more.

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Speaker 8: Between the nineteen seventies and nineteen nineties, some thirty thousand

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Speaker 8: people who were given blood transfusions in the UK contracted

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Speaker 8: HIV or hepatitis C more than forty years on. An inquiry,

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Speaker 8: reports to day on what has been described as the

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Speaker 8: biggest treatment disaster in NHS history. Bloomberg has told the

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Speaker 8: government intends to spend billions on compensation, reflecting what Defense

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Speaker 8: Secretary Grant Chaps called a shameful failure. It just makes

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Speaker 8: you angry inside to hear about all the different you know,

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Speaker 8: essentially lack of anybody taking responsibility, mismanagement. But the announcement

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Speaker 8: comes a basically difficult moment for the government. You have

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Speaker 8: barely any headroom yet want to cut taxes in the

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Speaker 8: autumn in London, James Orcock in their radio.

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Speaker 1: Now to our top story this morning. Various Iranian news

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Speaker 1: sources say that Iran's president and foreign minister have both

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Speaker 1: been killed in a helicopter crash in the northwest of

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Speaker 1: the country. It comes at a time of turmoil in

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Speaker 1: the Middle East over the war in Gaza, which has

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Speaker 1: threatened to edge Iran at Israel into all out conflict.

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Speaker 1: Joining US now is our head of Middle East and

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Speaker 1: North Africa coverage, Stuart Livingston Wallas, Good morning, Stuart, thank

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Speaker 1: you for being with us. What is the latest then

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Speaker 1: that we are hearing about this crash?

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Speaker 9: So it started sort of yesterday evening and it's been

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Speaker 9: a long night. So we know the helicopter I think

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Speaker 9: it was one of three traveling together, but we'd heard

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Speaker 9: that it had had I think what was initially reported

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Speaker 9: as a hard landing, and that was sort of yesterday evening,

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Speaker 9: and then I think it's just taken a great deal

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Speaker 9: of time to actually get to the site. It's in

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Speaker 9: a mountainous area. We've seen some of the the social

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Speaker 9: media videos being sent out from the site, and things

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Speaker 9: are very foggy. There was heavy rain and so on.

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Speaker 9: So they did send some helicopters into try and find

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Speaker 9: the site, but I just say they couldn't see anything

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Speaker 9: through the fog, so they had to go basically in

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Speaker 9: cars or four x fours and go and find the site.

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Speaker 9: And really that only happened in the last couple of hours.

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Speaker 9: And then the death has been confirmed by state media,

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Speaker 9: I suppose in the last hour or so. So it's

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Speaker 9: been a long long time since the initial reports and

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Speaker 9: then the confirmation that he is indeed dead.

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Speaker 3: Now, Racey was an ultra conservative cleric, former Chief Justice

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Speaker 3: and had been the favorite to eventually succeed the Supreme

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Speaker 3: leader Iatala Hameni. How does this affect the hardline leadership

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Speaker 3: of Iran, which has faced protests over issues like the

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Speaker 3: economy and human rights.

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Speaker 2: It has.

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Speaker 9: I mean, I think in terms of the long term

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Speaker 9: implication with Iran, it doesn't really change the equation. So

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Speaker 9: there were really two favorites to take over from Hamone,

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Speaker 9: the supreme leader. One was obviously Racy, and the second

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Speaker 9: one was Harmony Son, who is, as you can guess,

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Speaker 9: also something of an ultraconservative. So it was a choice

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Speaker 9: between two very hard line figures. So in terms of

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Speaker 9: that future, if things transpire the way we anticipate them,

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Speaker 9: then you still end up with a hard line leadership

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Speaker 9: one way or another. Now, what potentially changes here is

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Speaker 9: in terms of just the balance of power within the

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Speaker 9: internal hard line camps, because you have the military in

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Speaker 9: the form what you have the army, but you also

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Speaker 9: have the IRGC, and then there are some potentially some

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Speaker 9: changes there. But you know, fundamentally, anyone's anticipating a major

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Speaker 9: change of policy direction as a result of Racey's death,

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Speaker 9: I don't think that's going to be the case in

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Speaker 9: the slightest.

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Speaker 1: What then, does it mean for the conflict in the

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Speaker 1: Middle East? I mean, Iran does have a very you know,

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Speaker 1: opaque political system, as you say, restricted political structure. But

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Speaker 1: in terms of the external facing conflict within the Middle East,

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Speaker 1: Iran did laune a drone and missile attack against Israel

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Speaker 1: last month that was seen also as a counterattack Iran

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Speaker 1: and Israel and open conflict that has been a significant worry.

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Speaker 9: Yeah, I mean again, I don't think it changes a

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Speaker 9: great deal because ultimately the final decision on what was

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Speaker 9: launched and where too was taken by Harmony, and obviously

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Speaker 9: he remains in office. When he's eventually replaced, potentially by

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Speaker 9: Son again, you should anticipate quite a similar sort of

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Speaker 9: set of circumstances in terms of that decision making. So

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Speaker 9: going forward, yes, Iran will continue to support its proxies

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Speaker 9: across the region. But at the same time, it really

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Speaker 9: depends what happens on the ground in Gaza.

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Speaker 3: What practically does this mean for Iran at the moment,

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Speaker 3: What is the succession plan for the president and does

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Speaker 3: it mean that there will be further elections?

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Speaker 9: It does, so we don't know exactly when they take place.

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Speaker 9: For now, the vice president takes over and then new

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Speaker 9: elections take place we presume in the next several months,

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Speaker 9: But of course those election process is absolutely different to

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Speaker 9: what you would anticipate in the Western democracy. So there

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Speaker 9: is an assembly of experts who basically decides who can

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Speaker 9: run and who can't. And as we saw in the

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Speaker 9: last election in twenty twenty one, you know fundamentally they

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Speaker 9: will only allow ultra conservative candidates to stand. So I

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Speaker 9: think in the twenty twenty one election, which is the

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Speaker 9: one Ricey won, it was something like six hundred candidates

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Speaker 9: came forward and I think only basically a dozen got

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Speaker 9: through that final vesting process, and there were no veteran politicians,

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Speaker 9: there were no moderates, there were nothing even resembling a

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Speaker 9: moderate in the final camp, as a consequence of which

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Speaker 9: you saw this record low turnout for the election. Basically,

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Speaker 9: there is a very large proportion of electorate in Iran

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Speaker 9: that has effectively given up on those elections ever really

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Speaker 9: offering them any sort of choice beyond one ultra conservative

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Speaker 9: over another.

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Speaker 1: Okay, in terms of political reaction and response, Even over

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Speaker 1: the weekend, Chuck Schumann in the US was saying that

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Speaker 1: there was no evidence of foul play. Clearly, with the

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Speaker 1: kind of deep tensions within the Middle East, tehranne back

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Speaker 1: to her mass the Whofi's and Hesbula. This would be

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Speaker 1: a question that you would anticipate coming, right.

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Speaker 9: Yeah, and I'm sure within Iran itself there would be

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Speaker 9: you know, furious conspiracy theories being spun. I think the

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Speaker 9: reality is that the most likely explanation is that they

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Speaker 9: were traveling on reasonably old equipment, because it is absolutely

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Speaker 9: true that Iran's been number sanctions for a very long

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Speaker 9: time and has really struggled to get the equipment needed

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Speaker 9: to maintain its helicopters. Now we don't know exactly what

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Speaker 9: he was traveling on, but the chances was a pretty

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Speaker 9: old piece of equipment. And then you layer in on

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Speaker 9: top of that that they were in a mountainous area,

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Speaker 9: that it was incredibly foggy, that there was heavy rain,

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Speaker 9: and on and on and on, and that does appear

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Speaker 9: to be the most likely explanation. Again, this is not

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Speaker 9: my air of expertise, but I can tell you that,

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Speaker 9: particularly in this part of the world, helicopters crashed quite

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Speaker 9: a bit. However, that will not necessarily stop those conspiracy

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Speaker 9: theories building up within Iran, particularly because he was one

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Speaker 9: of the favorites to take over from the Supreme Leader

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Speaker 9: Supreme Leaders in something like his mid eighties, so obviously

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Speaker 9: we don't know exactly how long it'll be before he

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Speaker 9: passes away, but you know when you're in your mid eighties, Chancellor,

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Speaker 9: it's going to happen in the next few years.

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Speaker 3: Okay, Stuart, thank you very much for now that Stuart

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Speaker 3: Livingston Wallace there are head of Middle East and North

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Speaker 3: Africa coverage.

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Speaker 2: Okay, We're going to turn to.

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Speaker 3: A different story now here in the UK, where private

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Speaker 3: equity firms took over British businesses and droves after the

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Speaker 3: Brexit vote. A suppressed valuations and the new buyers piled

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Speaker 3: large amounts of debt on those companies in the process.

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Speaker 2: But in a higher rate environment.

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Speaker 3: This is now starting to bite the Bank of England

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Speaker 3: and politicians are worried that this increased dependency on debt

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Speaker 3: over recent years creates risks for systemically important employers in Britain.

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Speaker 3: Joining us now to discuss is our corporate finance reporter

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Speaker 3: Aban av ramnarayan Abana. Good morning to you. Great to

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Speaker 3: have you with us on the program. Why did private

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Speaker 3: equity companies target the UK in particular in recent years?

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Speaker 10: Many private equity funds are based in the US and

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Speaker 10: of course there's a cultural film reality with the UK,

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Speaker 10: and the UK has an investor friendly setup, so it

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Speaker 10: was always attractive for US private equity firms in particular,

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Speaker 10: but this was supercharged after the Brexit vote because valuations

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Speaker 10: fell in the UK on the London Stock Exchange, as

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Speaker 10: did the Sterling currency. So this created what people started

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Speaker 10: calling the Brexit discount and made the UK a very

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Speaker 10: attractive place for private equity companies.

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Speaker 1: And so there's been a lot of debt piled on

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Speaker 1: some well known names here in the UK like Morrison's

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Speaker 1: and Asda Pizza Express. Madam Tasaul's policymakers are really quite

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Speaker 1: worried about this. Now, what do you think might happen?

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Speaker 10: That's a really good question at the moment. The Bank

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Speaker 10: of England is looking very closely at this issue. They're

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Speaker 10: looking at whether or not there's any systemic risk attached

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Speaker 10: to all the debt that's been added to UKPLC as

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Speaker 10: it were, And I think the Labor Government has been

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Speaker 10: making some noises about increasing tax on certain types of

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Speaker 10: private equity gains. But I do think it's a tricky

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Speaker 10: one both for policymakers and for politicians because, especially after Brexit,

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Speaker 10: attracting investment in the UK has been has proven a challenge.

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Speaker 10: I mean, just look at the lack of IPOs on

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Speaker 10: the London Stock Exchange, while you know Amsterdam is able

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Speaker 10: to attract IPOs. So I think they're going to have

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Speaker 10: to thread that needle of making sure there isn't too

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Speaker 10: much debt in the system while also not scaring away

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Speaker 10: private equity investors they need them.

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