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

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Speaker 1: Daybreak Europe podcast, available every morning on Apple, Spotify or

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Speaker 1: wherever you listen. It's Thursday, the thirteenth of February in London.

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Speaker 1: I'm Stephen Carroll coming up today. Donald Trump and Vladimir

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Speaker 1: Putin agree to Ukraine talks as stunned European allies scramble

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Speaker 1: to respond. Two thirds of wealthy British voters who backed

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Speaker 1: the Labor Party at the last election now say they

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Speaker 1: regret their decision. Plus Gate crashing the hedge fund aristocracy.

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Speaker 1: How a new entrant is rewriting the rules of this

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Speaker 1: four point five trillion dollar industry. Let's start with a

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Speaker 1: round up of our top stories. The US President Donald

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Speaker 1: Trump and Russia's President Vladimir Putin have agreed to start

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Speaker 1: negotiating an end to the war in Ukraine. One source

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Speaker 1: telling Bloomberg that European officials got no advance warning of

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Speaker 1: the call. Others called it a sella and we're worried

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Speaker 1: of the US as giving in to Putin's key demands

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Speaker 1: without getting anything in return. But speaking in the Oval Office,

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Speaker 1: Trump defended his call with the Russian leader.

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Speaker 2: He doesn't want to end it and then go back

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Speaker 2: to fighting. Six months later, we talked about the possibility.

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Speaker 2: I mentioned it of a ceasefire so we can stop

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Speaker 2: the killing, and I think we'll probably end up at

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Speaker 2: some point getting a ceasefire.

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Speaker 1: Trump went on to say that he will probably meet

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Speaker 1: Putin in Saudi Arabia in the near future. The rapid

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Speaker 1: US policy shift was underlined yesterday when Defense Secretary Pete

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Speaker 1: Hegseth called NATO membership for Ukraine unrealistic. He also rejected

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Speaker 1: the idea that American troops could be deployed as part

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Speaker 1: of any ceasefire deal. Federal Reserve chargeer own pals as.

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Speaker 1: The latest US inflation data shows the Central Bank still

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Speaker 1: has more work to do. The January figures showed price

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Speaker 1: rises still above target, with core CPI increasing zero point

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Speaker 1: four percent. Reacting to the data in front of the

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Speaker 1: House Financial Services Committee, Powell suggested rates may remain elevated

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Speaker 1: for the foreseeable future.

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Speaker 3: We're close, but not there on inflation. And you did

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Speaker 3: see today's inflation print, which says the same thing. I mean,

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Speaker 3: we've had made great progress toward two percent. Last year

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Speaker 3: inflation was two point six percent. So great progress, but

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Speaker 3: we're not quite there yet, so we want to keep

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Speaker 3: policy restrictive for now.

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Speaker 1: Pal's comments on rates and inflation come as President Trump

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Speaker 1: impost widespread tariffs, cut taxes, and has restricted immigration to

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Speaker 1: the United States. Powell refused to comment directly on those moves,

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Speaker 1: but said it's possible new policies could prompt the Center

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Speaker 1: Bank to alter interest rates. The European Union's trade chief

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Speaker 1: has held talks with Donald Trump's incoming trade team about

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Speaker 1: how to avoid a brewing trade war. The European Commission

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Speaker 1: says Maro Chefchevich spoke to Howard Lutnik, Trump's pick to

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Speaker 1: become Commerce Secretary, Jamison Greer, his nominee for US Trade Representative,

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Speaker 1: and National Economic Council Director Kevin Hassett. The call was

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Speaker 1: disc arribed as introductory, with the two sides agreeing to

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Speaker 1: meet soon. The EU has vowed to respond if the

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Speaker 1: US moves ahead with plans to anact twenty five percent

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Speaker 1: tariffs on all steel and aluminium imports. The UK government

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Speaker 1: is calling on the country's competition watchdog to be less

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Speaker 1: risk averse in order to spur economic growth. The Business

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Speaker 1: Secretary will give a speech today calling for the Competition

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Speaker 1: and Markets Authority to focus on creating a competitive business

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Speaker 1: environment with less burdensome regulation. The former seam CMA chair

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Speaker 1: was ousted by the government last month after ministers were

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Speaker 1: underwhelmed by its plans to help grow the economy. Two

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Speaker 1: thirds of wealthy labor voters now regret their decision to

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Speaker 1: back care Sturmer in last year's election. The survey from

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Speaker 1: wealth management firm Sultus adds to a slew of gloomy

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Speaker 1: UK indicators showing plunging consumer and business confidence in the

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Speaker 1: government's approach. Bloomberg's James Wolcock reports.

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Speaker 4: The firm surveyed people with more than two hundred and

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Speaker 4: fifty pounds in investible assets. Although thirty six percent had

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Speaker 4: voted for Label last year, now the majority of those

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Speaker 4: labor voters regret it. They said the government's increase in

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Speaker 4: employment taxes, as well as decisions to tax private school

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Speaker 4: fees and scrapped the winter fuel allowance and most pensioners

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Speaker 4: had turned them against the party. More than eighty percent

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Speaker 4: of respondents said they expect the government will keep raising

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Speaker 4: taxes over the next twelve months, and one in ten

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Speaker 4: said they were considering permanently leaving the UK In London

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Speaker 4: James Wilcock Bloomberg Radio.

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Speaker 1: Francis Prime Minister survived a fifth no confidence vote yesterday,

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Speaker 1: clearing a key hurdle to delivering a delayed twenty twenty

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Speaker 1: five budget. Just one hundred and twenty one of the

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Speaker 1: five hundred and seventy seven lawmakers supported a far left

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Speaker 1: proposal to oust Francois Bayerou over social welfare spending. The

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Speaker 1: Prime Minister is using a special constitutional provision to push

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Speaker 1: the budget through the lower House without a vote, triggering

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Speaker 1: censure ballots that could force them to resign. The Social

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Speaker 1: Secure Budget bill will now face a Senate vote starting

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Speaker 1: next week, whilst the main bill, which was approved earlier

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Speaker 1: this month, is being reviewed by the country's highest court.

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Speaker 1: And those are your top stories on the markets on

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Speaker 1: Wall Street Yesterday. Equity markets sunk but recovered into the close.

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Speaker 1: The SMP five hundred had originally dropped by one percent

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Speaker 1: after the hot CPI data, but rallied on the peace

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Speaker 1: Talks news to close down only point three percent. And

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Speaker 1: we have seen Trump's phone call with Flatimir Prutin shift

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Speaker 1: markets across the globe. Brent crude sank by two point

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Speaker 1: four percent late yesterday. It's down another nine tenths this

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Speaker 1: morning to seventy four dollars and forty seven cents. The

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Speaker 1: euro has rallied. The euro dollar up another half of

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Speaker 1: a percent this morning to one oh four to thirty

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Speaker 1: six against the dollar, and the Chinese yuan has also

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Speaker 1: risen by three tenths of one percent after the Wall

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Speaker 1: Street Journal reporting that China is trying to play the

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Speaker 1: role of peacemaker in Ukraine. Eurostocks fifty futures also rallying

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Speaker 1: one point two percent higher now this morning. Futures on

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Speaker 1: Wall Street looking positive as well. In Asia, also positive

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Speaker 1: of sentiment on markets, the Msciish Pacific Index is up

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Speaker 1: by one point four percent. Well, in a moment, we'll

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Speaker 1: bring you more on that call between Trump and Putin,

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Speaker 1: plus tell you about the secret of hedge fund that's

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Speaker 1: grown into a trading powerhouse. But first and a word

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Speaker 1: another story that caught my eye this morning, and how

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Speaker 1: better to tell a story of currency dynamics, but with sushi.

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Speaker 1: Our reporters in New York and Tokyo have been comparing

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Speaker 1: how much five hundred US dollars will buy you in

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Speaker 1: sushi in the two cities. I think you can probably

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Speaker 1: guess given the week yen how much more you get

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Speaker 1: for your money in Japan. So the EN's fall about

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Speaker 1: thirty percent against the dollar over the past five years,

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Speaker 1: meaning that Tokyo's most famous sushi restaurants now feel very

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Speaker 1: affordable for American visitors, and actually some restaurants have even

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Speaker 1: introduced a two tier pricing system in tourists friendly destinations.

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Speaker 1: The article mentions Tomato Bako, which is at all you

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Speaker 1: can eat seafood spot in Shibuya in Tokyo, saying that

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Speaker 1: it's an extra thousand yen for tourists versus residents, and

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Speaker 1: actually men so pay five hundred yen more than women

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Speaker 1: in their respective categories because their fixed price menus. The

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Speaker 1: cost of eating out course, as we know, has been

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Speaker 1: rising steadily in New York, as it has here in

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Speaker 1: London as well. But the contrast of some of the

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Speaker 1: restaurants highlighting the piece seems, I mean, borders are ridiculous.

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Speaker 1: In one case, at the casual Kura Sushi flagship in

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Speaker 1: gins And Tokyo, five hundred dollars will feed more than

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Speaker 1: thirty people. By contrast, thirteen Water in the East Village

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Speaker 1: in Manhattan an affordable spot for sushi. You get dinner

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Speaker 1: for four and a bottle of sake for the same price.

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Speaker 1: You can read the full piece on Bloomberg dot com

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Speaker 1: and on the terminal. Let's bring you more now in

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Speaker 1: our top story this morning, Donald Trump speaking to Vladimir

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Speaker 1: Putin and agreeing to start negotiating an end to the

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Speaker 1: war in Ukraine. That's bringing Bloomberg. Tony Halpenho leads our

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Speaker 1: team covering economics and government in Russia. Tony, good morning.

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Speaker 1: How significant a move is this?

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Speaker 5: Good moneing soon. Yes, it's a very sharp reversal of

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Speaker 5: the US position in relation to Russia and to this war. Previously,

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Speaker 5: the Biden administration had put Ukraine at the senter of

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Speaker 5: its considerations and said that no negotiations would take place

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Speaker 5: without Ukraine's participation. Trump has simply connected directly with Putin

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Speaker 5: and has made clear that he and Putin intent to

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Speaker 5: negotiate a deal to end this war, that they plan

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Speaker 5: to meet in Saudi Arabia, and that two more summits

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Speaker 5: may take place where in the US and in Russia also,

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Speaker 5: and that Ukraine has very much being sidelined in these discussions.

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Speaker 1: We also had the US Defense Secretary Peter Hagseth telling

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Speaker 1: a NATO meeting that the US wouldn't contribute to a

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Speaker 1: peacekeeping force, so that Ukraine would probably have to accept

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Speaker 1: the last of territory. How have those comments gone down

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Speaker 1: in Kiev.

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Speaker 5: Yes, these are two big demands actually of Russia. Putin

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Speaker 5: has repeatedly said that part of his war goals are

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Speaker 5: to ensure that Ukraine doesn't join NATO, and he has

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Speaker 5: said that any settlement to this war should take account

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Speaker 5: of what he calls realities on the ground, which is

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Speaker 5: essentially Russian occupation of part of Ukraine. Both of those

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Speaker 5: things clearly are very difficult for Ukraine to accept because

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Speaker 5: they are defending their own territory and they are trying

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Speaker 5: to ensure that they're protected in the future. And until now,

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Speaker 5: at least, they've been encouraged in the idea that NATO

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Speaker 5: membership is open to them, and it now seems from

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Speaker 5: the Trump administration's position that this is not the case.

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Speaker 5: So it's a very difficult pill for Limb swallow.

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Speaker 1: One of the facts that we've been reporting on about this,

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Speaker 1: as well as a source telling us that European officials

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Speaker 1: have no notice of this phone call happening. Looking at

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Speaker 1: these developments more broadly, how worrying is this for Europe

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Speaker 1: and its position in the future of Ukraine.

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Speaker 5: Yeah, Europe is learning a hard lesson that the Trump

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Speaker 5: administration doesn't really care what it thinks. It's much more

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Speaker 5: concerned with the application of power than perhaps in the past,

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Speaker 5: and the perception is that Europe is not really able

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Speaker 5: to generate much military power, and its economic power is

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Speaker 5: divided because it can't agree very often a single position.

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Speaker 5: And so they're facing the fact that the US doesn't

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Speaker 5: very much care what they think, isn't really interested in

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Speaker 5: having them as a partner in these discussions because Washington

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Speaker 5: believes that it can deal directly with Putin, it can

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Speaker 5: deal directly with China and other issues, for example, and

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Speaker 5: it doesn't need europe support. So this is a very

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Speaker 5: different position for Europe and they're finding it quite hard

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Speaker 5: to come together and assert themselves. They issued a statement

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Speaker 5: yesterday saying that they believe that there could be no

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Speaker 5: resolution to the war in Ukraine without Europe and without Ukraine.

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Speaker 5: But it's hard to see how they leverage themselves into

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Speaker 5: this discussion that Trump has begun directly with Russia.

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Speaker 1: Indeed, and also it's got best and presenting an economic

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Speaker 1: strategy and key which would involve the essentially an exchange

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Speaker 1: of some mineral wealth in Ukraine for US support. Our

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Speaker 1: Big Take report today is looking at some of the

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Speaker 1: costs involved in the future of this, particularly for Europe's

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Speaker 1: major NATO members. The numbers from Bloomberg Economics, protecting Ukraine

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Speaker 1: and expanding those militaries could cost an extra three point

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Speaker 1: one trillion dollars over the next ten years. How does

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Speaker 1: that number add up.

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Speaker 5: Yes, it's a huge sum of money, and it's basically

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Speaker 5: compiled from analyzing how much it would cost, for example,

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Speaker 5: for Europe's NATO members to raise defense spending to something

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Speaker 5: like three point five percent of GDP, which is far

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Speaker 5: higher than it is now. It will be the cost

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Speaker 5: of supporting Ukraine's military both during the war and after

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Speaker 5: the war, in ensuring that they have security guarantees, and

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Speaker 5: it's the cost of reconstruction for Ukraine. It's a huge

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Speaker 5: bill to fix all of the infrastructure and other industry

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Speaker 5: and housing that's been destroyed in this war. So that's

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Speaker 5: a very huge bill. It's another thing that the US

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Speaker 5: is making clear that it believes Europe should shoulder the

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Speaker 5: majority of the costs of so it's a big question

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Speaker 5: for Europe whether they can meet this kind of spending

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Speaker 5: over the next decade.

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Speaker 1: Okay, beIN Brooks, Tony Halpin, thank you very much. Now

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Speaker 1: to a different story. Cube Research and Technologies has risen

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Speaker 1: to one of the world's top multi strategy hedge funds,

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Speaker 1: but even in the finance world, many people won't have

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Speaker 1: heard of it. Secretive startups a master more than twenty

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Speaker 1: billion dollars in assets, putting it in the top one

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Speaker 1: percent of managers. Joining us now is our global hedge

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Speaker 1: fund correspondent Nishan Kumar, who's lifted the lid on this

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Speaker 1: little known firm. Nishan, good morning. Who are the people

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Speaker 1: behind this hedge fund that few people have heard about?

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Speaker 6: Good morning? Yes, I would say QA Tea must be

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Speaker 6: one of the least known large hedge fund in the world.

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Speaker 6: I mean we can say the least known here, although

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Speaker 6: I don't have any data to prove that it was

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Speaker 6: started by former Princewis colleagues, Pierre if morlatt or just

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Speaker 6: pained to his friends and Laurent laiseet I hope I

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Speaker 6: pronounce their names correctly. Their names may not be as

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Speaker 6: well known as some of the hedge fund titans in

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Speaker 6: the world, like Ken Griffin or Easy Englander. In the

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Speaker 6: wider world, it's definitely not, but their performance is making

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Speaker 6: its presence felt really among investors. They have grown from

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Speaker 6: just eight hundred million dollar about seven years ago to

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Speaker 6: about twenty three billion dollars now. I mean, few hedge

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Speaker 6: funds have grown so big so fast. It's a very

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Speaker 6: unique situation.

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Speaker 1: Yeah, it certainly does. I mean, essentially, how did they

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Speaker 1: do it? How have they managed to achieve this? And

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Speaker 1: in a way that appears to be quite stealthily.

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Speaker 6: I would say part luck, part the business build out.

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Speaker 6: It started not as a new hedge fund, but the

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Speaker 6: partners and the team were already They're working for Credit

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Speaker 6: Swis for a very long time and this has been

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Speaker 6: making for years before that. They spun out of Credit

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Speaker 6: Swiss as hedge fund just seven years ago. You know,

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Speaker 6: it doesn't feel like it was likely. It's a very

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Speaker 6: unlikely situation here. Over the last ten years, what we

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Speaker 6: have seen is multi strategy hedge funds like Citadel, Millennium,

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Speaker 6: Dish Orzer point seventy two taking over the hedge fund world.

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Speaker 6: They have all who weed away talent, investor attention and

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Speaker 6: their cash. They have hired the best people who are around.

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Speaker 6: They've persuaded those with ambitions to launch their hedge funds

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Speaker 6: not to do so and join them. I mean, I'll

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Speaker 6: go and a step further and say that they have

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Speaker 6: even convinced people running their own successful hedge fund business

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Speaker 6: to shut that down and join them instead. So in

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Speaker 6: that backdrop, building a sizable business so fast and so big,

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Speaker 6: which is now fourteen hundred people with performance like they have,

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Speaker 6: is very very rare. You may call kyotie luck, but

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Speaker 6: their success shows that it's still possible to build a

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Speaker 6: sizeable hedge fund business in a world so dominated by

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Speaker 6: hedge fund giants that have been around for decades.

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