Good morning. In a year defined by uncertainty, CFOs must stay agile and make proactive decisions to navigate a financial landscape where market sentiment can “flip on a dime”.
That was the focus of an interesting conversation I had with Amol Dhargalkar, chairman and managing partner of Chatham Financial, a global financial risk management advisory and technology firm. Dhargalkar shared insights from his discussions with CFOs, highlighting three major issues.
Financing now, not later
“If there’s one big theme I can point to, it’s that when there is an opportunity for financing, CFOs are taking advantage of it,” Dhargalkar said.
He explained that this bias toward immediate action is less about the U.S. Federal Reserve’s moves on interest rates and more about market sentiment, which can shift rapidly due to geopolitical or policy changes. Many CFOs prefer to secure deals now rather than risk adverse developments, such as new tariffs, that could negatively affect their businesses.
Recent data shows a significant amount of issuance in the first half of the year, reflecting this proactive approach, Dhargalkar noted. Even if interest rates might decline modestly in the coming months, the risk of waiting often outweighs the potential benefit for many finance leaders.
Navigating volatile bond yields
“We’ve seen a lot of volatility in government bond yields, which has played into the market in a variety of ways,” Dhargalkar explained. CFOs are closely monitoring these fluctuations, though uncertainty about future movements remains high. While this doesn’t mean investors are abandoning U.S. markets, it is a key area of concern for finance leaders.
Concerns about the potential impact of President Trump’s tax bill rattled bond markets last month, primarily due to fears it would sharply increase the U.S. national debt, Fortune reported.
The dollar’s impact and currency risk
The strength—or weakness—of the U.S. dollar is also top of mind, especially for multinational companies, Dhargalkar said. Many CFOs are asking whether the recent dollar weakness is temporary or a longer-term trend, and how they should manage related currency risks. This environment has prompted some companies to implement or expand foreign exchange hedging programs, particularly those that previously had limited exposure, he explained.
Managing currency risk is more challenging for smaller multinationals, which are less likely to have robust hedging programs in place, Dhargalkar said. For companies with significant overseas earnings, a weaker dollar can be a net positive, as foreign revenues translate into more dollars, he explained. However, the rapid movement of the dollar in either direction typically sparks extensive internal discussions about hedging strategies and financial forecasts.
When I asked Dhargalkar his biggest piece of advice for CFOs, he said: “Rethink their approach to capital structure and financing tools.” As companies move beyond “firefighting mode,” they should consider diversifying their issuance base—such as issuing debt abroad or exploring private credit markets—rather than relying solely on traditional U.S. financing options, he suggested.
Today’s financing tools are more flexible, though often more expensive due to higher rates compared to several years ago. “Don’t feel like you’re stuck with the tools of yesterday,” Dhargalkar said.
The man charged with killing one Minnesota lawmaker and wounding another in what prosecutors have described as a meticulously planned attack, had dozens of apparent targets, including officials in at least three other states.
Vance Boelter allegedly made it to the homes of two other legislators on the night of the attacks, but one was on vacation and the suspect left the other house after police arrived, acting U.S. Attorney Joseph Thompson said Monday.
All of the politicians named in his writing were Democrats, including more than 45 state and federal officials in Minnesota, Thompson said. Elected leaders in Michigan, Ohio and Wisconsin said they, too, were mentioned in his writings.
In Minnesota, Boelter carried out surveillance missions, took notes on the homes and people he targeted, and disguised himself as a police officer just before the shootings, Thompson said.
“It is no exaggeration to say that his crimes are the stuff of nightmares,” he said.
Boelter surrendered to police Sunday night after they found him in the woods near his home after a massive two-day search. He is accused of fatally shooting former Democratic House Speaker Melissa Hortman and her husband, Mark, in their home early Saturday in the northern Minneapolis suburbs.
Authorities say he also shot and wounded Sen. John Hoffman, a Democrat, and his wife, Yvette, who lived a few miles away.
Federal prosecutors charged Boelter, 57, with murder and stalking, which could result in a death sentence if convicted. He already faces state charges, including murder and attempted murder. At a federal court hearing Monday in St. Paul, Boelter said he could not afford an attorney. A federal public defender was appointed to represent him, and he was being held without bail pending a court appearance next week.
Manny Atwal, his lead attorney, declined to comment, saying the office just got the case.
Notebooks show careful planning
Boelter had many notebooks full of plans, Thompson said. Underscoring what law enforcement officials said was the premeditated nature of the attacks, one notebook contained a list of internet-based people search engines, according to court records.
But authorities have not found any writings that would “clearly identify what motivated him,” Thompson said. He said it was also too soon to speculate on any sort of political ideology.
Democratic Rep. Esther Agbaje, whose district includes parts of Minneapolis, said she stayed with friends and family over the weekend after learning that her name appeared on the list of targets.
In texts, the suspect said he ‘went to war’
Authorities declined to reveal the names of the other two lawmakers whose homes were targeted but escaped harm. Democratic Sen. Ann Rest said she was told the suspect parked near her home early Saturday. She said in a statement that the “quick action” of law enforcement officers saved her life.
Boelter sent a text to a family group chat after the shootings that said: “Dad went to war last night … I don’t wanna say more because I don’t wanna implicate anybody,” according to an FBI affidavit.
His wife got another text that said: “Words are not gonna explain how sorry I am for this situation … there’s gonna be some people coming to the house armed and trigger-happy and I don’t want you guys around,” the affidavit said.
Police later found his wife in a car with her children. Officers found two handguns, about $10,000 in cash and passports for the wife and her children, according to the affidavit.
Just hours after the shootings Saturday, Boelter bought an electric bike and a Buick sedan from someone he met at a bus stop in Minneapolis, the federal affidavit said. Police found the sedan abandoned on a highway Sunday morning.
In the car, officers found a cowboy hat Boelter had been seen wearing in surveillance footage as well as a letter written to the FBI, authorities said. The letter said it was written by “Dr. Vance Luther Boulter” and he was “the shooter at large.”
The car was found in rural Sibley County, where Boelter owned a home.
Coordinated attacks on legislators
The Hoffmans were attacked first at their home in Champlin. Their adult daughter called 911 to say a masked person had come to the door and shot her parents.
Boelter had shown up carrying a flashlight and a 9 mm handgun and wearing a black tactical vest and a “hyper-realistic” silicone mask, Thompson said.
He first knocked and shouted: “This is police.” At one point, the Hoffmans realized he was wearing a mask and Boelter told them “this is a robbery.” After Sen. Hoffman tried to push Boelter out the door, Boelter shot him repeatedly and then shot his wife, the prosecutor said.
A statement released Sunday by Yvette Hoffman said her husband underwent several surgeries after being hit by nine bullets.
After hearing about a lawmaker being shot, officers arrived just in time to see Boelter shoot Mark Hortman through the open door of the home, according to the complaint. They exchanged gunfire with Boelter, who fled into the home before escaping, the complaint said. Melissa Hortman was found dead inside, according to the document. Their dog also was shot and had to be euthanized.
Search for motive continues
Writings recovered from the fake police vehicle included the names of lawmakers and community leaders, along with abortion rights advocates and information about health care facilities, said two law enforcement officials who spoke to The Associated Press on condition of anonymity because they were not authorized to discuss details of the ongoing investigation.
Friends and former colleagues interviewed by the AP describe Boelter as a devout Christian who attended an evangelical church and went to campaign rallies for President Donald Trump.
Boelter also is a former political appointee who served on the same state workforce development board as Hoffman, records show, though it was not clear if they knew each other.
Vance Boelter, right, who is charged with killing one Minnesota lawmaker and wounding another, is seen at a federal court hearing on June 16, 2025, in St. Paul, Minn.
Enterprise SaaS M&A is caught between rebound and a rut.
Consider, first, the good news, of which there’s quite a bit: Q1 2025 saw 210 enterprise SaaS mergers and acquisitions get done, a number on par with the 211 deals inked in Q4 2024, according to recent PitchBook data. That’s also a sizable jump from the beginning of Q1 2024, which saw 165 enterprise SaaS mergers and acquisitions.
Additionally, the total value for VC-backed M&A in enterprise SaaS went up in Q1—hitting $14.6 billion, according to PitchBook—while private equity-led deal count hit a new quarterly record for the sector at 73 deals.
Now, consider the less-good news: The total deal value for enterprise SaaS M&A in Q1 2025 is down quarter-over-quarter by about 24.8%—from $38.7 billion in Q4, to $29.1 billion this past quarter. What’s more, five deals account for about half of the total transaction value across the quarter: Clearlake Capital Group’s $5.3 billion buyout of medical software company ModMed, KKR-backed Cotiviti’s $3.1 billion buyout of healthcare data entity Edifecs, ServiceNow’s $2.9 billion acquisition of enterprise AI tool unicorn Moveworks, CoreWeave’s $1.7 billion acquisition of AI developer startup Weights & Biases, and DNEG Group’s $1.4 billion buyout of Hollywood-focused generative media startup Metaphysic. (Though jarring, we’ve seen skews like this before, notably when it comes to how AI investing is shaking out—a landscape where it looks like there’s lots of action in total deal value, but upon closer inspection, the data reveals a gravitation towards surer, more established bets.)
So, what does all this mean? I think it comes down to two things. The first: AI is underpinning a new wave of enterprise SaaS deals and, despite lingering regulatory and macro pressures, dealmakers are getting comfortable rolling the dice again on market-moving transactions. And second: At the same time, the future remains uncertain, both in terms of how regulatory scrutiny will look in the U.S. and abroad over the company years, and the level of macroeconomic volatility that may (or may not) be coming down the pike.
And that’s how you end up, for now, between a full-fledged rebound and a persistent rut. My guess, here and now, on June 17: We could see a more decisive recovery by the end of the year. Any takers? As always, I would love to hear what you think.
At Web Summit last week, Fortune's Jeremy Kahn moderated a discussion of whether "the AI bubble is about to burst" with Moveworks CEO Bhavin Shah (left) and Sarah Myers West, co-executive director of the AI Now Institute.
Unemployment rates for recent college graduates have surged in recent data, with the rate for those holding a bachelor’s degree rising to 6.1%—and even higher for those with advanced degrees or some college but no degree—contrasting with a national rate of 4.2%. This may strengthen the argument of top CEOs like Jamie Dimon, Ted Decker, and John Furner who have urged young people and employers to prioritize job-ready skills and alternative career paths over traditional college degrees.
Graduates choose to attend college instead of heading straight into the workforce for a range of reasons, be it furthering their studies in a specific field or gaining qualifications needed for a certain role. But their motives often boil down to one thing: Landing a career in the profession of their choice.
According to the most recent data published by the Federal Reserve Bank of St Louis (FRED), the unemployment rate for college graduates with a bachelor’s degree sat at 6.1% in May—up from 4.4% just a month prior.
Likewise, the unemployment rate for those aged between 20 and 24 with some college experience but no degree, as well as those of the same age demographic with a Master’s degree or higher, spiked last month.
FRED reports that Gen Z with a Master’s or higher now have an unemployment rate of 7.2% while those with some college experience have an unemployment rate of 9.4%.
According to analysis by the Wall Street Journal, that picture is even more dire. Citing micro data from the Labor Department, the WSJ estimates graduates have an unemployment rate of 6.6% over the past 12 months ending in May, the highest level in a decade with the exception of the pandemic spike.
This trend of increasing unemployment is at odds with the picture of the rest of the U.S., where unemployment held steady at 4.2% from April to May, elevated only a little from the rate 12 months ago.
As researchers from Oxford Economics reflected in a study last month: “Those in the professional, scientific, and technical services are less likely than their peers to seek employment in a different industry, though they are more likely to accept underemployment—defined as a college graduate who is employed in a job where more than 50% of workers in the same role do not have a bachelor’s degree or higher.”
Indeed, while some young potential staffers are willing to take sideways steps in order to earn an income, the analysts suggested Gen Z grads are having a harder time than most: “The upshot is that the unemployment rate for recent college graduates will remain elevated in the near term without a surge in demand from tech companies or a mass exodus from the labor force by these individuals, both of which seem unlikely.
“While these workers only account for around 5% of the workforce, they have played an oversize role in pushing the national unemployment higher.”
Alternative routes
An argument could be made that the data suggests employers aren’t finding the skills they need in newly-minted grads, despite the tens of thousands of dollars many will have forked out to achieve their degrees.
JPMorgan CEO Jamie Dimon, for example, has pushed for education reform to rank schools based on whether its students land jobs as opposed to how many of them get into college.
“If you look at kids they gotta be educated to get jobs. Too much focus in education has been on graduating college… It should be on jobs. I think the schools should be measured on, did the kids get out and get a good job?” Dimon told Indianapolis-based WISH-TV last year.
The idea that college is the only way to land a well-paid job is also inaccurate, he added, saying 17-year-old bank tellers can take home $40,000 a year “and if you happen to have a family at 18 or whatever, you get $20,000 in medical benefit for your family. You can be a welder, you can be a coder, you could be cyber, you could be automotive—all of those jobs are $40,000 to $60,000, $70,000 a year.”
Dimon, a veteran of Wall Street, has also argued educators should focus on skills which will stand individuals in good stead for the rest of their lives such as nutrition and financial literacy.
The JPMorgan Chase boss isn’t alone. In a WSJ op-ed last year titled “Not Everyone Needs a College Degree” the CEOs of Home Depot and Walmart U.S., Ted Decker and John Furner wrote: “Young people have been told for decades that achieving the American dream requires a college degree … While a college degree is a worthwhile path to prosperity, it isn’t the only one.”
They added: “The American dream isn’t dead, but the path to reach it might look different for job seekers today than it did for their parents. We owe it to younger generations to open our minds to the different opportunities workers have to learn new skills and achieve their dreams.”
In hindsight, it was an exchange that encapsulated years of shopper frustration.
On an earnings call in January, a Wall Street analyst asked Walgreens Boots Alliance CEO Tim Wentworth about his efforts to ease the strain that the U.S. drugstore chain’s security measures were putting on its sales. As millions of American shoppers know, and many deeply resent, a great many items in a typical Walgreens are locked up behind glass—obtainable only with help from a clerk. (And, by the way, good luck finding a clerk.)
Wentworth responded that countering shoplifting was like “hand-to-hand combat.” He then made a comment that earned him countless headlines: “When you lock things up, you don’t sell as many of them. We’ve kind of proven that pretty conclusively.”.
“No sh*t, Sherlock,” was the general flavor of reactions in countless comment sections, as critics noted that the CEO of the company that owns the 8th-largest U.S. retailer ought to have understood that equation intuitively.
Wentworth, a well-regarded executive, went on to explain that the loss to theft was hurting the company’s profit too much, hence the draconian lockdowns. But investors’ annoyance over his answers pointed to Walgreens’ much deeper problems.
In 2024, Walgreens drugstores generated non-pharmacy revenue—called “front-of-store sales” in the industry—of some $27 billion, from items like toothpaste, soda, aspirin and potato chips; and another $89 billion from filling prescriptions and other pharmacy services. Pharmacy has historically had lower margins than front-of-store, and in recent years, under pressure from insurance companies and rivals, those pharmacy margins have only gotten lower. In the old days, front-of-stores’ better profits helped raise overall margins. But alas for Walgreens, its retail business, left on autopilot for years, analysts say, has slipped—and in 2023 and 2024, the company posted a total of $11.7 billion in losses, among the highest totals of any Fortune 500 company.
Wentworth will likely soon be spared from having to publicly field any more investor questions. In March, Walgreens Boots Alliance announced that it had reached a deal to be bought by a private equity firm, Sycamore Partners, for $10 billion, in a transaction that will take it off the U.S. stock market after 98 years. The deal is expected to close in late 2025.
For Walgreens, going private is the culmination of an epic fall from grace. A decade ago, it was worth $100 billion, riding high on the buzz of a bold albeit controversial merger. But since then, its failings have sent shares down 91%. The company has been weakened by years of bad deal-making that left it with too many stores; detritus from failed efforts to become a successful player in healthcare; and a heavy debt burden.
In early 2024, Walgreens was removed from the Dow Jones Industrial Average, a sign of its rapidly declining relevance. Another indignity: in January, Walgreens suspended its quarterly dividend, one it had paid without fail for 91 years, to hold on to desperately needed cash.
On the bright side, going private will give the venerable chain’s leaders an opportunity to fix its many problems. Since taking the helm in 2023, Wentworth has repeatedly warned investors that many elements of the company need a time-consuming turnaround—from its tired stores, ill-equipped for the e-commerce era, to shrinking reimbursement rates, to demoralized staff. All that work will be more easily and quickly done away from Wall Street’s klieg lights.
“It’s hard to do under the microscope of quarterly check-ins with the investor community, so hopefully they can get back up there with the hard decisions they’re going to have to make,” says Michael Cherny, an analyst at Leerink Partners, an investment bank focused solely on health care.
Walgreens has in recent years undone, or is preparing to undo, some of its ill-advised acquisitions. It has already taken a $5.8 billion write-down on its acquisition of primary care provider VillageMD. But such changes leave the company extremely reliant on its core drugstore businesses, selling general merchandise and filling prescriptions to get out of the hole it has fallen into. Wentworth has won credit from analysts for his early progress in improving Walgreens’ cost structure, and his willingness to close money-sapping stores. But Wentworth, or whoever becomes CEO if Sycamore brings in someone else, faces a long, tough slog. (Walgreens declined to make Wentworth available for an interview; Sycamore declined to comment.)
“The next few quarters are about laying bricks, not finishing walls, to set the foundation for the company’s next chapter,” Jonathan Palmer, an analyst at Bloomberg Intelligence, wrote in a research note.
A long history, and grand ambitions
Walgreens, the U.S. druggist that is the biggest component of Walgreens Boots Alliance, was founded in 1901 when Chicago pharmacist Charles R. Walgreen bought the store at which he worked. By the time the Great Depression hit, the company was already a 500-store chain with locations far afield from Chicago, many of them anchored by lunch counters whose malted milkshakes and hot meals helped make the chain beloved.
A Walgreen Co store window in New York in 1929.
Irving Browning/The New York Historical Society/Getty Images
Later, Walgreens pioneered features like drive-through pharmacies and in 1999, an online pharmacy. It also became a front-runner in the pharmacy wars, along with CVS (initially called Consumer Value Stores) and Rite Aid. As these national chains emerged, they absorbed countless local drugstores along the way. By the early 2010s, after years of industry consolidation, CVS and Walgreens were duking it out for the top spot, each with about 10,000 locations at their peak, and Rite Aid a distant third.
By that point, the two behemoths, long interchangeable, were going in different directions. Walgreens believed that its scale and its millions of customers gave it clout with pharmacy benefits managers, or PBMs, which function as a type of go-between, negotiating how patients pay for drugs, what insurers owe drugmakers, and how much pharmacies are reimburses. It believed that clout would only grow if it continued its drugstore pharmacy land grab.
But CVS had already started to pursue ambitions well beyond its drugstore roots. The company bought Caremark, a leading PBM, in 2007 for $21 billion. Seven years later, CVS garnered big headlines when it stopped selling cigarettes and changed its name to CVS Health, making its new orientation unmistakable. It followed that move with several big acquisitions of clinics and specialty pharmacies.
While CVS reinvented itself, Walgreens kept fumbling the ball. In 2011, it overplayed its hand in a dispute with Express Scripts, a major PBM, and lost the business of millions of customers for years. That stoked investor interest in a new catalyst for growth and new management. Enter Italian billionaire Stefano Pessina, the largest shareholder in British druggist chain Alliance Boots.
In 2012, Walgreens bought a minority stake in Alliance Boots; it then bought the rest of it two years later for $10 billion in all. The deal was something of a reverse merger, with Pessina and his posse becoming CEO and top managers, respectively, of the newly minted Walgreens Boots Alliance. The idea was to create the first ever international drugstore chain operator and drug wholesaling company. And the plan might have worked—had it been executed well.
A pharmacy technician gives a customer their order at a Walgreens drive-thru window in Texas in 2000.
Karen Warren/Houston Chronicle via Getty Images
The Bad News Bears of M&A
Pessina, an M&A enthusiast (some might even say addict) was still caught up in the Walgreens vs. CVS race to be the chain with the most stores. Not long after the Boots Alliance merger, he set his eyes on Rite Aid, the third-place pharmacy contender, which had been struggling for years under $3 billion debt stemming from a 2006 deal to buy rival chains Eckerd and Brooks. The interest expense had been impeding Rite Aid from investing in keeping stores enticing enough to keep up with its bigger roles.
In 2015, Walgreens made a bid to buy Rite Aid and its 5,000 stores for $9.4 billion. But in a case of antitrust regulators saving a company from itself, the Federal Trade Commission blocked the deal but ultimately allowed Walgreens to buy only 2,100 stores. The result was a larger Walgreens store footprint—but one with tons of overlap, given the proximity of many Rite Aids to nearby Walgreens.
Walgreens had bragged for years about having the stores on the best corners: Now, it often had two stores within blocks of each other, cannibalizing each other’s sales. Last year, Wentworth announced Walgreens would close 1,200 stores out of 8,700. While he didn’t specify which ones had been Rite Aid locations, the store closures announcement was a tacit admission that much of the $4 billion Walgreens had plunked down for 40% of Rite Aid’s fleet had been a waste of money.
Even as Walgreens expanded its store footprint, some analysts were bemoaning the lack of innovation at and updating of its existing fleet. When Walgreens bought Boots, a chain beloved in Great Britain for sleek stores with cool beauty areas and for its No. 7 store brand, it touted how it could borrow from Boots’ playbook. But that never took place. “It was a massive missed opportunity to elevate Walgreens,” says Neil Saunders, managing director of GlobalData. He also sees Walgreens inertia as contributing to it losing much of its beauty industry market share to Ulta Beauty.
For both Walgreens and CVS, retail seemed to become an afterthought by the late 2010s. For both chains, the traditional retail piece should be a bonanza of easy, profitable sales, given how many people come into a Walgreens or a CVS to pick up their prescriptions. And excellent retail in turn should entice people to choose one store over another and visit often. That opportunity is even greater given the ubiquity of their stores: Some 78% of Americans live within 10 miles of a Walgreens. But consumers have choices, and Walmart, Amazon and Target have been more than happy to pick up that casual retail business, given their stronger e-commerce muscles and, Saunders says, much better prices.
“The drugstore is an ecosystem of a number of different parts of the business, from healthcare to prescriptions to retail and it only really works if you have all those engines whirring,” says Saunders. “Both CVS and Walgreens took their eyes off the ball ages ago and it’s had a detrimental impact on their pharmacy businesses.”
Both CVS and Walgreens have seen their front-of-store sales struggle for years, aside from a COVID bump fueled by vaccine-driven foot traffic in 2021. But retail is much more important to Walgreens than it is to CVS. (CVS has begun to see improvements in its retail business.)
Walgreens Boots Alliance executive chairman Stefano Pessina, the company’s former CEO; and current CEO Tim Wentworth.
Courtesy of Walgreens Boots Alliance
While Pessina doggedly pursued Rite Aid, CVS was head down, continuing to build out its health care empire and buying health insurer Aetna in 2018 for a whopping $69 billion. (That same year, Cigna bought Express Scripts in another mega-deal, shelling out $67 billion.) CVS’s ownership of Caremark, the biggest PBM in the U.S., had spurred millions of member customers to get their scripts filled at CVS stores, a hold made even stronger with the Aetna deal. (Still, that deal is at the center of CVS’s own current travails: Aetna’s profitability has sagged because of rising health care costs.)
Walgreens did eventually pivot its M&A more toward healthcare, but to little success. In fact, those deals have weakened it further and were the key reasons behind its stock’s implosion.
In 2013, in a move that ultimately hurt its reputation, Walgreens made a big investment in the health technology company Theranos, hoping to open dozens of its blood-testing clinics within its drugstores; but Theranos fell apart in scandal as its main product failed amid a fraud scandal. In 2020, Walgreens invested in VillageMD; the next year, it grabbed a controlling stake for $5.2 billion. It is now trying to offload that network of primary medical care clinics.
Also in 2022, under then-CEO Rosalind Brewer, previously of Walmart and Starbucks, VillageMD paid $9 billion for CityMD, another clinic chain, in another deal that has not paid off. Brewer abruptly left Walgreens in 2023, and Walgreens has unwound or is unwinding much of the M&A it has conducted in recent years.
Wentworth, who had earlier been CEO of Express Scripts and had a long career as a pharmacy and healthcare executive, replaced Brewer. Though he didn’t have much pure retail experience, he has made clear the caliber of Walgreen’s drugstores had to be taken up a notch for the company to emerge from its slump.
“The stores are central to our strategy,” he told a healthcare conference in March 2024.
Squeezing out savings
Wentworth has so far concentrated on cost cutting, with an initial goal of hitting $1 billion in savings, and focused Walgreens on being better at its core pharmacy business. One early move was to announce those 1,200 store closings over three years (some 500 of them are slated to happen this year), on top of the hundreds it has closed in recent years, the better to focus on the 80% of its stores that do turn a profit.
Neither Walgreens nor Sycamore has said whether Wentworth will stay on once the take-private deal is done. But it’s telling that Wentworth was chosen as CEO despite his inexperience with retail. That suggested that Pessina, who will keep a 17% stake in Walgreens after the Sycamore acquisition, and the rest of the board valued Wentworth’s PBM chops as a former PBM CEO himself, above all else.
And indeed, those shrinking pharmacy reimbursements have been a major source of Walgreens’ malaise. Leerink’s Cherney has said that is Walgreens’ biggest problem to solve.
CVS, tapping its Caremark clout, recently found a promising solution to shrinking pharmacy margins. Starting this year, all commercial prescriptions filled at a CVS will be reimbursed at the cost of the drug plus a predetermined markup and a handling fee. This model is called “CostVantage,” and Cherney says Walgreens could easily have its own version. “It wouldn’t be at all surprising if Walgreens became a fast follower,” he said. After all, Wentworth knows the PBM world intimately.
As for Wentworth’s lack of a retail background, this is where Sycamore’s extensive expertise in that industry could be useful. Sycamore has a long history of buying distressed retailers and helping them optimize their store operations. It has done so for such retailers as Belk department stores, The Limited, Staples, and Talbots.
At a Walgreens in Miami Beach, Florida, laundry detergent is under lock and key security for shoplifting prevention.
Jeffrey Greenberg—Universal Images Group via Getty Images
Walgreens has already taken some encouraging steps on the retail side. It has begun to beef up its roster of store brands with 300 new products; it is also remodeling many drugstores and is offering faster delivery than before. On the pharmacy side, Walgreens is trying to squeeze out costs with initiatives like using automated robotic prescription filling; it hopes to have that service in place by year-end in more than 5,000 of its stores.
On the other hand, Sycamore has never done a deal involving healthcare, raising some concerns about its ability to improve Walgreens’ underlying business. Media reports have suggested that Sycamore may break Walgreens into three pieces—its international business, its healthcare and its retail— essentially undoing almost all its M&A since the Boots deal.
Sycamore, and by extension Walgreens, will be taking on an enormous amount of debt—$12 billion—to make this acquisition happen. (Bloomberg estimates Walgreens could be facing an additional, separate liability of $1.5 billion from the opioid litigation against it; the chain has been accused by a number of state governments and the Justice Department of making millions of illegal opioid prescriptions, accusations it has denied.) Given Rite Aid’s recent bankruptcy, its second in consecutive years, because of the combination of deteriorating business and high debt, it’s not surprising to hear some alarms about the deal’s financing.
But bankruptcy theories aside, the even higher debt load and service post transaction certainly mean that Walgreens will have an even smaller margin of error in the near future. “They haven’t really cared for the business internally, and that’s led to the crunch they are in now,” says Saunders. It took a little over 10 years for the company to tumble from its Boots-merger heights to its current lows; its leadership probably doesn’t have 10 more years to right the ship.
Israel and Iran continued to bomb each other today, a scenario that used to be regarded as potentially disastrous for asset markets. But while the price of oil has risen as a result of the conflict, the rise has been moderate, and stock investors have been taking it easy. The U.S. dollar, however, has reached historically low levels of enthusiasm among institutional investors, according to Bank of America.
The Stoxx Europe 600 was down 0.9% in early trading but that was the only drama on global asset markets so far today. The VIX volatility index is in retreat after the S&P 500 put in a solid performance yesterday. S&P 500 futures were off only 0.7% this morning, premarket.
In Japan, stocks rose, but in China they were flat.
The major surprise this week seems to be the relaxed, almost upbeat attitude of investors toward the Israel-Iran conflict. U.S. stocks have been up over the last five trading sessions as traders await the U.S. Federal Reserve’s interest rate decision tomorrow. Fed chair Jerome Powell is expected to keep rates the same—it will be any change in his commentary that moves the markets.
Why are stocks shrugging off the bombing? The institutional bulls are back, according to Bank of America’s most recent survey of global fund managers. The survey calls on 222 panellists who have $587 billion under management. “The Bottom Line: investor sentiment recovers to pre-Liberation Day ‘Goldilocks bull’ levels as trade war & recession fears abate,” BofA’s Michael Hartnett and his team told clients in a note seen by Fortune.
Nonetheless, there’s still one asset that investors hate right now and that’s the U.S. dollar. The dollar has lost nearly 10% of its value against foreign currencies this year, according to the DXY index. Investors are now the most underweight in the dollar in 20 years, according to BofA. “[The] biggest summer pain trade is long the buck,” Hartnett et al said.
Antonio Ruggiero of Convera also noted feebleness of the dollar: “Surging oil prices—up as much as 12% on Friday amid escalating geopolitical tensions in the Middle East—have further exposed the dollar’s fading safe-haven appeal. A clear divergence is taking shape: oil rallies, yet the dollar fails to follow. This underscores how sentiment toward the US economy is acting as a stronger drag than what has historically been a dollar-positive force—higher oil prices, especially in periods of geopolitical risk. The result? Renewed selling pressure as confidence in US assets continues to erode,” he told clients.
“The dollar’s only meaningful support for now remains a hawkish Fed, now back in full alert mode – leaving those softer CPI prints in a distance past. Whether tariff-induced or driven by surging oil prices looming inflationary pressures put the Fed in a tougher position to deliver the rate cuts sought by the Trump administration—reinforcing the case for policy to remain steady for now.”
Here’s a snapshot of the action prior to the opening bell in New York:
S&P 500 futures were off 0.7% this morning. The index itselfclosed up 0.94% yesterday.
Blaise Metreweli, the first woman to head Britain’s MI6 spy service, is a self-confessed “geek” whose appointment comes as the intelligence world faces growing challenges from cyber plots and AI.
While actress Judi Dench has played the head of the MI6 Secret Intelligence Service (SIS) in the James Bond film franchise for years, in reality the 17 chiefs so far have all been men.
Metreweli will be the 18th head of Britain’s foreign intelligence outfit when she takes up the role in the autumn, Prime Minister Keir Starmer announced on Sunday.
Like her predecessors she will be referred to as “C” — not “M” as Dench is called in the movies based on Ian Fleming’s daring fictional agent.
The head of MI6 is the only publicly named member of the organisation and reports directly to the foreign minister.
Little is known about the 47-year-old Metreweli, who will take over from outgoing MI6 head Richard Moore.
Currently, she is MI6’s director general — known as “Q” — with responsibility for technology and innovation at the service, Downing Street said in a statement.
Metreweli is described as a career intelligence officer who joined the service in 1999 having studied anthropology at Cambridge University.
“She is an incredibly experienced, credible, successful operational officer. She is widely respected,” former MI6 chief Alex Younger told the BBC.
“She has been thinking deeply for a long time about how we prosper in the nexus between man and machine.
“She’s got a plan. And I think that she knows how to enact it. That is the way MI6 remains at the cutting edge,” he added.
Born into a family with roots in Eastern Europe — Metreweli derives from the Georgian name Metreveli — the future spy boss was part of the Cambridge rowing team that defeated Oxford in 1997.
She joined MI6 in 1999 as a field officer and “has spent most of her career in operational roles in the Middle East and Europe”, according to the UK government.
‘Historic’
Metreweli also spent time at MI5, the domestic intelligence service, as a director, the government said, without providing further details.
She speaks Arabic, according to UK media.
The Financial Times interviewed her in 2022 for an article on female spies, where she was initially quoted under a pseudonym to encourage other women to join the intelligence service.
She described herself as a “geek” and said she had always wanted to be a spy.
It was revealed that she grew up abroad, enjoyed learning encryption techniques at a young age, and had at least one child while stationed outside the UK.
Metreweli asserted that in the male-dominated world of intelligence, women had certain useful skills.
“In the moments where you’re deciding to become an agent, you’re having to make thousands of risk-based calculations, but you’re not quite sure how to respond emotionally,” she said.
“There’s no etiquette. Ironically, it becomes a bit of a no man’s land. In that space, women are really good at finding common ground. We are the liminal ones.”
Her appointment comes over three decades after MI5 appointed its first female chief.
Stella Rimington held the position from 1992-1996, followed by Eliza Manningham-Buller from 2002-2007.
The UK intelligence and security organisation GCHQ appointed its first woman chief, Anne Keast-Butler, in 2023.
Starmer called Metreweli’s appointment “historic”.
“The United Kingdom is facing threats on an unprecedented scale — be it aggressors who send their spy ships to our waters or hackers whose sophisticated cyber plots seek to disrupt our public services,” he said.
The Senate is expected to approve legislation Tuesday that would regulate a form of cryptocurrency known as stablecoins, the first of what is expected to be a wave of crypto legislation from Congress that the industry hopes will bolster its legitimacy and reassure consumers.
The fast-moving legislation, which will be sent to the House for potential revisions, comes on the heels of a 2024 campaign cycle where the crypto industry ranked among the top political spenders in the country, underscoring its growing influence in Washington and beyond.
Eighteen Democratic senators have shown support for the legislation as it has advanced, siding with the Republican majority in the 53-47 Senate. If passed, it would become the second major bipartisan bill to advance through the Senate this year, following the Laken Riley Act on immigration enforcement in January.
Still, most Democrats oppose the bill. They have raised concerns that the measure does little to address President Donald Trump’s personal financial interests in the crypto space.
“We weren’t able to include certainly everything we would have wanted, but it was a good bipartisan effort,” said Sen. Angela Alsobrooks, D-Md., on Monday. She added, “This is an unregulated area that will now be regulated.”
Known as the GENIUS Act, the bill would establish guardrails and consumer protections for stablecoins, a type of cryptocurrency typically pegged to the U.S. dollar. The acronym stands for “Guiding and Establishing National Innovation for U.S. Stablecoins.”
It’s expected to pass Tuesday, since it only requires a simple majority vote — and it already cleared its biggest procedural hurdle last week in a 68-30 vote. But the bill has faced more resistance than initially expected.
There is a provision in the bill that bans members of Congress and their families from profiting off stablecoins. But that prohibition does not extend to the president and his family, even as Trump builds a crypto empire from the White House.
Trump hosted a private dinner last month at his golf club with top investors in a Trump-branded meme coin. His family holds a large stake in World Liberty Financial, a crypto project that provides yet another avenue where investors are buying in and enriching the president’s relatives. World Liberty has launched its own stablecoin, USD1.
The administration is broadly supportive of crypto’s growth and its integration into the economy. Treasury Secretary Scott Bessent last week said the legislation could help push the U.S. stablecoin market beyond $2 trillion by the end of 2028.
Brian Armstrong, CEO of Coinbase — the nation’s largest crypto exchange and a major advocate for the bill — has met with Trump and praised his early moves on crypto. This past weekend, Coinbase was among the more prominent brands that sponsored a parade in Washington commemorating the Army’s 250th anniversary — an event that coincided with Trump’s 79th birthday.
But the crypto industry emphasizes that they view the legislative effort as bipartisan, pointing to champions on each side of the aisle.
“The GENIUS Act will be the most significant digital assets legislation ever to pass the U.S. Senate,” Senate Banking Committee Chair Tim Scott, R-S.C., said ahead of a key vote last week. “It’s the product of months of bipartisan work.”
The bill did hit one rough patch in early May, when a bloc of Senate Democrats who had previously supported the bill reversed course and voted to block it from advancing. That prompted new negotiations involving Senate Republicans, Democrats and the White House, which ultimately produced the compromise version expected to win passage Tuesday.
“There were many, many changes that were made. And ultimately, it’s a much better deal because we were all at the table,” Alsobrooks said.
Still, the bill leaves unresolved concerns over presidential conflicts of interest — an issue that remains a source of tension within the Democratic caucus.
Sen. Elizabeth Warren, D-Mass., has been among the most outspoken as the ranking member on the Senate Banking Committee, warning that the bill creates a “super highway” for Trump corruption. She has also warned that the bill would allow major technology companies, such as Amazon and Meta, to launch their own stablecoins.
If the stablecoin legislation passes the Senate on Tuesday, it still faces several hurdles before reaching the president’s desk. It must clear the narrowly held Republican majority in the House, where lawmakers may try to attach a broader market structure bill — sweeping legislation that could make passage through the Senate more difficult.
Trump has said he wants stablecoin legislation on his desk before Congress breaks for its August recess, now just under 50 days away.
Brian Armstrong, left, Co-founder and CEO of Coinbase, and Jeremy Allaire, Co-Founder, Chairman and CEO of Circle, participate in the State of Crypto Summit, in New York, on June 12, 2025.
Electric cars are losing their appeal for new drivers in Western nations, even as existing owners report increasing satisfaction with their battery-powered vehicles, according to a survey conducted by Shell Plc.
The findings show that high upfront cost remains a significant barrier to electric vehicle adoption, with drivers of gasoline-powered cars in both the US and Europe reporting declining interest in making the switch, the survey showed.
“While current EV drivers are feeling more confident, the relatively high cost of owning an electric vehicle, combined with broader economic pressures, are making it a difficult decision for new consumers,” Shell’s Group Executive Vice President of Mobility and Convenience, David Bunch, said in a statement on Tuesday. In Europe, 43% of non-EV drivers cited affordability as an issue.
The growing divide in attitudes toward electric cars emerged in a Shell survey of more than 15,000 drivers across China, Europe and the US. The level of interest in switching to an EV among internal combustion engine drivers in the US was 31%, compared with 34% in 2024, according to the survey. Interest from non-EV drivers in Europe decreased to 41% from 48% last year.
Of the countries surveyed, only China saw major gains, with single-vehicle owning EV drivers rising “from 72% to an impressive 89%,” Shell said. The country stands out globally for its significant advances both in the technology and the cost of battery-powered cars.
Globally, nine in 10 current EV drivers indicated they would consider a similar purchase for their next vehicle. About 60% of EV drivers said they worry less now than a year ago about running out of charge, while three-quarters said availability and choice of public charging points has improved, according to the survey.
While Shell has retreated from some of its low-carbon ventures, the company remains committed to EVs and has more than 75,000 charge points across the world. “More must be done to stimulate demand and ensure no one is left behind in the shift to cleaner transport,” Bunch said.
U.S. President Donald Trump and British Prime Minister Keir Starmer said Monday that they had signed a trade deal that will slash tariffs on U.K. auto and aerospace industry imports — but they are still discussing how to handle steel production.
The pair spoke to reporters at the Group of Seven summit in the Canadian Rockies, with Trump brandishing the pages of what he said was a long-awaited agreement. The rollout was anything but smooth, however, as Trump dropped the papers and at first said his administration had reached an agreement with the European Union when he meant the United Kingdom.
The president nonetheless insisted the pact is “a fair deal for both” and would “produce a lot of jobs, a lot of income.”
“We just signed it,” Trump said, “and it’s done.”
Starmer said it meant “a very good day for both our countries, a real sign of strength.”
He has since backed off on many of his proposed levies but also continued to suggest that administration officials were furiously negotiating new trade pacts with dozens of countries — even as few have actually materialized.
Trump said “the U.K. is very well protected,” from tariffs. “You know why? Because I like them.”
The signing of the deal at the G7 followed Trump and Starmer’s announcement in May that they’d reached a framework for a trade pact that would slash U.S. import taxes on British cars, steel and aluminum in return for greater access to the British market for U.S. products, including beef and ethanol.
But Monday’s agreement fully covers only British cars and aerospace materials, with more work to come on steel.
The British government said the new agreement removes U.S. tariffs on U.K. aerospace products, exempting Britain from a 10% levy the Trump White House has sought to impose on all other countries — a boost to British firms, including engine-maker Rolls-Royce.
It also sets the tax on British autos at 10% from the end of the month, down from the current 27.5%, up to a quota of 100,000 vehicles a year.
U.K. Business and Trade Secretary Jonathan Reynolds said the deal protects “jobs and livelihoods in some of our most vital sectors.” Mike Hawes, chief executive of Britain’s Society of Motor Manufacturers and Traders, said it was “great news for the U.K. automotive industry.”
But there was no final agreement to cut the tax on British steel to zero as originally foreseen — seen as vital to preserving the U.K.’s beleaguered steel industry. Britain’s steel output has fallen 80% since the late 1960s due to high costs and the rapid growth of cheaper Chinese production.
Monday’s agreement fleshes out the terms of the framework deal announced in May. That framework didn’t immediately take effect, leaving British businesses uncertain about whether the U.K. could be exposed to any surprise hikes from Trump.
British businesses, and the U.K. government, were then blindsided earlier this month when Trump doubled metals tariffs on countries around the world to 50%. He later clarified the level would remain at 25% for the U.K.
After the two leaders spoke, the White House released a statement seeking to clarify matters, saying that with respect to steel and aluminum, Commerce Secretary Howard Lutnick will “determine a quota of products that can enter the United States without being subject” to previous tariffs imposed by the Trump administration.
The British government said Monday that the plan was still for “0% tariffs on core steel products as agreed.”
Trump’s executive order authorizing the deal contained several references to security of supply chains, reflecting the U.S. administration’s concerns about China. It said the U.K. “committed to working to meet American requirements on the security of the supply chains of steel and aluminum products intended for export to the United States.”
There also was no final deal on pharmaceuticals, where “work will continue,” the U.K. said.
The deal signed Monday also confirms that American farmers can export 13,000 metric tons (29 million pounds) of beef to the U.K. each year, and vice versa — though a British ban on hormone-treated beef remains in place.
President Donald Trump drops papers as he meets with Britain's Prime Minister Keir Starmer on the sidelines of the G7 Summit, on June 16, 2025, in Kananaskis, Canada.
Senate Republicans on Monday proposed deeper Medicaid cuts, including new work requirements for parents of teens, as a way to offset the costs of making President Donald Trump’s tax breaks more permanent in draft legislation unveiled for his “big, beautiful bill.”
The proposals from Republicans keep in place the current $10,000 deduction of state and local taxes, called SALT, drawing quick blowback from GOP lawmakers from New York and other high-tax states, who fought for a $40,000 cap in the House-passed bill. Senators insisted negotiations continue.
The Senate draft also enhances Trump’s proposed new tax break for seniors, with a bigger $6,000 deduction for low- to moderate-income senior households earning no more than $75,000 a year for singles, $150,000 for couples.
All told, the text unveiled by the Senate Finance Committee Republicans provides the most comprehensive look yet at changes the GOP senators want to make to the 1,000-page package approved by House Republicans last month. GOP leaders are pushing to fast-track the bill for a vote by Trump’s Fourth of July deadline.
Sen. Mike Crapo, R-Idaho, the chairman, said the proposal would prevent a tax hike and achieve “significant savings” by slashing green energy funds “and targeting waste, fraud and abuse.”
Trump’s big bill is the centerpiece of his domestic policy agenda, a hodgepodge of GOP priorities all rolled into what he calls the “beautiful bill” that Republicans are trying to swiftly pass over unified opposition from Democrats — a tall order for the slow-moving Senate.
Fundamental to the package is the extension of some $4.5 trillion in tax breaks approved during his first term, in 2017, that are expiring this year if Congress fails to act. There are also new ones, including no taxes on tips, as well as more than $1 trillion in program cuts.
After the House passed its version, the nonpartisan Congressional Budget Office estimated the bill would add $2.4 trillion to the nation’s deficits over the decade, and leave 10.9 fewer people without health insurance, due largely to the proposed new work requirements and other changes.
The biggest tax breaks, some $12,000 a year, would go to the wealthiest households, CBO said, while the poorest would see a tax hike of roughly $1,600. Middle-income households would see tax breaks of $500 to $1,000 a year, CBO said.
Both the House and Senate packages are eyeing a massive $350 billion buildup of Homeland Security and Pentagon funds, including some $175 billion for Trump’s mass deportation efforts, such as the hiring of 10,000 more officers for Immigration and Customs Enforcement, or ICE.
This comes as protests over deporting migrants have erupted nationwide — including the stunning handcuffing of Sen. Alex Padilla last week in Los Angeles — and as deficit hawks such as Kentucky Sen. Rand Paul are questioning the vast spending on Homeland Security.
Senate Democratic Leader Chuck Schumer warned that the Senate GOP’s draft “cuts to Medicaid are deeper and more devastating than even the Republican House’s disaster of a bill.”
Tradeoffs in bill risk GOP support
As the package now moves to the Senate, the changes to Medicaid, SALT and green energy programs are part of a series of tradeoffs GOP leaders are making as they try to push the package to passage with their slim majorities, with almost no votes to spare.
But criticism of the Senate’s version came quickly after House Speaker Mike Johnson warned senators off making substantial changes.
“We have been crystal clear that the SALT deal we negotiated in good faith with the Speaker and the White House must remain in the final bill,” the co-chairs of the House SALT caucus, Reps. Young Kim, R-Calif., and Andrew Garbarino, R-N.Y., said in a joint statement Monday.
Republican Rep. Nicole Malliotakis of New York posted on X that the $10,000 cap in the Senate bill was not only insulting, but a “slap in the face to the Republican districts that delivered our majority and trifecta” with the White House.
Medicaid and green energy cuts
Some of the largest cost savings in the package come from the GOP plan to impose new work requirements on able-bodied single adults, ages 18 to 64 and without dependents, who receive Medicaid, the health care program used by 80 million Americans.
While the House first proposed the new Medicaid work requirement, it exempted parents with dependents. The Senate’s version broadens the requirement to include parents of children older than 14, as part of their effort to combat waste in the program and push personal responsibility.
Already, the Republicans had proposed expanding work requirements in the Supplemental Nutritional Assistance Program, known as SNAP, to include older Americans up to age 64 and parents of school-age children older than 10. The House had imposed the requirement on parents of children older than 7.
People would need to work 80 hours a month or be engaged in a community service program to qualify.
One Republican, Missouri Sen. Josh Hawley, has joined a few others pushing to save Medicaid from steep cuts — including to the so-called provider tax that almost all states levy on hospitals as a way to help fund their programs.
The Senate plan proposes phasing down that provider tax, which is now up to 6%. Starting in 2027, the Senate looks to gradually lower that threshold until it reaches 3.5% in 2031, with exceptions for nursing homes and intermediate care facilities.
Hawley slammed the Senate bill’s changes on the provider tax. “This needs a lot of work. It’s really concerning and I’m really surprised by it,” he said. “Rural hospitals are going to be in bad shape.”
The Senate also keeps in place the House’s proposed new $35-per-service co-pay imposed on some Medicaid patients who earn more than the poverty line, which is about $32,000 a year for a family of four, with exceptions for some primary, prenatal, pediatric and emergency room care.
And Senate Republicans are seeking a slower phase-out of some Biden-era green energy tax breaks to allow continued develop of wind, solar and other projects that the most conservative Republicans in Congress want to end more quickly. Tax breaks for electric vehicles would be immediately eliminated.
Conservative Republicans say the cuts overall don’t go far enough, and they oppose the bill’s provision to raise the national debt limit by $5 trillion to allow more borrowing to pay the bills.
“We’ve got a ways to go on this one,” said Sen. Ron Johnson, R-Wis.
Senate Finance Committee Chairman Mike Crapo, R-Idaho, arrives for a hearing with Treasury Secretary Scott Bessent on his budget requests for fiscal year 2026, at the Capitol in Washington, on June 12, 2025.
In today’s CEO Daily: Diane Brady talks to Cushman & Wakefield’s Michelle MacKay.
The big story: Trump may or may not be trying to get a ceasefire in Iran.
The markets: Resting easy.
Analyst notes from Convera on the weakening dollar, Macquarie on Iran and the oil market, and Oxford Economics on business sentiment
Plus: All the news and watercooler chat from Fortune.
Good morning. Cushman & Wakefield’s Michelle MacKay, Larry Culp of GE, Richard Dickson of The Gap, and Carol Tomé of UPS all have something in common: They were appointed CEO after serving on the boards of companies they now run. Such board-to-CEO transitions have become more common for multiple reasons, from the complexity of the business landscape to a desire for boards to instil seasoned leaders they know and trust. For MacKay, serving on three public boards after retirement stoked her ambitions to take on a CEO role.
“Those three years that I spent in board seats, with a little more time for myself, were probably the most important years of my career journey, which is ironic, because I wasn’t working full time,” MacKay told Fortune in this week’s Leadership Next podcast. “I really hadn’t stepped back in a number of years and reconsidered my own path.”
Her background in finance and real estate were appealing at a time of declining revenues. When Cushman’s then-CEO John Forrester asked MacKay if she’d consider becoming CFO of the company, she said no, instead agreeing to become COO in 2020 with a clear path to becoming CEO in July of 2023. “It was a big challenge with a big brand and I had somebody who backed me from the onset. And I thought, ‘You know what? We got one version here, one life. I’m just going to go for it.’”
While tariffs, geopolitics and other issues continue to weigh on the global outlook for commercial real estate services, MacKay has led the firm to growth again. Board service gave her a holistic view of not only the company but also her career.With CEO turnover near record highs for much of the past year, more leaders may find a period of pause on boards inspires them to return to corporate leadership with fresh eyes and purpose. Said MacKay: “Can one be too engaged? I don’t think so.” You can listen to the podcast here on Apple or Spotify. More news below.
President Donald Trump abruptly left the Group of Seven summit Monday, departing a day early as the conflict between Israel and Iran intensified and the U.S. leader declared that Tehran should be evacuated “immediately.”
World leaders had gathered in Canada with the specific goal of helping to defuse a series of global pressure points, only to be disrupted by a showdown over Iran’s nuclear program that could escalate in dangerous and uncontrollable ways. Israel launched an aerial bombardment campaign against Iran four days ago.
At the summit, Trump warned that Tehran needs to curb its nuclear program before it’s “too late.” He said Iranian leaders would “like to talk” but they had already had 60 days to reach an agreement on their nuclear ambitions and failed to do so before the Israeli aerial assault began. “They have to make a deal,” he said.
Asked what it would take for the U.S. to get involved in the conflict militarily, Trump said Monday morning, “I don’t want to talk about that.“
So far, Israel has targeted multiple Iranian nuclear program sites but has not been able to destroy Iran’s Fordo uranium enrichment facility.
The site is buried deep underground — and to eliminate it, Israel may need the 30,000-pound (14,000-kilogram) GBU-57 Massive Ordnance Penetrator, the U.S. bunker-busting bomb that uses its weight and sheer kinetic force to reach deeply buried targets. Israel does not have the munition or the bomber needed to deliver it. The penetrator is currently delivered by the B-2 stealth bomber.
By Monday afternoon, Trump warned ominously on social media, “Everyone should immediately evacuate Tehran!” Shortly after that, Trump decided to leave the summit and skip a series of Tuesday meetings that would address the ongoing war in Ukraine and global trade issues.
As Trump posed for a picture Monday evening with the other G7 leaders, he said simply, “I have to be back, very important.”
Canadian Prime Minister Mark Carney, the host, said, “I am very grateful for the president’s presence and I fully understand.”
Crises abound
The sudden departure only heightened the drama of a world that seems on verge of several firestorms. Trump already has hit several dozen nations with severe tariffs that risk a global economic slowdown. There has been little progress on settling the wars in Ukraine and Gaza.
But in a deeper sense, Trump saw a better path in the United States taking solitary action, rather than in building a consensus with the other G7 nations of Canada, France, Germany, Italy, Japan and the United Kingdom.
British Prime Minister Keir Starmer, French President Emmanuel Macron, Italian Premier Giorgia Meloni and German Chancellor Friedrich Merz held an hourlong informal meeting soon after arriving at the summit late Sunday to discuss the widening conflict in the Mideast, Starmer’s office said.
And Merz told reporters that Germany was planning to draw up a final communique proposal on the Israel-Iran conflict that will stress that “Iran must under no circumstances be allowed to acquire nuclear weapons-capable material.”
The G7 leaders all signed a joint statement Monday night saying Iran “can never have a nuclear weapon” as they urged a “broader de-escalation of hostilities in the Middle East, including a ceasefire in Gaza.”
Trump, for his part, said Iran “is not winning this war. And they should talk and they should talk immediately before it’s too late.”
But by early Monday evening, as he planned to depart Kananaskis and the Canadian Rocky Mountains, Trump seemed willing to push back against his own supporters who believe the U.S. should embrace a more isolationist approach to world affairs. It was a sign of the heightened military, political and economic stakes in a situation evolving faster than the summit could process.
“AMERICA FIRST means many GREAT things, including the fact that, IRAN CAN NOT HAVE A NUCLEAR WEAPON. MAKE AMERICA GREAT AGAIN!!!” Trump posted on Truth Social, his social media platform.
It’s unclear how much Trump values the perspective of other members of the G7, a group he immediately criticized while meeting with Carney. The U.S. president said it was a mistake to remove Russia from the summit’s membership in 2014 and doing so had destabilized the world. He also suggested he was open to adding China to the G7.
High tension
As the news media was escorted from the summit’s opening session, Carney could be heard as he turned to Trump and referenced how the U.S. leader’s remarks about the Middle East, Russia and China had already drawn attention to the summit.
“Mr. President, I think you’ve answered a lot of questions already,” Carney said.
The German, U.K., Japanese and Italian governments had each signaled a belief that a friendly relationship with Trump this year can help keep public drama at a minimum, after the U.S. president in 2018 opposed a joint communique when the G7 summit was last held in Canada.
Going into the summit, there was no plan for a joint statement this year.
The G7 originated as a 1973 finance ministers’ meeting to address the oil crisis and evolved into a yearly summit meant to foster personal relationships among world leaders and address global problems. It briefly expanded to the G8 with Russia as a member, only for Russia to be expelled in 2014 after annexing Crimea and taking a foothold in Ukraine that preceded its aggressive 2022 invasion of that nation.
Beyond Carney and Starmer, Trump had bilateral meetings or pull-aside conversations with Merz, Japanese Prime Minister Shigeru Ishiba and European Commission President Ursula von der Leyen.
He talked with Macron about “tariffs, the situation in the Near and Middle East, and the situation in Ukraine,” according to Macron spokesperson Jean-Noël Ladois.
On Tuesday, Trump had been scheduled before his departure to meet with Mexican President Claudia Sheinbaum and Ukrainian President Volodymyr Zelenskyy. Zelenskyy said one of the topics for discussion would be a “defense package” that Ukraine is ready to purchase from the U.S. as part of the ongoing war with Russia, a package whose status might now be uncertain.
Tariff talk
The U.S. president has imposed 50% tariffs on steel and aluminum as well as 25% tariffs on autos. Trump is also charging a 10% tax on imports from most countries, though he could raise rates on July 9, after the 90-day negotiating period set by him would expire.
He announced with Starmer that they had signed a trade framework Monday that was previously announced in May. The trade framework included quotas to protect against some tariffs, but the 10% baseline would largely remain as the Trump administration is banking on tariff revenues to help cover the cost of its income tax cuts.
Canada and Mexico face separate tariffs of as much as 25% that Trump put into place under the auspices of stopping fentanyl smuggling, through some products are still protected under the 2020 U.S.-Mexico-Canada Agreement signed during Trump’s first term.
Merz said of trade talks that “there will be no solution at this summit, but we could perhaps come closer to a solution in small steps.”
Carney’s office said after the Canadian premier met with Trump on trade that “the leaders agreed to pursue negotiations toward a deal within the coming 30 days.”
(L-R) French President Emmanuel Macron, Canadian Prime Minister Mark Carney and US President Donald Trump attend a family photo during the Group of Seven (G7) Summit at the Kananaskis Country Golf Course in Kananaskis, Alberta, Canada on June 16, 2025.
The pharma giant will lose its patent protection on semaglutide, which is sold as Ozempic and Wegovy, in Canada after not paying a nominal maintenance fee years before it became a blockbuster drug for fighting diabetes and obesity, Science reported. Novo Nordisk generates billions of dollars in revenue on the drug in Canada, but patent protection is due to end next year.
Years before semaglutide became a blockbuster drug for Novo Nordisk, the Danish pharma giant had a chance to maintain its patent in Canada but didn’t pay a small fee to do so, according to a recent report in Science.
The drug, which is sold as Ozempic and Wegovy, has made so much money for Novo Nordisk after exploding in popularity in the last few years that it has even impacted Denmark’s currency and interest rates.
To keep the semaglutide patent in Canada, the company had to pay an annual fee of just 250 Canadian dollars (~$185 USD). While it paid that amount in 2018, Science reported that it didn’t the following year.
The Canadian government offered Novo Nordisk another chance to keep its patent, this time with an additional charge that brought the total to 450 Canadian dollars ($331 USD).
“In order to prevent the patent from lapsing, the amount listed above, which includes the required maintenance fee and the late payment fee, must be paid within the one year period of grace following the filing date anniversary,” a letter from regulators said, putting the anniversary date at March 20, 2019. “Once a patent has lapsed it cannot be revived.”
Makers of generic drugs have taken notice, with Science pointing to recent comments from the company Sandoz that it has filed to launch a generic GLP-1 in Canada next year and expects approval sometime in the first quarter when exclusivity expires.
“Interesting market. Novo never filed a patent in Canada. Never know why,” Sandoz CEO Richard Saynor told Endpoints News earlier this month. “I’m sure someone’s lost their job, but never mind. It’s the second-largest semaglutide market in the world.”
In a statement to Fortune, Novo Nordisk said there was no mistake regarding its patent maintenance fee in Canada and declined to comment on other drug manufacturers’ plans.
“All intellectual property decisions are carefully considered at a global level,” the company added. “Periods of exclusivity for pharmaceutical products end as part of their normal lifecycle and generic treatments may become available over time.”
The company confirmed that protection for semaglutide regulatory submissions in Canada will expire in 2026.
Meanwhile, Ozempic patents expire several years later in other big markets like the U.S. (2032), Japan (2031), and Europe (2031), according to the company’s most recent annual report.
Last year, Novo Nordisk generated about $19 billion in global Ozempic sales and about $9 billion in Wegovy sales. In Canada, retail pharmacies there booked Ozempic sales of 2.5 billion Canadian dollars.
Carry incentives have arrived in traditional finance as firms look to align executive compensation with growing parts of the business. If the trend continues, however, it could incite more blowback from proxy advisors, who have recently taken a sterner look at executive pay at both BlackRock and Goldman Sachs.
Investment banks and traditional asset managers are starting to look more like private-equity firms—and the same may soon be said for how most pay their top executives.
In the alternative asset world, fund managers are paid a share of the profits, known as “carried interest,” if they achieve a minimum return. Leaders at Goldman Sachs and BlackRock will now get similar awards as part of their compensation, both firms announced this year, and an expert in industry pay expects these moves to be the start of a burgeoning trend.
It makes sense for Goldman Sachs and BlackRock to be first movers, said Bryan Liou, a managing director at compensation consulting firm Johnson Associates. Goldman has over $500 billion in private assets under its supervision, making it one of the top 10 alternative asset managers in the world, which the investment bank has used to justify a carry incentive program for CEO David Solomon, president John Waldron, and other firm-wide leaders.
BlackRock, meanwhile, has introduced a similar award for CEO Larry Fink. His firm is set to manage more than $600 billion in private assets after a series of major acquisitions last year, including a $3.2 billion takeover of alt market data company Preqin.
Most importantly, Liou said, both firms have signaled to shareholders and competitors alike that they are very serious about their positioning in private markets.
“Any firm that is taking alternatives seriously right now is going to be taking a look at what Goldman’s doing, what BlackRock is doing,” he told Fortune, “and at least asking the question if they should do the same.”
Carry incentive controversies
If the trend does pick up, Liou said, it could incite blowback from the major shareholder advisory firms, which provide guidance for clients to vote on proposals regarding executive pay, corporate governance, and other issues.
Institutional Shareholder Services, also known as ISS, told investors to vote against approving Larry Fink’s $31 million compensation package from 2024, saying the new carry incentive (which was not distributed last year) added complexity without offsetting any other pay opportunities. Nonetheless, 67% of shareholders backed the pay package in a nonbinding vote last month, still below the 90% mark commonly hit before last year.
Goldman, meanwhile, came under fire from both ISS and the other major proxy advisor, Glass Lewis, for $80 million stock-based retention bonuses for Solomon and Waldron. Support from investors dropped to its lowest level in nearly 10 years.
For Liou, however, bringing carry incentives to traditional finance is a way to ensure executive compensation reflects the company’s emphasis on alternative assets as a key source of future growth.
“If you look at the size of the awards relative to what these executives [are] getting paid,” he said of BlackRock and Goldman’s carry incentives, “it’s actually a relatively small proportion.”
Of course, the topic of carried interest has also been controversial politically. Like long-term capital gains, it is typically taxed at a rate of 20%. A tax bracket of 22%, meanwhile, currently applies to any individual taxpayer who makes over $47,151; Steve Schwarzman, the CEO at alternative-asset giant Blackstone, took home nearly $900 million last year.
President Donald Trump has said he wants to end this carry “loophole,” telling Republican lawmakers in February it was a priority, White House Press Secretary Karoline Leavitt said at the time. However, no such measure is featured in the GOP spending bill under consideration in the Senate.
Goldman Sachs CEO David Solomon (far right) and president John Waldron (second from right) will now receive carry incentives like Stephen Schwarzman (center), the head of private equity giant Blackstone.
Canva co-founder Cliff Obrecht is on the hunt for ‘AI natives’—even those who have dropped out of college. Speaking to Fortune at VivaTech in Paris, Obrecht said the company sees high value in hiring less traditional candidates who natively understand AI tools and workflows. As AI threatens to change the job market rapidly, Obrecht says that curiosity and adaptability are becoming more valuable than ever.
With anxiety mounting over the mass automation of entry-level jobs, job-seekers with AI skills may now have an edge over those with university credentials. Canva co-founder and COO Cliff Obrecht told Fortune the company is actively hiring AI-savvy college students regardless of whether they finish their degrees.
Obrecht said Canva is increasingly looking for “AI natives” when hiring new staffers and is benefiting from university dropouts when it comes to engineering talent.
“We are looking to actually hire second to fourth-year university graduates because they are AI natives,” Obrecht said in an interview at Viva Technology in Paris.
“Hiring a lot of junior people who are native at building agentic workflows and picking up AI first is just a different way of thinking about building products,” he added. “We are actually getting a lot of value from bringing in those university dropouts.”
Obrecht said most organizations are currently trying to up-skill engineers on AI coding tools in the hopes of productivity gains, but he was looking to hire less experienced talent who have a stronger grasp of the current AI tools on offer.
“They’re really good hires, especially when you add them to a nontechnical team and up-skill the rest of the organization. They’re AI natives and become evangelists in the organization and really help drive that mindset shift,” he said.
What is an ‘AI native’?
The discourse around AI-fueled job losses, particularly concerning entry-level work, has been heating up recently and has created somewhat of a divide in the tech industry.
Anthropic CEO Dario Amodei sparked a fierce debate with his recent prediction that AI could wipe out roughly 50% of all entry-level white-collar jobs within the next five years. While some, including Nvidia CEO Jensen Huang, have pushed back on Amodei’s predictions, recent data suggests that some entry-level work may already be under pressure from the rise of automation.
Companies are also increasingly looking to incorporate AI into their workflows in the hope of productivity gains, with some putting in formal requirements for workers to embrace the tech. But getting ahead of the curve when it comes to AI skills is less about using ChatGPT every day and more about being at the forefront of the technology, according to Obrecht.
“An AI native has got a deep understanding of the AI tools in their tool belt,” he said. “And they’re constantly at the forefront of creating agents, chaining multiple complex AI workflows together—maybe from different products and providers—to create unified experiences. They have a goal in mind, and that goal isn’t just delivered through single AIs. It’s connected to a bunch of different things.”
Obrecht sees AI natives as “curiosity-focused” rather than confined to one certain generation.
“You can be a hungry, curious person who sees this brand new technology changing our world, and be someone who’s like ‘I want to learn everything I can about this part of this.’ That curiosity is the key attribute that leads to someone beingsuccessful in companies now,” he said.
The Federal Reserve is expected to hold interest rates steady. Investors will be keeping a close eye on Fed officials’ latest economic projections—known as the “dot plot.” Any variance between the most bearish and most bullish officials might hold a key for the future of U.S. monetary policy.
As the Federal Open Market Committee prepares to meet on Tuesday and Wednesday, the financial world largely already knows what to expect: more patience.
Throughout the year, the Fed has sought to remind investors the economy is still strong. Unemployment hasn’t spiked, and inflation has remained just north of 2%, despite fears to the contrary amid the White House’s aggressive tariffs. Even the stock market has mostly recovered from an extremely tumultuous April.
But there are some signs of sagging across the economy. Continuing jobless claims are at three-year highs, suggesting it’s harder for unemployed people to find new jobs, and manufacturing surveys have come in below expectations.
The key question investors and the Fed are trying to answer is whether this slight slackening presages a far worse outlook, even a recession, or whether reports of rising uncertainty merely reflect people’s feelings, not economic reality.
Despite the relative stability of inflation and the unemployment rate, a wave of uncertainty swept over investors this year, in large part because of the rampant changes to trade policy that upset global markets. Yet, Fed Chair Jerome Powell has argued the strength of the economic data, not sentiment, meant the central bank didn’t have to rush into making a decision on interest rates.
Investors expect the Fed will keep interest rates at their current levels of 4.25%-4.5% when policymakers wrap up their meeting Wednesday afternoon. They also see a rate cut later this year as a practical certainty, with a 93% probability of easing by the end of the year, according to CME FedWatch.
Meanwhile, President Donald Trump (and more recently Vice President J.D. Vance) have complained that Powell is taking too long to lower rates. Trump has also repeatedly questioned the merits of keeping the Federal Reserve independent, believing he should be involved in setting interest rates. Despite Trump’s unprecedented level of commentary about the Fed, Powell has always refused to comment on the White House’s criticisms.
“The Fed always seems to look for ‘the preponderance of evidence’ and has done so even when it has been accused of being too slow to act,” Melissa Brown, managing director investment decision research at SimCorp, told Fortune. “I think now they particularly want to assert their independence, so until there is something resembling a preponderance—one way or another—it seems to me they are most likely to keep rates where they are.”
The second dot plot of the year
The upcoming FOMC meeting will also include the latest iteration of committee members’ expectations for the federal funds rate. The so-called “dot plot” will help clue in investors to the variety of opinions on the committee, even as they expect the median response to be between one to two cuts in 2025.
It’s important for investors to get a sense of where the outliers on the dot plot are as well because that will help them understand whether Fed officials are more concerned about high inflation or low growth, according to Mike Reynolds, vice president of investment strategy at Glenmede.
There are “two completely separate policy playbooks on how to deal with each,” Reynolds said.
It’s common for Fed officials’ outlooks to be somewhat similar around this time of the year. But that may not be the case currently. “Generally the dots for the year tend to coalesce around a consensus, given uncertainty we wouldn’t expect that [this year],” he told Fortune. “The dots will remain more dispersed than usual.”
Last quarter’s dot plot showed committee members expected slower growth and higher inflation compared to their December forecasts. This time around, they are contending with slightly more conflicting data, as manufacturing metrics and GDP outlooks fell despite the fact job growth has continued and corporate earnings remain strong, according to Brown.
The new developments that saw manufacturing investment slow and GDP growth slip in the first quarter still aren’t enough to spur action from the Fed. Given that the Fed will likely stay its hand on rates, investors will take to parsing Powell’s words even more closely. They’ll want to know if and how this new batch of data is affecting Powell’s outlook.
After several months of rampant instability and rising anxiety about the future of the U.S. economy, investors will be eager to see if the Fed believes all that concern is having an effect.
“We haven’t seen concrete action that’s followed through on this heightened uncertainty,” Reynolds said.
Trump’s former Commerce Secretary, Wilbur Ross, warns that while the U.S. has achieved notable progress in trade negotiations, overconfidence could lead American negotiators to push too hard for concessions foreign governments cannot make. He is particularly concerned that “chesty” tactics with complex partners like the European Union could stall agreements—something Jamie Dimon has warned could ultimately strengthen America’s rivals.
As the world’s largest economy, America can be fairly confident in its negotiating power with trading partners. However, the Trump administration cannot overplay its hand as it may result in allies being pushed into the arms of rivals, according to experts like former Commerce Secretary Wilbur Ross and Jamie Dimon.
Meanwhile President Trump’s former Commerce Secretary, Wilbur Ross, is concerned that the administration’s Achilles heel may prove to be its confidence—potentially spurred by quickly signing framework deals with the likes of the U.K. and China.
He told Fortune in an exclusive interview: “The very fact that they’ve made as much progress as they have shows the basic power of the U.S. to get people to come around.”
“In fact my one fear is that if our government feels too chesty with their progress, they may overplay the hand and get to levels that are hard—maybe even impossible—for the other countries to give in. That’s my biggest worry right now because it’s easy to get carried away with early successes.”
As well as a deal with the U.K. being reached and a framework with China, positive signals are also coming out of talks with India and Japan.
“What I think is very important [is] … even though they’ve taken initiatives with some 70-odd countries, in reality, there are only about four or five that make a lot of difference because they’re the ones that move the needle, and [Trump] seems to be doing pretty well,” Secretary Ross added.
“With, I would say, the exception of the EU … it’s very difficult for the EU to make trade concessions because it’s not really one entity. You’ve got the 27 member states and each one of those has a different set of objectives, but each one has veto power, so it’s very tough to get a deal with the EU.”
Already, the president has vented his frustrations with a lack of progress when it comes to negotiating with the EU, previously posting an outburst on Truth Social saying the EU would be facing a 50% tariff because of its lack of action. This 50% tariff was then paused for 90 days.
When asked by Fortune which region may lead to a stalemate in talks, Secretary Ross said: “The EU is definitely a possibility, simply because it’s hard for them to take a united front.
“But someone like a Vietnam, on whom he has imposed huge tariffs … that one frankly surprised me a little bit in that the reason our trade deficit suddenly shot up with Vietnam is there was a lot of factory movement from China to Vietnam.”
Keeping the European Union close in particular is a key concern of Dimon’s, on account of its history and the potential fragmentation of the bloc.
“This is going to be hard, but our country’s goal should be to help make European nations stronger and keep them close. If Europe’s economic weakness leads to fragmentation, the landscape will look a lot like the world before World War II,” he wrote earlier this year. Such fragmentation, over time, would increase European dependency on China and Russia, essentially turning Uncle Sam’s former allies into “vassal states” of its rivals.
Blackstone CEO and co-founder Steve Schwarzman would have a strong case to be in a circumspect mood as he visits the company’s European headquarters in London.
In addition to celebrating Blackstone’s 25th anniversary of European operations this week, the 78-year-old Schwarzman is on the cusp of tipping Warren Buffett to the mantle of the longest-running, still-serving Fortune 500 CEO, once the Berkshire Hathaway boss steps down at the end of the year.
Scharzman’s response to a question about his thoughts on his legacy, though, was to quickly brush it aside: “I don’t think about legacy,” he told Fortune in London.
“I think about what our opportunities are and what we can build, and that’s the way I’ve always thought.”
It was a fitting, then, that Schwarzman rang in the anniversary by revealing last week that Blackstone intended to invest at least $500 billion in assets across Europe over the next 10 years.
Blackstone’s latest pledge represents a significant ramp-up in the company’s European operations, adding to the current $350 billion worth of assets built over the last 25 years.
“The fact that Europe hasn’t been as creative in terms of new products and other types of innovations is, frankly, great for us.”
Steve Schwarzman, Blackstone CEO and co-founder
The group has steadily amassed a portfolio of property assets, data centers, leisure facilities, and logistics centers in a bid to capitalize on the country’s lagging infrastructure push this century, with government support weighed down by the global financial crisis and ensuing austerity policies.
“The fact that Europe hasn’t been as creative in terms of new products and other types of innovations is, frankly, great for us,” said Schwarzman.
“It’s a very large economy, and it’s got a lot of friction, and that’s often when you could make very good investments.”
Europe’s opportunity
Blackstone, for the last 25 years in Europe, has made hay while most of the region’s economies struggled with low growth. The U.S.-originating company has been able to use its vast swathes of capital to buy up real estate assets below their value and develop them to make sizeable profits.
When it first moved in on Europe, Blackstone identified historic, unloved assets that could quickly build value, with a $850 million deal to buy the historic Savoy hotel its first major U.K. investment.
Blackstone bought the short-break holiday chain Centre Parcs in 2006, before selling it for reportedly double the value in 2015. Alongside the Lego founding family, Blackstone took the Merlin Group, which runs attractions like Madame Tussauds, the London Eye, and Legoland, private in 2019. Blackstone had previously grown the group from an initial value of £100 million to £5 billion when it listed on the London Stock Exchange in 2013. The group has since pivoted to identifying high-growth sectors that outshine Europe’s average underlying GDP growth numbers. Blackstone is emboldened by recent developments on both sides of the Atlantic.
“In the last couple of months, Europe has sent some of the most positive signals we’ve seen in a long time,” says Lionel Assant, Blackstone’s co-chief investment officer and European head of private equity. He cites Germany’s relaxation of its fiscal rules to allow a $1 trillion-plus investment drive to bump up its defense industry and wider infrastructure.
“Right neighborhood, right price, right intervention.”
Lionel Assant, Blackstone’s co-chief investment officer and European head of private equity, on Blackstone’s three cardinal rules for investing
The U.K., which Blackstone’s president and COO, Jon Gray, also praised under the Labour government, got kudos from Assant for its attempts to rebuild ties with the EU after Brexit.
While Gray expects the U.S. to continue to grow faster than any developed market, he says the uncertainty caused by the Trump administration is playing into the European investment proposition.
Assant says Blackstone’s investments need to abide by three cardinal rules: “Right neighborhood, right price, right intervention.” In Europe, where growth has been lower than the U.S. and Europe, those rules are even more important, according to Assant.
Assant says the group has identified logistics centers closer to cities, betting that online shopping is only likely to increase and customers will pay to get their goods quicker. Electricity providers and data centers have also become more crucial with the growth of AI: “It takes way more electricity if you use ChatGPT than if you use Google,” Assant uses as an example.
“Europe has had a tough run, and there has been, I think, a feeling from a lot of investors, like, ‘Oh, I don’t want to invest in Europe.’ And I think it’s nice to say no, Europe matters, the U.K. matters, London matters,” said Gray.
Europe’s quirks
The bane of many in Europe has been the continent’s relatively weak public markets. More than 96% of the region’s $100 million-plus revenue companies are private, according to analysis by Apollo Global Management. By comparison, the group calculates the U.S. share at 87%. Blackstone puts the figure at around 90% for Europe.
Some of Europe’s biggest financial players, including EQT, have called for an overhaul of public markets to improve liquidity and inspire more risk and investment.
For Blackstone, though, that phenomenon has proved a goldmine.
“If you don’t have access to these businesses, then you’re missing 90% of the market,” said Assant. “I would say it’s probably not very prudent. It means you’re not very diversified.” The company has taken private several European firms, like Merlin, removing them from the scrutiny of quarterly reports and pressure for immediate returns on investment.
“What matters is a starting point and the end point, and because these two points are five to 10 years apart, we can take the time to make the right decisions and the right investment,” said Assant.
As a private equity and real estate company in Europe, Blackstone has faced inevitable skepticism.
Blackstone president and COO Jon Gray sits with U.K. Prime Minister Keir Starmer in New York.
Leon Neal/Getty Images
Gray describes how the movie Pretty Woman had played a part in perceptions of private equity globally. In that movie, released in 1990, Richard Gere’s character specializes in buying up distressed, long-running businesses and stripping them for parts.
The Blackstone president says the comparison “frustrates” him: “When we first showed up to buy the Savoy, if you went back, it was a little bit of, ‘Oh my gosh, the American vultures are here.’”
It’s different now, he says, as Blackstone focuses on buying assets that have the potential to improve in value. “The emphasis on cost takeout is really not what it’s about. It’s really about growth.” That the company has consistently grown its European assets in the face of the global financial crash, the sovereign debt crisis, and Brexit is testament to that mantra.
Blackstone is particularly fond of its work on places like the Savoy and Claridge’s. The King of Greece, a frequent patron of the latter before and after Blackstone’s involvement, sent Schwarzman a personal letter of thanks for the company’s restoration of Claridge’s.
Still, Blackstone has felt the firm hand of local regulations on some of its value-building endeavors. Housing has been a sensitive matter. Denmark intervened to regulate how much Blackstone and other large private investors could hike rents after renovations. The group faced similar obstacles in Spain. Blackstone has also faced accusations of contributing to gentrification through its strategy of renovating properties before increasing their price. The company has refuted those claims, arguing it has contributed to increased housing supply in Europe.
“That’s the segment where the bar is highest, in terms of making sure we get things as right as we possibly can,” said James Seppälä, Blackstone’s head of European real estate about his unit’s residential assets. “We need to be acutely conscious of that and we need to do the very best jobs we can in that context,” he said, while admitting the company sometimes makes mistakes.
The group has since focused on putting capital towards increasing the supply of housing, and has built up a portfolio of affordable housing and shared ownership units across the U.K., becoming the largest provider of affordable homes in England for the past four years. Last year, Blackstone sold £405 million ($548 million) worth of U.K. homes it had helped build to the USS pension fund.
Blackstone’s people
As he approaches 40 years at the helm of the company he co-founded, CEO Schwarzman is naturally a fountain of knowledge on recruiting. Blackstone now has around 800 employees across Europe and the Middle East, with more than 650 of them based in London. A new headquarters is under construction in the affluent Berkeley Square in Mayfair.
Courtesy of Blackstone
“It usually starts out with an American landing on the beach, putting together a team,” Schwarzman said of how he has built a Blackstone culture in Europe over this century.
Each Blackstone employee, Schwarzman says, has the same traits.
“First, they’re very nice people. Secondly, they’re quite smart. Third, they’re extremely hardworking. Fourth, they have the will to win. Fifth, they don’t sleep much. And sixth, they’re working in a place that’s a meritocracy, that’s designed for each of their individual successes.” That final point is reflective of an arguably European mindset and was informed by Schwarzman’s time in the cutthroat culture of Lehman Brothers.
Even as Europe locks in for a new era of growth, Schwarzman is confident it will continue to take advantage of the region’s historic pessimism to unlock value.
“One person’s pessimism is another person’s opportunity,” said Schwarzman. “And so that’s one reason we like Europe.
“Europeans become somewhat more pessimistic, certainly than Americans. And from time to time, that’s inappropriate.”
Being in the C-suite is a high-pressure job with long hours, board responsibilities, and intense scrutiny. But what is it like to be a top executive when you’re off the clock?
Fortune’s series, The Good Life, shows how up-and-coming leaders spend their time and money outside of work.
Today, we meet Doina Ionescu, general manager of the healthcare division at Merck.
Raised in Romania, the 56-year-oldjoined the Fortune 500 pharmaceutical giant, Merck, after being personally impacted by the 1986 Chernobyl power station disaster.
In 1998, her father, along with others in their village, passed away from cancer after experiencing radiation exposure from Chernobyl.
“On his deathbed, he urged me to move away from nuclear physics, a moment that reshaped my journey,” she recalled to Fortune. “I re-entered academia, working on a PhD in physical chemistry, joining Merck shortly after that.”
Ionescu’s been quietly scaling its ranks since. Promotion after promotion has taken her from a project manager to one of the company’s most senior leaders. Today, she’s a managing director of U.K. and Ireland at the $235 billion’s giant.
Looking back, while Gen Z grads snub their degrees as a waste of time and money, she tells Fortune that her Master’s in Nuclear Physics, PhD in Physical Chemistry, and an Executive MBA to add to the list of qualifications were her best investments yet.
The finances
Fortune: What’s been the best investment you’ve ever bought?
My MBA was definitely my best investment; it is something that no matter what happens in your personal or professional life, nobody can take away from you. Long after I finished the course, I am still relying on that experience and learning. It has fundamentally changed me as a person and clearly shaped my approach to leadership and personal development.
And the worst?
I don’t tend to look back and think of things in terms of bad investments. Everything I have ever invested in with a positive mindset has benefited me in one way or another!
What personal finance advice would you give your 20-year-old self?
Never focus on the money; focus on personal development and the contribution you bring to your work, your team and your career. In my experience, if you guide yourself in this way, the finances will follow. When you do get your rewards, though, always save rainy and sunny days.
What’s the one subscription you can’t live without?
It would have to be iCloud—I really need somewhere to store all my memories! Other than that, there are a couple of financial news outlets that I couldn’t possibly comment on here!
Where’s your go-to wristwatch from?
It’s a vintage Omega that belonged to my father-in-law. He passed away many years ago, but he would be very happy to know I am wearing it.
The necessities
How do you get your daily coffee fix?
I make my own coffee, white and without sugar. In the office, we have our coffee machine in the kitchen, but I prefer the one I have at home. I don’t often have breakfast, but when I do, it’s protein-based only.
“Never focus on the money; focus on personal development and the contribution you bring to your work, your team and your career.”
Doina Ionescu, general manager for healthcare, Merck
What about eating on the go?
My favourite place to get lunch is actually my office canteen; we have a wonderful chef who creates interesting and varied dishes each week! Our office canteen is also a fantastic place for me to catch up with different members of the team about everything outside of work, so I enjoy the social aspect. Other than that, I make my own lunch at home, and if I have a business meeting, I go to the Ivy Kensington, which is not far from me.
Where do you buy groceries?
Normally from Waitrose! It is convenient for me and has good choices.
Where do you shop for your work wardrobe?
I usually don’t; I haven’t bought clothes in ages. If I do ever need to get something nice and branded, however, I will go to Bicester Village to hunt a bargain. Over time in my career, I have gone from wearing business suits to dresses to silk shirts, but one thing that has definitely changed is that I have given up wearing heels.
The treats
How do you unwind from the top job?
I recently bought all the books written by the Bronte sisters to reread. They have a wonderful effect on me, taking me back to something of a timeless period. I also like to refresh my French, which can help me switch off and turn my mind away from the daily job. I’m a big fan of Duolingo because of its competitive element! During my last holiday, my daily objective was to be at the top of the Duolingo leaderboard.
What’s the best bonus treat you’ve bought yourself?
I usually put any bonuses away to save for something sensible, but if I had to pick the best purchase I have made previously, it would be a pair of Cartier earrings. They were a one-off treat for me, and I was drawn to the classic, clean look they had.
Take us on holiday with you, what’s next on your vacation list?
I have just been on holiday in France, where I have a flat, but for my next trip, although it’s a way away, it could be Thailand or Vietnam. I haven’t made my mind up! I also go to visit my mother’s countryside home in Romania each year; it’s the one place on earth where I regain my energy and ground myself. Life is very settled there, so I love it.
Fortune wants to hear from leaders on what their “Good Life” looks like. Get in touch: [email protected]
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