Fisker’s ride from Apollo deal to bankruptcy

One not-so-golden float to start: Italian luxury sports brand Golden Goose, famous for its distressed-looking trainers popular among celebrities such as Taylor Swift, has postponed plans for an imminent listing in Milan that would have been among the highest-profile initial public offerings in Europe this year.

And some good tax news for private equity: The UK’s private equity industry has welcomed as “encouraging” shadow chancellor Rachel Reeves’s suggestion that buyout executives who invest in their funds would continue to enjoy favourable tax treatment.

In today’s newsletter:

• Fisker goes from Spac to bankruptcy

• Nato’s new tech defence start-up

Fisker’s wild ride from Apollo Spac to bankruptcy

Right around now, electric-car maker Fisker had expected to notch more than $10bn in revenue. Instead, late on Monday, it filed for bankruptcy after a funding deal with a big carmaker fell through.

It’s the latest in a string of EV producers to land in bankruptcy recently: the UK arm of electric van group Arrival went into administration in February, while US pick-up truckmaker Lordstown Motors filed for Chapter 11 bankruptcy protection last year.

There’s an eerie sense of déjà vu here. The firm’s founder, Henrik Fisker, started another EV company called Fisker Automotive more than a decade ago that sold about 2,000 cars before mass recalls sent it into bankruptcy.

Fisker’s second attempt didn’t go much better. Not only did the company horribly miss sales targets across Europe and the US with its Ocean SUV, but its cars are also under investigation by the US auto safety regulator after customers complained of unexpected brake failures.

Signs of the company’s troubles were apparent even as it was preparing to go public in a tie-up with a blank-cheque company sponsored by Apollo Global back in 2020.

In an investor presentation a few months before the company made its public market debut, slides showed Fisker was nearly out of cash, with just $1.9mn left on its balance sheet. Apollo’s vehicle arrived just in time — granting the private equity group a windfall off the deal.

Apollo’s investors initially owned just over 22mn shares in the company, but sold all of them by the end of the second quarter in 2021. With a lock-up period expiring at $12 a share, the buyout group made at least $267mn from selling the shares.

At its peak, Fisker had a market capitalisation of nearly $8bn. Fisker and his wife, who is the company’s chief financial officer and chief operating officer, bought a mansion in the Hollywood Hills. (It’s reportedly back on the market.)

Now, some big companies are caught up in Fisker’s failure, with Google, Adobe and Salesforce all creditors.

The economic backdrop to all this hasn’t worked in Fisker’s favour. A glut of EV makers increased production just when interest rates surged.

On top of that, “Tesla and other big manufacturers have either big head starts or huge advantages in a technically complex product,” Lex writes. More start-up bankruptcies could follow.

Nato plays catch-up with €1bn defence tech start-up fund

Just a few years ago, most tech investors didn’t want to go anywhere near defence start-ups. Google employees were walking out in protest at its use of artificial intelligence in the military.

The process of winning big government defence contracts was the domain of the “primes” — big, established contractors that knew how to play the procurement game.

No venture capitalist was going to distract themselves from the important business of chasing the latest food delivery app to take a risk on a newbie making drones or putting AI on the battlefield.

But now, that’s changing quickly. In the US, Anduril Industries has proven you can create a multibillion-dollar military contractor from scratch in just a few years. And in Europe, the war in Ukraine has made many tech workers rethink their stance on using AI in defence.

Enter Nato’s €1bn start-up fund. Essentially a fund of sovereign wealth funds, the Nato Innovation Fund began deploying capital at the start of this year and has already backed a handful of companies in areas such as robotics, AI and even space-based manufacturing.

“The mission of the fund is to invest in disruptive technology that enhances the safety of the alliance’s citizens and Nato’s technological edge,” Andrea Traversone, the Nato fund’s managing partner, told the FT’s Tim Bradshaw and Sylvia Pfeifer.

He said that while the US had a head start in defence tech, Europe was “catching up very fast”. (The US is not among the 24 countries contributing to the fund.)

“There are many candidates to become the equivalent of Anduril in the regions we cover,” he said.

Job moves

• UBS has hired Carlos Salcedo as head of capital markets financing sales for the Americas. He previously worked for Barclays. 

• Coatue has hired Spencer Peterson as a general partner. He was previously a partner at Bedrock.

• CoStar Group has hired Christian Lown as chief financial officer. He was most recently at Freddie Mac, and before that worked at Navient Corp and Morgan Stanley.

Smart reads

French fear Corporate leaders in France are starting to court Marine Le Pen after being alarmed by the leftwing alliance’s tax agenda, the FT reports.

Secret business While in the midst of a turnaround plan, Citigroup’s mysterious business unit makes the bank plenty of money, The Wall Street Journal writes. But what does it do?

Donations scheme A ProPublica investigation found that a group of connected political non-profits appears to be funnelling more than 90 per cent of donations back to fundraisers.

News round-up

TikTok complaint referred to US justice department (FT)

Swiss regulator finds HSBC violated money laundering rules (FT)

Hargreaves Lansdown backs £5.4bn private equity takeover (FT)

Jeff Bezos supports embattled CEO of Washington Post in memo to staff (FT)

Serco settles landmark shareholder lawsuit (FT)

US judge ends Exxon lawsuit against shareholder over climate activism (FT)