DD sits down with Egypt’s richest man

One thing to start: Warren Buffett’s Berkshire Hathaway sold 10mn shares of Apple in the final three months of 2023, cutting into a position that the so-called Oracle of Omaha has described as one of the “four giants” that account for the vast majority of the conglomerate’s overall value.

In today’s newsletter:

• Egypt’s richest man talks to DD

• A pensions chief says private equity needs to share the wealth

• Lyft’s wild ride

An Egyptian billionaire speaks about his empire

Egypt’s richest man Nassef Sawiris grants few interviews.

So there was a lot to discuss when the 63-year-old invited DD into his lavish offices overlooking London’s Berkeley Square last month. Our conversation delved into everything from his ownership of English football club Aston Villa to the $7bn of asset sales he has just cut at his chemicals group OCI.

The billionaire executive, the youngest of three brothers born into a prominent Egyptian construction family, has had a fascinating career that has put him inside boardrooms ranging from Adidas to the cement giant Lafarge.

He is now at another turning point, he told DD’s Arash Massoudi and Ivan Levingston.

OCI, the Dutch-listed chemical and fertiliser group, forms the bulk of Sawiris’ $8bn fortune.

After coming under pressure last year from activist investor Jeff Ubben, OCI embarked on a strategic review that has included two asset sales each worth $3.6bn.

His message is that he is not done yet.

“We’re evaluating what we want to do, not just with the money [from the asset sales] but as a team,” he said. “We’re quite open-minded.”

Sawiris’s father Onsi started a construction business in Egypt in the 1950s and built it over decades into a large multinational corporation now called Orascom Construction.

As the business grew, the family sought ways to diversify its activities, entering the cement industry and expanding operations from Egypt into other emerging markets.

That process has led Sawiris to establish his own family office NNS — recently relocated to Abu Dhabi — as a hub for his investments, which also include a stake in the café chain Joe & The Juice.

It may be his ownership of the UK’s Aston Villa football club that is his highest profile bet. He took over the team in 2018 alongside US billionaire Wes Edens, co-founder of Fortress Investment Group.

While the investment paid off soon thereafter when Aston Villa was elevated to the Premier League, Sawiris maintains that sports for him is not about the money.

“Anybody who does football and says this is a pure investment, in 95 per cent of the case he’s a liar,” Sawiris said. “It’s a passion. It’s addictive. And it can ruin your weekend and go into the following week.”

Read on for the details of his latest sports deal, and his remarks on Kanye West, Adidas, Abu Dhabi and his attitude towards business.

Calstrs to PE: Share the wealth

Private equity executives have made a killing managing money for big investors such as US public pension funds. Now they should start sharing some of that wealth, according to Christopher Ailman, the outgoing chief investment officer of $326bn pension giant Calstrs.

Read his interview with the FT’s Josephine Cumbo.

The irony shouldn’t be lost on anyone. The hefty management fees Calstrs, which manages money for teachers in California, has paid big investment groups such as Blackstone, have contributed significantly to the fortunes of buyout kingpins including Stephen Schwarzman.

In fact, even as the buyout industry gummed up in a higher interest rate environment last year, the fees big private equity groups earned for managing broader assets grew, pushing many of their stocks to new records.

While the industry is still lucrative for many of its executives, Ailman’s comments reflect a growing trend: that private equity groups are giving rank-and-file workers at companies they own the ability to profit from their takeovers and sales.

This is a significant development as the industry wields ever growing influence over corporate America. Some 12mn people now work at buyout-backed companies, research from lobby group the American Investment Council shows.

Among the pioneers of this approach is KKR — the firm made famous with their swashbuckling, make-money-at-all-costs approach captured in the business classic Barbarians at the Gate. The group says billions of dollars in equity have been shared between more than 60,000 employees at its portfolio companies since 2011.

Last year, the firm committed to offering equity-sharing programmes to all employees in the takeover deals coming from its $19bn North American private equity fund and in all future funds in the region.

Other firms including Apollo and TPG have made similar commitments. But higher rates are making life difficult for some groups, so the spoils left to share may fall.

How Lyft had the ride of its Lyf

This week someone at Lyft had a blip with bps.

In a press release that went out shortly before the ride-hailing company’s results, Lyft reported it would improve adjusted earnings margins by 500 basis points compared with the previous year.

That’s equivalent to 5 per cent. A lot of people thought this was great and they piled into Lyft shares, sending them up more than 60 per cent. It added $3bn to the company’s market value and it looked like 2024 was going to be a smooth ride for the app.

But things took a turn a few minutes later when Lyft’s chief financial officer Erin Brewer said there had been a “clerical error”.

There was a stray zero in the press release, which we can only assume went through several rounds of proofreading, and the company meant to report a 50 basis point improvement. Lyft’s share price retreated, but opened trading up 15 per cent.

Chief executive David Risher on Wednesday conceded it was a “bad error” but said it was “one zero in a press release”.

Need we remind Risher that an extra zero can have big consequences. Remember the Citigroup banker who briefly caused a flash crash in European markets after he accidentally added an extra zero to a trade.

The market will usually crucify you for errors like these. But bar a few memes and jokes on X, things turned out pretty well for Lyft.

Its shares rose 35 per cent on Wednesday because, as Lex points out, even a 50 bps improvement is good.

Job moves

• Meta has added Broadcom chief Hock Tan and billionaire philanthropist and former Enron trader John Arnold to its board of directors. The additions come after former chief operating officer Sheryl Sandberg announced plans to depart the social media group’s board in May.

• NatWest is set to confirm interim boss Paul Thwaite as its permanent group chief executive. The appointment is subject to approval from the bank’s board, which is due to meet on Thursday, said people with direct knowledge of the plan.

• Clifford Chance has hired Blake Jones as a partner in its global financial markets team in London. He joins from Paul Hastings.

• Real estate group Hines has appointed ex-Carlyle partner Paul Ferraro as head of its global private wealth solutions strategy.

• Fenchurch Advisory has added a pair of veteran financial institutions bankers: Paul Miller as a senior managing director and Eric Richard as a vice-chair. Miller joins from Morgan Stanley, while Richard was previously at RBC.

Smart reads

MBS’s Hollywood BFF Vanity Fair chronicles how an investment by Saudi Arabia into the production of Jeanne du Barry turned into a blossoming friendship between its star Johnny Depp and Crown Prince Mohammed bin Salman.

The last wildcatter Autry Stephens is about to become one of the richest men in the world after selling his oil drilling company in a $26bn deal. Despite his massive wealth, he has some regrets, the Wall Street Journal reports.

Musk vs Delaware The small US state of Delaware has long been the refuge of large corporations seeking predictable courts. DD’s Sujeet Indap reports in the Behind the Money podcast that Elon Musk’s call for a corporate divorce from Delaware will face a stiff test.

News round-up

Jeff Bezos sold $4bn in Amazon stock over the past week (FT)

Brussels open to telecoms mergers to support investment (FT)

Standard Chartered needs drastic action, not diplomatic polish (FT)

Uber debuts $7bn share buyback as tech groups step up capital returns (FT) 

AI hype has echoes of the telecoms boom and bust (FT)

Why Jane Street wins and keeps winning over and over again (FT)