One scoop to start: US asset manager Oaktree Capital is preparing an offer for Chelsea Football Club as the race to buy one of Europe’s biggest teams hots up after Roman Abramovich’s two-decades-long ownership nears an end.

chelsea FC sign on kiosk
The sale of Chelsea is a rare chance for investors to buy one of the big six clubs in the English Premier League, the richest domestic football competition in Europe © Neil Hall/EPA-EFE/Shutterstock

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The lucrative business of lobbying for Russian clients

We’ve written before about the “revolving door” between the highest-ranking policy jobs and the world’s top banks, corporate law firms, auditors and advisers such as Teneo and McKinsey.

But while many swing — sometimes too quickly between the public and private sectors, a different crop of Washington power brokers have made their fortunes floating seamlessly between both worlds.

We’re talking about lobbyists.

Two firms in particular — Mercury and BGR — have done lucrative work for Russian clients over the past several years, according to an analysis of OpenSecrets data by our FT colleagues Kiran Stacey and Caitlin Gilbert.

Mercury partner Bryan Lanza, a one-time adviser to former president Donald Trump, has made $2.3mn since 2014 by representing Russia’s Sovcombank and EN+. The latter was founded by Oleg Deripaska who has been under US sanctions since 2018 and was recently sanctioned by the UK.

Vladimir Putin with tycoon Oleg Deripaska in Moscow in March 2013
Vladimir Putin, left, with tycoon Oleg Deripaska in Moscow in March 2013

David Vitter, a Mercury partner and former Republican senator, was writing letters to lawmakers as recently as last month urging them not to impose sanctions on Sovcombank.

Meanwhile, DC-based BGR has lobbied on behalf of the Nord Stream 2 pipeline and Russian state-backed miner Uranium One.

Lawyer Adam Waldman, who represented actor Johnny Depp in his high-profile libel case, has worked directly for Deripaska and took on a commission in 2010 directly from Sergei Lavrov, Russia’s foreign minister, to lobby the US to grant Deripaska a visa.

NordStream 2 pipeline
BGR and Roberti Global have both cut ties with the Gazprom-owned Nord Stream 2 pipeline © REUTERS

As the scrutiny ramps up on foreign lobbyists, a similar reckoning that has forced other professional services groups to take action as a result of Russia’s invasion of Ukraine is gathering steam.

Both Mercury and BGR have cancelled the contracts with Russian entities.

Vin Roberti, who runs public policy firm Roberti Global, also cut ties with Nord Stream 2 last month.

Russian oligarchs have often turned to powerful litigators to protect their interests, including in the UK where strict libel laws have made it easier to fight unflattering press. But some of London’s top law firms are walking away. Now that lobbyists are ditching them too, they may soon be running out of representatives.

A European private equity heavyweight looks to Asia

It’s not an obvious moment for a European company to ramp up its exposure to Asia, and to a Hong Kong-based business in particular.

Unprecedented Covid-19 outbreaks are rippling through Hong Kong and mainland China. Tensions between Beijing and the US are escalating amid the Ukraine war. And major banks such as JPMorgan Chase and Bank of America are relocating executives from Hong Kong.

None of this has deterred EQT. The Stockholm-based buyouts group plans to acquire Baring Private Equity Asia for €6.8bn, rolling it together with its own Asian business to form a new unit led by BPEA’s chief executive Jean Eric Salata.

EQT logo on a phone
The Swedish buyout group is paying €6.8bn in cash and stock for Baring Private Equity Asia © FT Montage/Dreamstime/Bloomberg

EQT’s shares are richly valued compared to its global listed private equity peers partly because it has adopted a model that gives all management fees to shareholders and 65 per cent of performance fees to insiders. Shareholders prize the steady, recurring management fees, even though unpredictable performance fees can be far more lucrative.

That high valuation has given EQT a valuable currency for deals such as this one, most of which will be funded with €5.3bn of stock.

Key to understanding the move: the deal will add €17.7bn to EQT’s assets under management, which stood at €73.4bn in January.

For listed private equity groups, AUM is king, because it’s what determines those highly prized management fees.

It will also be a big step towards EQT chief executive Christian Sinding’s stated ambition of becoming “one of the global players” alongside the likes of US rivals Blackstone and KKR.

One thing worth observing is the valuation of BPEA. It’s a hefty 32 times the company’s 2021 earnings, well above the 23 times earnings that EQT paid for real estate manager Exeter early last year, Lex points out.

Sinding describes it as a multiple of its forecast 2023 earnings “at the lower end of the mid-teens”. Private equity is nothing if not creative at presenting numbers.

Adler Group: A spot of due diligence

Here at DD we take a keen interest in, well, due diligence.

Yet in all our years of digging into complicated transactions and corporate structures, we can’t remember the last time that some of the players involved felt the need to clarify proactively that their deals were “completely in line with the laws” and “nothing illegal”.

These are just two of the intriguing responses the FT’s Cynthia O’Murchu and DD’s Rob Smith received while digging into a web of transactions involving shares in Adler Group, the German property company. Its own new chair recently acknowledged it has been drawing unflattering comparisons to Wirecard.

Cevdet Caner pictured in Mayfair, London in 2009
Cevdet Caner pictured in Mayfair, London in 2009 © Chris Ratcliffe/Bloomberg

For DD readers who haven’t followed the ins and outs of Germany’s latest corporate governance scandal, we recommend reading the FT’s October interview with Cevdet Caner, the colourful Austrian property magnate at the centre of the storm of controversy — who also does a pretty good Dr Evil impression.

The fiasco is far from just an entertaining sideshow, however. The tussle over Adler is reshaping the landscape of Germany’s real estate market, where the twin forces of falling interest rates and rising property prices have propelled the value of listed landlords higher and higher over the past decade.

Line chart of German group's shares have struggled after allegations from short sellers (€) showing Adler's awful year

Last month, German real estate giant Vonovia became Adler’s largest shareholder overnight after seizing a 20.5 per cent stake underpinning a margin loan.

The reputations of some of the biggest banks in the world are also on the line. None other than JPMorgan became Adler’s bank of choice for billions of euros worth of debt and equity transactions in recent years.

While the US investment bank bagged lucrative underwriting fees in the process, we just hope that Jamie Dimon’s bankers did as thorough due diligence as Rob and Cynthia.

Job moves

Howard Schultz is returning to the helm of Starbucks on an interim basis after chief executive Kevin Johnson announced that he would retire next month.

Catherine Lewis La Torre, the interim head of the British Business Bank will not apply for the permanent role.

Chano Fernandez, Co-CEO of Workday, has joined KKR as a senior adviser.

Law firm Jones Day has hired former IBM chief trust and compliance officer Paloma Valor as ‘of counsel’ in its global disputes practice, based in Madrid.

Linklaters has hired three partners from Vinson & Elkins for its leveraged finance practice in London: Noel Hughes, Giacomo Reali and Christianne Williams.

AT&T has appointed seven directors to the board of Warner Bros Discovery as it prepares to spin off WarnerMedia and combine it with Discovery, including former PwC chair Samuel Di Piazza Jr as chair.

Smart reads

Oligarchs of New York Russia’s richest man, Vladimir Potanin, has long run in Manhattan’s most powerful circles. Even as he and his peers are ostracised from the city’s elite institutions, their financial contributions to the city remain deeply entrenched, Bloomberg reports.

Spacs on sale As blank-cheque deals fall from favour, dealmakers are selling stakes in the ventures at huge discounts, according to a Reuters analysis, and are even offering bonus stock in hopes of minimising redemptions.

Older and wiser London’s law firms were notorious for pushing out partners in their mid 50s to make way for new blood. A fierce talent war and higher pay have led more high performers to stay on long past retirement age, the FT reports.

News round-up

Lloyd’s of London issues largest fine in its history after ‘boys’ night out’ bullying (FT)

Chicago Cubs owners and Ken Griffin join forces in bid to buy Chelsea (The Guardian)

NortonLifeLock’s $8bn Avast deal hits snag as UK regulator raises concerns (FT + Lex)

Default looms as Russia hits deadline for dollar bond payments (FT)

Sycamore and Hudson’s Bay prepare Kohl’s bids (Wall Street Journal)

Nissan’s former legal chief faces appeal against Tokyo acquittal (FT)

Theranos executive Sunny Balwani’s criminal fraud trial delayed amid Covid-19 exposure (Wall Street Journal)

Restaurant and leisure groups warn Ukraine war will push costs higher (FT)

Western oilfield services companies stay the course in Russia (FT)

Nikko scandal puts Japan’s financial regulator to the test (FT Opinion)

Due Diligence is written by Arash Massoudi, Kaye Wiggins and Robert Smith in London, Javier Espinoza in Brussels, James Fontanella-Khan, Ortenca Aliaj, Sujeet Indap, Eric Platt, Mark Vandevelde, Francesca Friday and Antoine Gara in New York and Miles Kruppa in San Francisco. Please send feedback to

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