Good morning from the Financial Times.
Today is Friday, May 16, and this is your FT News briefing.
Japan has made it very clear it won't settle for a, meh, trade deal.
And Bill Ackman is trying to do his best Warren Buffett impression.
Berkshire Replicas either fail or come and go, and you just really have never actually seen anyone build the real advantages that Buffett's built.
Plus, we'll take a look at the first round of Polish elections coming up this weekend.
I'm Marc Flippino and here's the news you need to start your day.
Japan looks like it's gonna hold out on a trade deal with the US until it gets better terms, and in this case Tokyo is pushing to remove US President Donald Trump's 25 % tariffs on Japanese cars.
Prime Minister Shigaru Ishiba started out fast. Japan was the first country to get Washington to the negotiating table after so -called liberation day, but since then, Ishiba has come under a ton of political pressure to reject any deal that puts Japan's car sector at risk.
So the focus has shifted from a fast deal to a good deal.
And that political pressure is coming from the parliamentary elections that are set to happen before late July.
They're expected to be pretty difficult for Ishiba's party.
Japan's trade negotiators have already met with the Trump administration twice.
A third meeting is scheduled for later this month.
Legendary investor Warren Buffett is retiring from Berkshire Hathaway and Bill Ackman is setting out to build a rival.
The outspoken investor is now talking about a plan to transform a property developer into a sprawling conglomerate, a la Berkshire.
But Ackman's got some big hurdles to clear if he wants to get there.
Here to explain is Antoine Garra.
He's the FTZU private equity and deals editor.
Hey, Antoine. Hi, how are you?
Doing well. So tell me a little bit about what Ackman's idea to rival Berkshire would look like.
It's been a long time in the making, but what Buffett essentially did was transform Berkshire Hathaway, which was a textile manufacturer in Massachusetts in the 1960s into basically an investment company.
company. So you know he sort of slowly shuttered the textile business and then it became an investment conglomerate fueled by insurance.
And what Ackman's trying to do is pull off a similar transformation but with a real estate company that he's sort of helped to oversee for about 15 years called Howard Hughes.
Yeah, Howard Hughes, not an accident there like the Hollywood and aerospace mogul Howard Hughes.
Antoine, what is Ackman's plan to get Howard Hughes the company to rival Berkshire?
I mean that is a really lofty goal.
So what he's done was last year he raised a billion dollars against his management company Pershing Square Inc and he's using about 900 million of that money to buy additional Howard Hughes shares and essentially put 900 million dollars in Howard Hughes's bank and then And he's also agreed to this deal with Howard Hughes, where he and his investment team will now kind of direct their investments just like Warren Buffett and Charlie Munger and all their lieutenants did at Berkshire.
And their initial goal is to stand up an insurance company, which in the Berkshire mold would generate, you know, sort of excess cash that they can invest. And he's also said he wants to then go buy businesses outright and sort of create a diversified holding company where they could kick off profits over time.
I'm assuming that this doesn't come without challenges.
What are some of the problems that Ackman is going to face expanding Howard Hughes like this?
Howard Hughes currently has a high sort of cost of capital, which means that when it goes and acquires things, the hurdle for it to earn in excess of what it would cost to buy things is fairly high.
So they need that to go down over time to lower the kind of hurdle on sort of investment return.
And then the other point is that, you know, Ackman's got a somewhat mixed record on M &A driven investments.
And so he has done very well on things like restaurant brands, where he was acquiring a bunch of different sort of restaurant operating companies like Burger King and Tim Hortons.
That's worked out very well.
But then there were others where he was involved, like Valiant Pharmaceuticals, where the whole M &A strategy kind of didn't work out and he wound up losing a ton of money on those bets.
So we'll see that play out over time.
But so far, the reaction has been a bit muted.
There hasn't been this like, you know, here comes the second coming of Berkshire Hathaway.
So I think there's still a lot of proving he has to do.
Anton, I guess my last question is can anyone, not just Ackman, create a new Berkshire without the trust and the reputation that Buffett built over half a century?
Well I think that's a great point.
There's been many kind of Berkshire look -a -likes and copycats over the years and and you can kind of create structural things that resemble Berkshire.
But then building that equity with shareholders and with company sellers that is built over decades is really the hard thing that basically no one on wall street has ever been able to replicate.
Antoine Gara is the FT's US private equity and deals editor.
Thanks Antoine. Thank you.
EY is delaying the start date for new graduates for the third year in a row.
The big four company is dealing with what it calls uncertain and evolving market conditions.
Students who were supposed to be in work in the next few months now won't report for duty until at least March 2026.
Talk about a graduation gift. One recent graduate told the FT that they had their ceremony on Saturday, and then on Monday got an email about the postponement.
The reason for the delay?
The number of mergers and acquisitions are still in the dumps.
and fewer employees are leaving because of all the concerns about the economy.
EY and others usually bank on some level of turnover, and when they don't meet it, that puts pressure on profits.
People in Poland are heading to the ballot box this weekend.
It's the first round of voting in the country's presidential election.
And the race is shaping up to be a turning point, not just for Polish politics, but also for the war in Ukraine.
My colleague, Raphael Minder has been following the situation and he joins me now.
Hey, Raphael. Hey! Okay, Raphael, just lay out the dynamics of this race for me, which candidates should I know about?
Well, there are a dozen candidates but really the main one is the front runner, Raphael Charszkowski, the current mayor of Warsaw and the candidate of the Civic platform party of Prime Minister Donald Tusk.
He has been holding a relatively comfortable lead in all the opinion polls since his nomination in November, and it's currently about 10 percentage points above Carol Navrovsky, the candidate of the main opposition right -wing law and justice party, also known as PEACE.
However, the opinion polls also indicate that on Sunday none of these candidates will come close to 50 % and avoid a runoff.
So we will be back for the final outcome on June the first. Well, just back up a little bit and tell me about the political situation Poland has been in for the past couple of years.
You know, Donald Tusk came to power in 2023 as prime minister.
What path did that lead the country on?
Well, I think it's important to remember 2023, the Tusk victory is seen as almost like a miracle victory.
His coalition managed to unseat peace, a party that had basically got a full grip on the country's economy, the state media.
So the hopes were very high.
The issue for Tusk has been that he promised a lot in order to get his coalition and has delivered relatively little.
Why? There are different reasons, but certainly one of the main ones, if not the main one, is that he has had this very difficult cohabitation with President Duda, a peace nominee, who has used his veto powers to block large parts of Tusk's reform agenda.
Okay, so this presidential election sounds like it's extremely important for Tusk in order for him to make some changes.
Tell me more about the major issues at stake.
What's on the ballot?
I would say if we look at the policies, security is the main one.
Who is the candidate who can safeguard Poland from Russia, is basically what voters are trying to answer.
Poland was the main gateway for Ukrainian refugees back around the spring of 2022.
Poles were very proud of the solidarity showed that they put on.
But three years on, Ukrainians are seen in a very different light.
their economic competitors.
And then there are specifics, particularly relating to Poland's place in the EU, but also for women who helped bring in 2023 the turnout to record 74%.
This is primarily about abortion.
There is a question of why Tusk coalition has not fulfilled the pledges it made to liberalize access to abortion.
Okay, so these are some of the domestic issues, but What could be the implications of this election on Sunday for Europe?
Well I think the point is that Poland, thanks to the result of the 2023 parliamentary elections, sort of put itself as a beacon of hope for liberals in Europe.
And of course if Tusk gets another win in the presidential, and gets his candidate Tchaikovsky into the presidential palace.
This would confirm Poland as a sort of standout liberal country, certainly within the central and eastern European bloc.
Poland is the largest country in that region.
You know, Poland did change in 2023, and that change could now be confirmed if Tusk's party also wins the presidency.
trans - Dagger. Raphael is the TRN's central Europe correspondent.
Thank you. You can read more on all of these stories for free when you click the links in our show notes.
This has been your daily FT News Briefing.
Check back next week for the latest business news The FT News Briefing was produced this week by Sonia Hudson, Lulu Smith, Ethan Plotkin, Kasha Brusayan, and me, Mark Filippino. We help this week from Simon Panahi.
Sam Jiavenko, Michael Lello, Peter Barber, and Gavin Colman.
Our acting co -head of audio is Topher Forhes, and our theme song is by Metaphor Music.
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