—— US Private Sector Adds 140K Jobs; Fidelity Cuts 1,000 Staff to Control Costs; AMD Blocked from Exporting Chips to China; KKR Acquires Renewable Energy Firm; Deutsche Bank Bankers’ Bonuses Cut by 10%; Swiss Dermatology Giant Plans IPO; BGO to Bulk Buy $500M in Homes
1. US Private Sector Adds 140K Jobs
ADP Research Institute reported today that U.S. private sector employers added 140,000 jobs in February, continuing January’s gain of 111,000, but slightly below economists’ median forecast of 150,000.
Wage growth for job switchers rose for the first time since November 2022, while for workers staying in their current positions, pay growth dropped to its lowest level since August 2021.
ADP Chief Economist Nela Richardson said that job growth remains strong; while wage increases have slowed, they still outpace inflation.
Most industries experienced job gains, with the largest increases seen in leisure and hospitality, construction, trade, and transportation.
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2. Fidelity Cuts 1,000 Staff to Control Costs
A spokesperson for Fidelity International said via email that due to challenging economic conditions, the company will lay off approximately 9% of its staff—about 1,000 employees—across all departments to manage costs.
Over the past two years, the asset management industry has faced multiple challenges, including the dual stock and bond market declines in 2022, as well as persistently high interest rates in recent years.
In November, Anne Richards stepped down as CEO, and Keith Metters, head of Fidelity’s international division, took over just a few days ago.
Asset management giants such as BlackRock and T. Rowe Price have also already completed layoffs.
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3. AMD Blocked from Exporting Chips to China
The U.S. Commerce Department stated that chipmaker AMD’s AI chips tailored for the Chinese market are too powerful, and the company must obtain a license from the Department’s Bureau of Industry and Security (BIS) in order to continue sales.
Following the news, AMD’s stock opened down 2.2%. Neither AMD nor the BIS has commented.
Rival Nvidia has also continued to weaken its AI chips intended for China to obtain regulatory approval.
The U.S. has been seeking to limit China’s access to advanced semiconductors and its ability to develop AI models.
Chinese tech firms such as Tencent and Baidu have said they have stockpiled enough Nvidia chips to continue building out their AI models for the next two years.
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4. KKR Acquires Renewable Energy Firm
Sources revealed that buyout giant KKR & Co. plans to acquire renewable energy firm Encavis AG for $2.2 billion, with a deal potentially being reached within days.
Encavis’ share price has dropped by more than half since its peak in January 2021. Higher interest rates have caused a broad sell-off in the renewables sector, as such projects require heavy capital and loans have become more expensive.
Encavis owns over 80 wind farms and 200 solar parks across Europe, supplying clean energy to more than 2.2 million households.
In 2023, renewables accounted for over half of Germany’s total energy output for the first time.
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5. Deutsche Bank Bankers’ Bonuses Cut by 10%
Sources say that Deutsche Bank cut its investment banking bonus pool by more than 10% due to poor performance last year. Average bonuses across all divisions were cut by 5%.
M&A advisory is a key profit engine for Deutsche Bank, but activity has plummeted amid higher interest rates. Most Wall Street firms have held or cut existing bonus levels.
In 2023, Deutsche Bank’s investment banking revenue fell 9%, with advisory and trading revenue down 38% and 11%, respectively.
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6. Swiss Dermatology Giant Plans IPO
Galderma, one of the world’s largest dermatology companies, plans to raise $2.3 billion through an IPO on the Swiss stock exchange.
The company sells acne treatments and anti-wrinkle injections, and may complete its IPO as early as this month, with a possible valuation of $20 billion. Galderma plans to use the proceeds to repay existing debt.
The company was originally a joint venture between Nestlé and L’Oréal and was acquired by Swiss private equity firm EQT in 2019 for $10 billion.
CEO Flemming Ornskov said the company’s performance and the sector’s trajectory are healthy, making this a good time to go public.
Galderma is best known for producing Cetaphil cleansers and prescription acne medications.
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7. BGO to Bulk Buy $500M in Homes
Real estate manager BGO plans to partner with 1Sharpe Capital to invest $500 million to bulk-purchase single-family rental homes directly from builders. The two firms believe bulk purchases are easier to execute and manage than multiple smaller acquisitions.
Given high interest rates and sluggish home sales, builders are motivated to sell in bulk to offload inventory.
Recently, BGO and 1Sharpe completed the purchase of 64 single-family homes in the Phoenix metro area.
Pretium, the largest single-family rental owner in the U.S., recently raised nearly $1 billion to acquire more rental properties.
Source：Bloomberg – Real Estate Manager Plans $500 Million Push to Buy Rental Houses From Builders
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This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.