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LOUISA CLARENCE-SMITH
It takes a foreign investor to cheer up
the doom-laden Americans
The clarion call from Wall Street to the White House is for more certainty
around policy
Louisa Clarence-Smith Tuesday May 06 2025, 10.32pm BST, The Times
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A
t the junk bond king Michael Milken’s annual jamboree in Beverly
Hills this week, the mood among billionaires and chief executives is
sombre.
In ballrooms at the Beverly Hilton, asset managers, bankers and investors
listening to doyens of Wall Street give their take on the investment climate
heard Henry Kravis, co-founder of KKR, warn how the uncertainty caused by
trade policy was causing investors to sit on their hands.
In a conference interview, Marc Rowan, chief executive of Apollo Global
Management, said: “We have done damage to the US brand — the brand for
stability, predictability, regularity. I see us moving from what was hyper-
exceptionalism to merely exceptional.”
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The most optimistic chief executives are hoping that US leadership in
technological advances around AI and quantum computing will overcome tari
uncertainty when it comes to the prospects for US exceptionalism.
Gary Cohn, vice-chairman of IBM, told the conference: “We’re thinking about the
next 90 days, because we have to. But honestly, we’re making investments for a
generational fight.” He said just as AI investments took several years to pay o ,
the huge investments IBM and other US firms are making in quantum will “pay
results, I’ll say, five years from now”.
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However, Peter Orszag, chief executive of Lazard, said that while US leadership
in technology had driven productivity gains relative to Europe, there was a risk
that America could “disrupt the applecart” with President Trump’s cuts to
university research funding.
“I completely understand and empathise with the perspective that our leading
universities went far o kilter in how they handled the aftermath of October 7 in
particular,” he said. “But I think slashing the NIH [National Institutes of Health]
budget, slashing funding to the leading universities of the United States, risks
exactly what we’re already seeing — which is Europeans and others are saying,
‘Come here, we will invest in science’. We don’t want that.”
Chief executives complained of huge ongoing uncertainty around regulation.
It remains unclear how Trump will approach the dominance of Silicon Valley’s
tech giants.
Ruth Porat, president and chief investment o cer at Alphabet and Google, said
the company would not be able to follow through with the tens of billions of
dollars it has committed to infrastructure and research and development in
investment in the US if the Department for Justice’s recommendation to break
up part of its business to boost competition is followed.
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Those attending private soirées in hotel suites, where the real action happens,
have reported excessive pessimism. It took a foreign investor at one event to tell
the Americans they were being overly negative about US prospects, one guest
told me.
Waleed Al Mokarrab Al Muhairi, deputy group chief executive of Mubadala
Investment Company, the Abu Dhabi sovereign wealth fund, said: “We haven’t
stopped deploying capital, because at the end of the day, we still believe that the
US is still the best risk-reward, globally speaking.” While there is “a little bit
more friction in terms of doing business” in the US, he believes it will be “a short
term phenomenon.”
Bankers at the conference are trying to stay optimistic about deal activity
picking up later in the year. One pointed out that April’s US markets volatility
was nowhere near a crisis. “Throughout April, whether it was the sell-o part of
it, the rally part of it, things like portfolio trading, the ETF market, all these
things that have come about over the years, all in my mind functioned as well as
you would expect,” he said.
The clarion call from Wall Street to the White House is for more certainty
around policy, so businesses know what they are working with.
Scott Bessent, US Treasury secretary, told the conference that the US would
remain the world’s premier destination for global capital. “We have the world’s
reserve currency and the deepest, most liquid capital market and the strongest
property rights.”
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Business leaders were relieved to hear a White House commitment to the US
dollar’s reserve currency status, which has been questioned in recent weeks.
However, the really big question hanging over the conference is, what will be the
magnitude of the tari s?
Jane Fraser, chief executive of Citigroup, said most clients would be able to
accept 10 per cent tari s. But 25 per cent? “Not so much, and not higher than
that. And that’s going to capitalise a very di erent set of dynamics.”
Louisa Clarence-Smith is US business editor
US
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Sort by Recommended
J J Da Vall
7 M AY, 2 0 25
American: "I see us moving from what was hyper-exceptionalism to merely
exceptional.”
Rest of the World: lol
Reply · Recommend (2) · Share
W William Croom-Johnson
7 M AY, 2 0 25
If you can no longer rely on the US to behave reasonably, what chance of being able to
rely on US AI?
Reply · Recommended (0) · Share
G Gregory J Gardner
7 M AY, 2 0 25
“A guest tells me a foreign investor says” is now a headline. Now that’s real reporting !!!
Reply · Recommended (0) · Share
J Jeremy Draper
7 M AY, 2 0 25
its apparent thast anyone who is having their names associated with a quote is being
very careful to avoid being "re educated" a year from now in a labour camp.
Reply · Recommended (0) · Share
E Eamonn MacLochlainn
7 M AY, 2 0 25
A bloviating eegit is behind the wheel of the US economy. What could possibly go
wrong?
Reply · Recommended (0) · Share
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