One scoop to start: Galois Capital, a hedge fund whose assets were trapped on the collapsed cryptocurrency exchange FTX, is closing down and returning its remaining money to investors.

And one deep dive: this online-only FT special report delves into the world of impact investing, with top pieces on faith and finance, how to pitch your social enterprise to investors, pharma funds, and place-based impact investing for the UK’s left-behind towns.

Welcome to FT Asset Management, our weekly newsletter on the movers and shakers behind a multitrillion-dollar global industry. This article is an on-site version of the newsletter. Sign up here to get it sent straight to your inbox every Monday.

Does the format, content and tone work for you? Let me know: [email protected]

Hindenburg vs Adani

When US short seller Nathan Anderson decided to take on Indian conglomerate Adani Group, he faced the ultimate challenge for someone in his line of business: India’s anti-short selling rules.

The founder of New York-based Hindenburg Research accused the infrastructure group of fraud and stock price manipulation in a 100-page report published last month, write Ortenca Aliaj and Antoine Gara in New York.

Anderson has not detailed how he structured his financial bet — saying only that the firm had taken a short position in Adani “through US-traded bonds and non-Indian-traded derivative instruments”.

Despite Adani denying the allegations in a 400-page rebuttal, Hindenburg’s report has triggered a sell-off in the group’s listed entities, knocking more than $100bn off their combined market value. It is the reaction Hindenburg, which profits when the price of bonds and equities linked to a company go down, was hoping for. Yet how Anderson and his team structured their trade has been a puzzle to the market.

The Indian conglomerate founded by Gautam Adani, who until Hindenburg’s report was the world’s third-richest person, is the firm’s largest target among a small list of non-US companies it has bet against.

Anderson, who considers as his mentor Harry Markopolos, the investigator known for sounding the alarm on Bernard Madoff’s Ponzi scheme, founded the business six years ago. In this deep dive, my colleagues explore how he found a way to short Adani, likely using single stock futures and the help of western banks in Singapore.

Meanwhile, George Soros has predicted India’s prime minister Narendra Modi will be weakened by the woes of business tycoon Adani, his close ally, “opening the door” to a democratic revival in the country.

BlackRock’s bonds bonanza

Enthusiasm for bonds is proving to be a bonanza for BlackRock’s fixed-income exchange traded funds, which have attracted more investor cash since US interest rates started rising than all their competitors combined.

BlackRock, the world’s largest money manager, is capitalising on growing interest among wealth managers and other asset managers in using ETFs instead of or in addition to buying bonds directly, writes Brooke Masters in New York. From March last year to the end of January, there were $146bn net flows into BlackRock’s fixed-income ETFs, while competitors took in $134bn.

Bond ETFs have been a bright spot for BlackRock after a year when its overall assets under management shrank by nearly 15 per cent to $8.6tn. Chief executive Larry Fink considers them a main driver of revenue growth. BlackRock predicts that bond ETF assets industry-wide will more than double from $1.8tn now to $5tn in 2030.

The increases are being driven by regulatory changes, investors’ growing comfort with the way they perform in volatile markets and creative uses of them by wealth managers and even other bond funds.

“There have been significant changes about the way people think about fixed-income ETFs in the past year,” says Deborah Fuhr, founder of the ETFGI consultancy. “We have seen large funds and asset managers put their portfolios in ETFs . . . rather than buying bonds and trying to manage them themselves.”

BlackRock got into fixed-income ETFs early and has long been the largest player: it has more than 40 per cent of global assets under management for the category. But as competition for broad-based and retail-focused ETFs grew, it expanded into new areas. The number of fixed-income ETFs it offers nearly doubled from 243 to 462 in the past five years.

“We’re finding and expanding into all parts of the bond market in multiple different slices . . . Any part of the bond market that can be accessed through an ETF, we’re capturing that,” says Salim Ramji, BlackRock’s global head of ETF and index investments.

In the spotlight: Tikehau Capital’s Mathieu Chabran and Antoine Flamarion

Mathieu Chabran, left, and Antoine Flamarion, co-founders of Tikehau, have ambitions to build a ‘Blackstone of Europe’ © Roberto Frankenberg

France’s Tikehau Capital has emerged as one of the fastest-growing asset managers in recent years. Now the €38bn alternatives group has set the stage for the next chapter of its international expansion by securing backing from two of the secretive founding families of beer giant Anheuser-Busch InBev.

The Van Damme and Van der Straten Ponthoz families are investing €400mn in equity in Tikehau Capital Advisors, the main shareholder in a publicly traded business spanning private debt, real assets, private equity and capital markets strategies.

Tikehau’s two founders, Mathieu Chabran and Antoine Flamarion, formerly of Merrill Lynch and Goldman Sachs, were aged only 28 and 31 when they set it up in 2004, with only €4mn in assets and vocal ambitions to build a “Blackstone of Europe”.

“We built this firm by partnering with institutions and families,” says Flamarion. “Our goal is to build a global champion in the alternative investment space.” 

Chart of the week

Line chart of DXY US dollar currency index showing the dollar's February revival

The dollar has rebounded from a 10-month low as investors push up their forecasts for US interest rates after signs of stubborn inflation and unexpectedly strong economic activity.

The world’s most important reserve currency rose to a 20-year high in September but tumbled 11.2 per cent over the following four months as US inflation declined from a multi-decade peak, allowing the Federal Reserve to slow the pace at which it raised interest rates towards the end of 2022. Tamer rate rises and the prospect of steady or even falling rates in 2023 removed one of the currency’s key supports.

However, February has begun with a flurry of economic data suggesting the world’s biggest economy remains in rude health, pushing the dollar back up by 3 per cent against a basket of six other leading currencies since the start of the month and erasing January’s decline.

The US last month added more than half a million jobs, almost triple the consensus forecast, while inflation fell to 6.4 per cent, a smaller decrease than expected.

“The inflation report has ruined markets’ nice little disinflationary plan,” said Florian Ielpo, multi-asset portfolio manager at Lombard Odier, with central banks likely to maintain their upward pressure on rates as a result.

Five unmissable stories this week

Goldman Sachs chief executive David Solomon is preparing to reassure investors that he can get staff back on side and that a painful fall in profits in the fourth quarter does not mean Goldman is moving in the wrong direction.

Singapore’s sovereign wealth fund GIC, one of the world’s largest investors in private equity funds, has put the brakes on private investments in China as it steps up scrutiny of risks in the world’s second-biggest economy.

Markets editor Katie Martin explores the contrarian dilemmas in markets for 2023. Investors who turned bullish as recession fears mounted have done well but the outlook is now more cloudy.

Jupiter’s chief executive Matthew Beesley is banking on growth to revive the £47.4bn fund manager’s fortunes. He wants to expand overseas and widen product range in bid to stem four consecutive years of net outflows

Hedge funds including Third Point, Makuria Investment Management and Odey Asset Management have reaped a windfall from coal’s renaissance as they embrace a fossil fuel that many investors have shunned in the battle against climate change.

And finally

‘View of Delft’ by Johannes Vermeer (1660-61) © Mauritshuis

With Johannes Vermeer, “something well worn in Dutch art (like an old shoe) has become something never seen before (like a glass slipper),” said Walter Liedtke, who was curator of the Metropolitan Museum’s show of the artist in 2001. Now the Rijksmuseum in Amsterdam has assembled more Vermeers than have ever been shown together. “The effect is momentous, almost dizzying,” writes our chief art critic Jackie Wullschläger.

FT Live event: Future of Asset Management Asia

The Future of Asset Management Asia is taking place for the first time in-person on 11 May at the Westin Singapore and will bring together Asia’s leading asset managers, service providers and regulators, including Asian Development Bank, The Stock Exchange of Thailand (SET), Allianz Global Investors and many more. For a limited time, save up to 20% off on your in-person or digital pass and uncover the industry’s top trends and opportunities. Register now

Thanks for reading. If you have friends or colleagues who might enjoy this newsletter, please forward it to them. Sign up here

We would love to hear your feedback and comments about this newsletter. Email me at [email protected]

Due Diligence — Top stories from the world of corporate finance. Sign up here

The Week Ahead — Start every week with a preview of what’s on the agenda. Sign up here