Private equity deals where the seller is also the buyer

This episode of the FT News Briefing explores two major developments in global finance and technology. First, China's unprecedented move to block Meta's $2 billion acquisition of the AI app Manus, citing national security concerns despite the company's relocation to Singapore. The decision underscores Beijing's growing control over AI talent and technology, particularly in response to U.S. dominance in AI innovation. The intervention signals a new phase in the geopolitical AI race, where national sovereignty is increasingly prioritized over cross-border investment. Second, the podcast examines the rising use of 'continuation vehicles' in private equity—where firms sell companies back to themselves through new funds. This practice, driven by high interest rates and declining exit valuations, raises serious concerns about conflicts of interest, especially when the same firm manages both the selling and buying sides. Institutional investors are warning that this structure could undermine transparency and fairness in fund returns. The episode highlights how financial innovation is being reshaped by market pressures and geopolitical tensions. Key takeaways include: 1) Governments are increasingly intervening in tech deals for national security reasons, especially in AI; 2) Continuation vehicles in private equity are a growing workaround for liquidity challenges but risk ethical and governance issues; 3) The AI race is no longer just about technology—it's a geopolitical battleground; 4) Private equity firms are under pressure to generate returns amid high interest rates and inflated past valuations; 5) Investors must scrutinize conflicts of interest when private equity managers operate on both sides of a transaction. The overall tone is cautiously critical, highlighting systemic risks in both global tech policy and private capital markets.