China’s Millionaire Hibernophiles

Plus: Elon Musk isn’t just launching Twitter wars ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

January 9, 2023

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TOGETHER WITH

Good morning.

January is for insurrections, apparently.

In what felt like a case of Southern Hemisphere déjà vu, supporters of former president Jair Bolsonaro stormed the Brazilian capital on Sunday, forcing their way into and trashing congress, the Supreme Court, and the presidential palace. The scenes from Brasília looked like a tropical version of the January 6, 2021 insurrection in Washington DC, with many of the protestors turned rioters walking hours to make their presence felt. Newly re-elected President Luiz Inácio Lula da Silva, who was 500 miles away visiting flood victims, placed the blame squarely on Bolsonaro, often dubbed Trump of the Tropics, who as it happens has been residing in Florida.

Morning Brief

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Chinese investors want a piece of the shepherd’s pie.

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Ernst & Young has big plans post-breakup.

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SpaceX continues to soar.

International

Chinese Investors Seek Greener Pastures in Ireland

Wealthy Chinese people are trading in Big Brother Xi and power suits for Leo Varadkar and Aran sweaters.

Fearing an economic downturn and an increasingly oppressive government in their home country, Chinese investors are buying their way into Irish residency at astonishing rates, giving new meaning to the phrase “Celtic Tiger.”

The Land of Saints and Scholars

China’s push to overtake the US as the world’s largest economy has been dealt a host of setbacks like housing crises, spikes in unemployment, and of course, never-ending supply chain issues caused by its infamous and now kaput zero-covid policy. The economy will likely rebound eventually, but even before the pandemic gripped the world, Chinese millionaires were looking to diversify their real estate portfolios, seeking a nice quiet place they could rest and… check their Facebook accounts without fear or censors.

Ireland’s Immigrant Investor Program grants visas to foreigners who invest heavily (roughly $450,000 to $2 million) in local enterprises, listed real estate trusts, or cultural initiatives. Since it began in 2012, the increasingly popular IIP has catered to applicants from China, and today Chinese investors account for more than 90% of the approved applications. As of September 2022, the program received roughly 800 total applications compared to just around 250 in 2021. China was responsible for the bulk of inquiries:

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While many nations have similar investment schemes, Ireland succeeds where others don’t because the money goes toward economic areas that really need it, investors told the Financial Times. Two Chinese immigrants said they put hundreds of thousands of dollars into the same educational fund because they started sending their children to Irish schools.

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Former Gaelic footballer Peter Fitzpatrick told the Financial Times he has raised almost $16 million from Chinese IIP investors to build the first Gaelic games stadium in his county in 60 years.

Kiss Me, I’m “Irish”: Yanks make up the second largest portion of investors applying for Ireland’s immigrant program, but that’s roughly 2% of all applicants. US applications are driven less by economics than politics. It’s safe to say for the past six years, America’s political and cultural landscapes have been, you know, utter chaos. Whether it’s changing gun control laws or reproductive rights, plenty of Americans would rather avoid the mess entirely and shove off for the Emerald Isle.

– Griffin Kelly

Accounting

Ernst & Young Consulting Arm Plans M&A Shopping Spree

After its breakup, Ernst & Young is exploring new relationships.

Ahead of the long-awaited separation between the big four accounting firm’s audit and consulting arms, the Financial Times reported Sunday that the latter division is setting aside up to $2.5 billion for an M&A shopping spree to bulk up following the divorce.

The Ernst & The Young & The Restless

The timing is tricky for EY’s big parting. On one hand, market conditions for the consulting firm’s planned IPO are a lot rockier today than they were over a year ago when EY executives first announced the split. Back when cash was cheap, the firm had planned to raise around $11 billion in equity and another $18 billion in debt en route to a public offering that would line the pockets of the firm’s many partners. That payout may now be a bit smaller than originally promised. But there’s a silver lining: Those same tough market conditions generally foster a strong environment for M&A activity.

After all, the entire idea of separating the audit and consulting businesses was to allow both to grow faster without the burden of bumping into any pesky conflict of interest conundrums. Now according to the FT, the consulting firm, which will likely operate in New York under an entirely new name, will have a $2.5 billion war chest to acquire fresh targets:

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Potential acquisitions include niche law firms outside the US, tech and ESG-focused consulting firms, as well as other corporate strategy advice firms.

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Targets are expected to be companies with about $400 million in annual revenue. Overall, the firm plans on acquiring an extra $1.5 billion in annual revenue by the end of 2024, sources tell the FT.

All in Good Time: The final vote among EY partners is set for around the end of the first quarter — the busy season in accountant’s terms — as the higher-ups nail down the financial details. Still, virtually all of the 13,000 partners have already been assigned one side or the other, with the consulting firm taking around 7,000 to reflect its slightly higher revenue draw. Once complete, the newly independent arm will be able to operate in the M&A market with much higher efficiency. “Every potential acquisition, on average 25 percent of the revenue we have to say goodbye to on day two because we audit it,” Andy Baldwin, EY’s global managing partner for client service, told the FT. “We won’t have that conflict anymore.” Who the consulting firm turns to for audit services remains an open question.

– Brian Boyle

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Space

SpaceX Plans to Increase Launches Even Further in 2023

(Photo credit: Steve Jurvetson/Flickr)

SpaceX has a New Year’s resolution to take not one small step but a giant leap in rocket launches.

Last year wasn’t all gloom and doom for SpaceX founder Elon Musk, the world’s no-longer-richest-man. While his Twitter deal turned into a slow-moving disaster and Tesla stock nose-dived, Musk’s rocket company quietly led both private and government enterprises in launches across the world, according to a recent report from astrophysicist Jonathan McDowell.

The SpaceX-Factor

SpaceX’s success can be succinctly boiled down to one leading factor: its Falcon 9 rocket, which utilizes an innovative reusable booster that alights back on earth after lifting spacecraft out of the atmosphere. SpaceX used the Falcon 9 last year for 60 of its industry-leading 61 rocket launches, earning the craft the world record title for most launches of a single vehicle type in a year. That’s a stunning pace of more than one launch per week, roughly half of which were for sending the company’s Starlink satellites into orbit, according to FAA data.

SpaceX alone accounted for roughly one-third of the 180 rocket launches last year, nearly single-handedly matching the 62 launches out of China, and blowing away the 21 rocket launches from Russia. In 2023, it has designs for an even more expansive enterprise:

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SpaceX is planning 100 orbital flights in 2023, according to Musk, for whom the sky is clearly not the limit. The company already launched a rocket last week, which marked one Falcon 9 booster’s 15th successful vertical landing, tying a company record.

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The competition is doing its most to keep up, some better than others. Lockheed Martin and Boeing’s joint United Launched Alliance has plans for the inaugural flight of the Vulcan Centaur in the first quarter of this year; meanwhile, Jeff Bezos’ Blue Origin has indefinitely delayed the inaugural launch of its long-in-development large-sized rocket New Glenn, which was scheduled for the end of last year.

Air Superiority: While Musk’s other ventures remain under the microscope, SpaceX looks poised to maintain a lucrative pole position in the future. While the overall size of the rocket launch market settled at around $8 billion last year, according to Deutsche Bank analysts, it is expected to increase to $35 billion by the end of the decade. Luckily for SpaceX, in space nobody can hear you tweet.

– Brian Boyle

Extra Upside

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Hello, Operator…Operator?! AT&T is cutting 411 for millions of customers.

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Seattle’s public school district is suing Big Tech for ruining students’ mental health.

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Behind every disruptor (think Netflix, AirBnB, Amazon), there is a laundry list of ground-breaking technologies being tested, proven, and patented. Discovering where big tech is securing new patents has never been easier with our friends at Patent Drop. Sent twice weekly, this no-cost newsletter gives you insight and analysis on everything from Microsoft’s investment in haptic feedback sensory gloves to Ford’s robot-assisted package delivery — and what these innovations actually mean. Join 12,000 readers on the bleeding edge of tech – sign up here.

Just For Fun

Full circle.

No surfers on this beach.

Written by Griffin Kelly and Brian Boyle.

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