RPT-BREAKINGVIEWS-Dealmakers dance a Trump tango at Predators’ Ball

By Stephen Gandel

BEVERLY HILLS, May 6 (Reuters Breakingviews) - When the price of admission is $25,000, it’s easier to look on the bright side. At the annual Beverly Hills gathering of grandees hosted by Michael Milken, the onetime junk bond king, financiers expressed bold notes of optimism despite the unease over tariffs and the blurring of public and private markets. If the economy avoids the brink, the dark arts of dealmakers will preserve some lucrative business.

The confidence expressed this week at the Milken Institute Global Conference, whose predecessor event was Drexel Burnham Lambert’s Predators’ Ball, are out of step with the prevailing sentiment after President Donald Trump hosted “Liberation Day” last month. His madcap U.S. import duties threaten to upend companies around the world, whose CEOs, board members and consiglieri account for many of the shindig’s 5,000 attendees. Mid-sized firms, including the thousands owned by buyout shops, are particularly vulnerable.

Any related anxiety was stifled at the Beverly Hilton, however, where silver linings were emphasized instead. Kristalina Georgieva, managing director of the International Monetary Fund, predicted U.S. trade levies would prompt overdue economic reforms in China and force other countries to form closer and beneficial alliances. As for private equity-backed companies, Apollo Global Management APO.N CEO Marc Rowan said they would adjust to new realities quicker than others because of their combined scope and centralized oversight.

Adding to the cheer was Virginia Governor Glenn Youngkin, a Republican who spent 25 years at Carlyle CG.O. He said the trade war would lead to a U.S. employment renaissance, with manufacturing jobs becoming a stronger option for high-school graduates averse to borrowing heavily to attend college.

Gary Cohn, the former Trump adviser and Goldman Sachs alumnus, said forthcoming tax cuts would more than offset any drag from tariffs. The queue to get into “Common Sense from Uncommon Investors” was longer than one to hear Lazard LAZ.N CEO Peter Orszag, Alphabet President Ruth Porat and others discuss “U.S. Economic Competitiveness in a Changing World.” One of the few overheard notes of “pessimism” was that American capital markets have slipped from being extremely exceptional to just well-above average.

All the enthusiasm was laid on thick, but it’s easy to glean the motivating factors. For one thing, the S&P 500 Index has rebounded 13%, recovering most of the losses of the previous few weeks. Some of the fearmongering over M&A also has been proven wrong. Companies, including drugstore-chain operator Walgreens Boots Alliance WBA.O and Google-owner Alphabet GOOGL.O, unveiled 20 deals worth at least $10 billion during the first four months of 2025, the most since LSEG started compiling such data in the 1970s.

Moreover, many smaller U.S. firms are hanging in there so far. Even though consumers are worried, they have largely held onto their jobs and continued to spend. And despite years of fretting over the swell of fund managers competing with banks to provide business loans, the private credit industry withstood the initial tariff turmoil.

From behind closed doors, some apprehension did seep out. Smaller funds are starting to struggle to raise money. A dormant market for new stock issuance is making it tougher for buyout firms to crystallize investments. At the Milken conference, however, such problems are opportunities. Deals can be cleverly structured to make all involved happy. Money is also available, at the right price. And bravado is in abundant supply. The tempo may change from year to year at the Predators’ Ball, but there’s always someone ready to dance.

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CONTEXT NEWS

The Milken Institute Global Conference is taking place at the Beverly Hilton in Beverly Hills from May 4 to May 7.