Not long after the UK left the EU in 2020, a Bristol-based firm called Eskimo started selling a new kind of high-fashion and energy-efficient electric radiator, based on new technology developed by academics in the city.
They planned to send them around Europe using the Channel Tunnel.
It was a timely product given Europe’s green ambitions, and with orders flowing, its Birmingham factory was being kept busy.
The boss Phil Ward tells me his start-up has continued to grow, but that in his view it could have been so much more without what he calls “the Long Brexit effect”: in 2020, 40% of his exports went to the European Union, and by 2025 it was just 5%.
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The post-Brexit deal agreed with the EU by then-Prime Minister Boris Johnson in December 2020 guaranteed zero tariffs on exports to the EU, but Ward says that despite this, red tape and paperwork not directly related to tariffs were enough to create delays, costs and the expectation of hassle for prospective customers.
Eskimo did manage to export some goods to agents in France but it stopped selling directly to European consumers entirely. A planned expansion to Germany floundered.
And as Eskimo discovered when it attempted to export towel rails to Australia and New Zealand, both countries abide by international safety standards that are heavily influenced by the EU’s CE mark.
This matters because one theoretical potential Brexit benefit was that it would allow UK regulators to not follow the EU’s safety regulations and take a more pro-innovation, less regulatory approach for high-tech inventions.
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Eskimo’s experience is one example of a broader trend reflected in export figures. The UK Trade Policy Observatory at Sussex University calculated a rapid 26% reduction in the different types of UK exports by 2023, while a new study from Aston University Business School using five years of more detailed trade data concludes a loss of 53.8% of the type of exports and 31.5% for imports.
These figures for “trade varieties” are falls in the number of products sent to different EU countries.
A decade ago, many economists argued the UK would sustain longer-term economic damage by leaving the EU and many believe that damage has come to pass.
But to make that call you have to compare what did happen with what might otherwise have happened were it not for Brexit and doing that is a matter of method and statistical judgement.
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And that judgement has to account for the fact that the period since Brexit has been a time of huge global flux. The pandemic that struck in the spring of 2020, the war in Ukraine that began two years later and, more recently, the energy price shock sparked by the conflict in Iran all have to be accounted for.
So too does the question of whether a Brexit-free UK would have really kept up with the Silicon Valley tech boom in recent years to the extent Brexit Britain has.
The clear consensus of economists making the calculations say they have factored in the global turmoil when assessing Brexit’s impact. Others question their methods and the extent of Brexit’s impact.
Some of the most negative predictions back in 2016, including those that said the UK could experience a Great Depression‑style hit, proved unduly pessimistic. Whatever economic hit there was, it was not sudden enough to cause an instant recession.
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But those who believe the UK did sustain longer-term economic damage by leaving the EU say the hit was no less profound.
TMT sector professional. Over 20 years of experience working in the sector in Europe and outside Europe. Decade of investing experience to keep in close touch with companies and themes that are relevant for my work. Education in Corporate Finance.Companies where I worked are among others: KPN, Chellomedia, Liberty Global, UPC Cablecom Switzerland, Get Sweden, Ooredoo Middle East, Cell C South Africa, Du Dubai, Axiata South East Asia, Celcom Malaysia, Vodafone.
Analyst’s Disclosure: I/we have a beneficial long position in the shares of CHTR either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha’s Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
Here we go again, repeating our mantra that the markets are too high and vulnerable to declines. Adding to our argument, interest rates are now on the rise around the world. Stock prices have ignored this, increasing risk, especially if rates continue to rise, which appears likely in the near term.
Interest rates impact everything from valuations (as discount rates adjust) to borrowing costs. The bloated U.S. federal government deficit has been further exacerbated by defense spending and escalating interest rates, since interest expense—the debt burden—was already a disproportionate amount of the federal budget. A vicious cycle could follow if the Treasury is forced to post even higher rates to attract buyers to its continuous bond offerings.
Bond yields are primarily rising because of inflation. Core PCE, the U.S. inflation rate excluding food and energy, is running at 3.3% annually. Producer prices have leaped materially and have yet to be passed on to consumers. As a result, it’s ironic that the new Fed chair will likely need to boost administered short-term rates despite the President’s insistence otherwise. Either way, the bond market is doing its job by increasing rates, requiring a higher yield to offset risks.
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Investors aren’t being compensated sufficiently given current market levels. Real yields (net of inflation) for short-term bonds are negative. Credit spreads between government bonds and corporates are tight, so reaching for yield is also generally unattractive. And based on several valuation metrics that have accurately forecast subsequent returns historically, forward annualized returns for the S&P 500 over the next several years are negative.
Record Low Consumer Sentiment
Consumer sentiment, which is normally high when the economy and stock markets are buoyant, is making new record lows, likely attributable to rising inflation expectations, polarized politics, falling home prices, AI-related layoffs, and the war with Iran. It’s not just a U.S. phenomenon; UK confidence is also at an all-time low. Credit card delinquencies in the U.S. are at their highest levels since 2008, car loan defaults are at multi-decade highs, and student loan delinquencies are at record-high levels. Consumers are clearly feeling pinched. Walmart (WMT) noted that their customers are fueling up less than 10 gallons per fill-up, topping off tanks since gas prices are so high. Inflation impinging upon real income growth and savings rates have also diminished.
Despite this, stock markets have powered higher. AI-related capital spending has been a significant driver of GDP growth—in Q1, all growth was attributable to AI and federal government spending. It’s propelled corporate earnings higher too.
Only time will tell whether we’ve been in a period of irrational exuberance or that the markets have been forecasting a period ahead of unusual prosperity.
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While market bottoms tend to occur in a flash, tops are usually longer drawn-out processes. Since the U.S. stock markets now appear to be priced for perfection, right at TRAC™ ceilings, with a current seasonal headwind and rising interest rates, we suspect a rollover is imminent.
Too Many Record Highs
Primarily because of rising inflation, yields on 30-year bonds have increased to 15 to 20-year highs in the U.S., UK, France, and Japan. While the correlation between stocks and bonds has been quite low historically, they’ve moved much more in tandem since 2022. If rates keep rising, bonds should fall and, in turn, share prices too.
Since Producer Price increases are running so high, record-high profit margins are vulnerable, especially since companies may be unlikely to pass price increases along. Net profit margins (now nearly 14%) are cyclical, having fallen to 8% or below on 5 separate occasions in the last 25 years. Free cash flows are already under pressure because capital spending on AI projects has surged.
Earnings expectations appear too high. Long-term growth estimates are about 19%. Previous peaks in expectations occurred in 2000, 2018, and 2021, and each subsequently led to substantial market declines.
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The stock market is overly concentrated. Nvidia (NVDA) and Apple (AAPL) alone are over 15% of the S&P 500. The top 10 stocks now exceed a record high 40% of the index value. Nvidia’s market cap alone has surpassed the entire Russell 2000 small cap index. Concentration may be masking the broader picture. During several recent record high days, more stocks declined than rose.
Allocations to stocks remain at record highs, which has also corresponded with market tops.
Asset managers remain overweight equities and individual investors have been using disproportionate amounts of leverage. Buying on margin and call option buying are at record highs, as is exposure to leveraged ETFs. The Market Vane Bullish Percentage index (an indicator that measures trader sentiment) is as high as it ever gets. An abundance of market optimism usually does not auger well for future returns.
The Cypress Capital Market Risk Index, that gauges vulnerability to major market drawdowns, hit 100%, its most elevated level, a mark that was only achieved near the market peaks in 1973, 2000, 2007, and 2021. In each of those instances, a much more attractive market risk level, below 40%, presented itself withing 24 months.
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Furthermore, the seasonal period just ahead typically provides poor stock market performance. May to November has underperformed historically, but it’s much worse during a midterm election year. There’s only been one up May-to-November period for the S&P 500 in a midterm election year since the early 1960s. And the average decline from intra-year highs is 18%. Though the period that follows, through the following April, has had double-digit annualized returns with no down periods since 1950.
For the Record
With a GDP growth rate of -0.1% for Q1, Canada just triggered a technical recession—two consecutive quarter of negative GDP growth. The Purchasing Managers Index, based on surveys of executives, is showing contraction for the eurozone, though it’s still above 50, indicating expansion, in the U.S.
Economic weakness should ultimately act to suppress inflation. Because major economies, such as China, Japan, and Europe rely so heavily on oil and gas imports, this alone should quell growth thereby suppressing inflation—high prices are the cure for high prices.
As such, we continue to hedge, holding short positions (where authorized) or inverse long ETFs.
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We have been anticipating a recession because the yield curve previously inverted, monetary growth has been weak, and unemployment is likely to rise. Our economic composite, TEC™, alerted us to a U.S. recession some time ago, though one has yet to occur.
While the current bout of inflation may carry forward for several months, it should dissipate. Ultimately, secular forces from high debt levels, poor demographics, and AI-related job losses and competitive threats should lower growth and result in disinflation. Though, if governments excessively print money to cover high budget deficits, inflation could remain problematic.
Our Model Portfolios
Our managed accounts are invested based on one or more of our Models (particular investment strategies with notional allocations of securities). A managed account’s holdings will generally be similar to its applicable Model’s, but may not hold all of them based on client-specific factors (income requirements, tax-related considerations, requests/restrictions, and cash available for purchases) and/or market forces which impact specific investment decisions from time to time.
The following descriptions of the holdings in our managed accounts are intended only to explain the reasons that we have made, and continue to hold, these investments in the accounts we manage for you and are not intended as advice or recommendations with respect to purchasing, selling or holding the securities described. Below, we discuss each of our new holdings and updates on key holdings if there have been material developments.
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All Cap Model
The All Cap Model combines selections from our large cap strategy (Global Insight) with our small and medium cap ideas. We generally prefer large cap companies for their superior liquidity and lower volatility. The smaller cap positions tend to be less liquid and more volatile; however, we may hold these positions where they are cheaper, trading at relatively greater discounts to our Fair Market Value (FMV) estimates, making their risk/reward profiles favourable.
Orca Energy Group (ORXIF) recently announced that it entered into an agreement to divest its Tanzanian business, along with its associated commitments and liabilities. Should the transaction be completed, the company would be positioned to distribute a significant portion of its cash holdings to shareholders.
Our large cap positions are summarized in the Global Insight section.
Global Insight (Large Cap) Model
Global Insight portfolios hold large cap stocks (typically with market caps over $5 billion at the time of purchase but may include those in the $2-5 billion range) where portfolios are managed Long/Short or Long only. At an average of less than 70 cents-on-the-dollar versus our FMV estimates, our Global Insight holdings appear much cheaper, in aggregate, than the overall market.
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In the last few months, we have made several changes in our large-cap positions. We bought Keurig Dr Pepper (KDP), Eli Lilly and Company (LLY), United Health Services (UHS),and WSP Global (WSPOF). We sold Cenovus Energy (CVE), Diamondback Energy (FANG), Grupo Aeroportuario del Sureste (ASR), Veolia Environement (VEOEY), and ServiceNow (NOW) (after buying it recently), after each ran up TRAC™ceilings near our FMV estimates and Henkel (HENKY) after it inflected down from a TRAC™ceiling.
Keurig Dr Pepper is one of the largest beverage companies in the U.S. Its portfolio includes Dr Pepper, A&W root beer, Snapple, Ghost energy drinks, Mott’s, and the Keurig coffee brewer. Last August, the company announced the acquisition of Peet’s Coffee. Investors reacted negatively. However, the acquisition appears to be a smart addition to the portfolio, especially in a post-GLP world where calorie-light coffee and energy drinks have become preferred indulgences. Though integration risk remains as with any substantial acquisition. The company now plans to split into two companies, Global Coffee Co. and Beverage Co., focused on its iconic non-coffee beverage brands. Investors have started to see the vision. Our FMV estimate is $38.
Eli Lilly and Company’s recent results have been astounding: Q1 revenue rose 56% on strong sales of key products such as Mounjaro, Zepbound, Ebglyss, and Jaypirca. Free cash flow was nearly $12 billion for the last twelve months. The company’s “key products” group, which is driving growth, generated over $13 billion of revenue, up from just $1 billion at the start of 2023. Lilly has a 60% U.S. market share in incretin analogues, and just surpassed Novo Nordisk (NVO)’s international market share. Volatility in the company’s share price has picked up around results relating to its and its key competitor’s GLP-1 efficacy. The price has risen to our $1,100 FMV estimate, but with over 30 therapies in Phase 3 and exciting technology such as VERVE-102 gene editing therapy, we are likely to raise our estimated value.
United Health Services provides acute care through hospitals and outpatient facilities and behavioural health services, primarily through inpatient centres. First quarter results were weak due to weather, a soft flu season, and volatility in state directed payments, health insurance exchange mix, and supplemental Medicaid. Medicaid-related operations accounted for 29% of 2025 revenue; however, looking at the core business model, there’s steady demand for acute and behavioural health care which should translate to mid-single-digit top-line growth and high-single-digit earnings growth. The move into virtual care, with the recent acquisition of Talkspace (TALK), a leader in virtual outpatient behavioural health care with over 6,000 licensed professionals, is underappreciated. The transaction should be accretive in the first 12 months post-close. Our FMV estimate is $240.
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WSP Global is one of the world’s largest engineering consulting firms. The share price has been highly correlated to the software sector, investors seemingly believing that AI poses an existential threat. This appears misguided since AI should be additive for WSP. First, AI enables better design, boosts productivity, and enhances customer relationships. Second, WSP is winning data centre business, from site due diligence to data centre design, with contract win rates of 75%. Data centre power demand has exposed outdated infrastructure around the world; WSP is seeing solid growth in the U.S. and was recently appointed to the Northern Powergrid’s Engineering Services Framework to support the delivery of power to 8 million UK residents across design, planning, engineering, and commissioning. Top-line growth should be mid-single-digits and free cash flow should hit $2 billion by 2030. Our FMV estimate is $250.
Multifaceted Diversification
We can construct portfolios with multiple unique return drivers—strategies that differ in style and approach—based on bottom-up fundamentals, macro tools, or pure quantitative analysis. This can provide exposure to different styles and asset classes beyond just stock and bond indexes. The approach aims to limit volatility and drawdowns by combining investment strategies, especially where returns are less correlated. The goal is to outperform through economic cycles with low correlation, therefore less susceptibility to market index declines.
The benefits of multifaceted diversification are not only from different ways to perform but also from a portfolio comprised of strategies that are less correlated. So that when a strategy underperforms, it’s less likely to occur at the same time as another strategy, which softens the volatility and drawdowns of the overall investment portfolio.
If you wish to discuss whether our multifaceted diversification approach might apply to your personal situation and investment accounts(s), please contact your investment representative.
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Global Tactical Allocation Model
Our Global Tactical Allocation Model (GTAM) investment process combines macroeconomic analysis with valuation and momentum. ETFs (exchange traded funds) are used to gain exposure to 4 broad asset classes: Equities—major markets, emerging markets, sectors, styles, private equity; Fixed Income—bonds issued by governments, investment grade corporations, high-yield issuers, as well as mortgages, and bond indexes; Real Assets—real estate, infrastructure, renewable energy; and Commodities—Precious Metals or Oil. GTAM emphasizes ETFs that should outperform based on the macro environment, are selling at attractive absolute and relative valuations, possess good relative price momentum, and are at TRAC™ floors.
Current exposures are: Equities (83%); Real Asets (17%), Fixed Income (7%); and Commodities (none). Its current broad themes are international equities, software, consumer staples, insurance, healthcare, and forestry.
Quantitative Investment Models
Quantitative equity strategies commonly select securities based on systematic, rules-based decisions, using technology to uncover and exploit historical statistically significant anomalies. Our quantitative equity strategies employ proprietary and systematic processes that rank large cap stocks based on factors such as relative valuation, operating metrics (quality), financial strength, and price momentum. The two models noted below select approximately 30-40 holdings from the top-ranked stocks in the model’s respective universe. TRAC™ is utilized to optimize entry and exit points.
The Quantitative Global Value Model (QGVM) invests in large-cap equities from around the world. The U.S., Canada, and Japan currently represent the top 3 countries. The top 3 sectors are Financials (25%), Information Technology (20%), and Consumer Staples (15%). The companies held in QGVM currently have the following characteristics: median forward P/E of 17.1x, ROE and ROIC of 23% and 13%, respectively, and dividend yield of 1.8%.
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The Quantitative Canadian Value Model (QCVM) restricts its universe to Canada’s S&P/TSX Composite. The top 3 sectors are currently Information Technology (22%), Materials (21%), and Financials (19%). The companies held in QCVM currently have the following characteristics: median forward P/E of 13.2x, ROE 15%, and dividend yield of 1.5%.
Income Model
Our high-yield investment strategy has an average current annual yield (income we receive as a percent of current market value of income securities held) of about 5.0%, and most of our holdings—corporate bonds/debentures, preferred shares, REITs, and high-yielding common shares—trade below our FMV estimates.
U.S. high-yield corporate bonds ((ICE BofA Index)) yield 6.9%. The spread versus government bonds appears too narrow, less than half the historical average of 5.5%. A widening to the average implies a yield closer to 10%. If the economy weakens and corporate delinquencies increase, spreads could expand even further. As such, we continue to carry cash in most of our income accounts, awaiting better entry points.
We sold Diversified Royalty (DIVRF) when it inflected down from a TRAC™ ceiling in line with our FMV estimate.
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Investment Grade Income Model
Our investment grade strategy utilizes a systematic process to rank Canadian investment-grade rated corporate bonds based on their duration, yield, financial strength, and momentum.
Currently, positioning has emphasized longer-dated bonds—duration is 10.3 years, 4.7 years more than the S&P Canada Investment Grade Corporate Bond Index. The average yield-to-maturity is 4.8% versus 4.1% for the index.
Records Were Made to be Broken
Markets should rise over time, achieving ever-higher record levels. Earnings rise as the economy grows and assuming fair valuation levels are maintained, new highs ought to be expected. However, market rises don’t normally occur in an up-and-to-the-right straight line. Ebbs and flows are the norm, frequently sizeable ones.
When profit margins, optimism, and exposure to stocks are all at record-high levels, near-term record highs in the markets shouldn’t be anticipated, especially when valuations are so high and the prospect of a peak in the economic cycle is elevated.
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The markets appear ready for a timeout.
Randall Abramson, CFA
References
In this letter, ROE, ROIC, dividend yield, yield, and yield to maturity, are calculated for the respective Model portfolio based on the holdings as at the date of this letter of an actual representative account managed in accordance with such Model. These figures are neither a measure of results achieved nor projected future performance. The Model’s holdings, and therefore ROE, ROIC, and yields, are subject to change at any time and may differ among accounts managed based on the same Model.
All investments involve risk, including loss of principal. This document provides information not intended to meet objectives or suitability requirements of any specific individual. This information is provided for educational or discussion purposes only and should not be considered investment advice or a solicitation to buy or sell securities. The information contained herein has been drawn from sources which we believe to be reliable; however, its accuracy or completeness is not guaranteed. This report is not to be construed as an offer, solicitation or recommendation to buy or sell any of the securities herein named. We may or may not continue to hold any of the securities mentioned. Generation PMCA Corp., its affiliates and/or their respective officers, directors, employees or shareholders may from time to time acquire, hold or sell securities named in this report. It should not be assumed that any of the securities transactions or holdings discussed were or will prove to be profitable, or that the investment decisions we make in the future will be profitable or will equal the investment performance of the securities discussed herein. E.&O.E.
While older people are most likely to vote, it is younger generations who feel the most short changed.
With house prices rising more slowly than earnings, purchasing a home for the first time is more possible compared to just a couple of years ago. At the start of the year, the Nationwide Building Society said mortgage payments accounted for a third of take home pay – well below the record of 48% in 1989.
But today’s prospective buyers tend to be juggling high rental costs too, making it harder to save for a deposit. This is partly he average age of the first time buyer has risen over recent years.
The most sustainable solution is to build more homes, but the government’s behind on its target. The number of new homes was down by 6% last year and below the 300,000 needed to reach the government’s target.
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Andy Burnham wants to build more social housing, which would help. But, as successive governments have found, it’s not easy.
Housing is one the many big plans Burnham has hinted at to cure our economic malaise, but he has to grapple with a challenging inheritance.
Ironically, the easiest way to fund his plans would be to draw on the spoils of faster growth.
Like many before him, Andy Burnham’s vision appears to be that you have to spend more money to make money. But whose money?
The Nasdaq and the S&P 500 have closed at more than one-week lows, dragged down by sharp losses in semiconductor stocks as investors scrutinised growing debt-funded AI spending.
E-commerce giant Alibaba has launched a high-stakes legal challenge against the US government, suing to get off a Pentagon blacklist that claims it is linked to the Chinese military.
The US Department of Defense (DoD) has said that because Alibaba complies with Chinese technology regulators, it is effectively an arm of the military.
In the lawsuit filed in a California federal court Alibaba pushed back, claiming the determinations “have no basis in fact or law”.
The challenge comes after the Pentagon recently expanded its blacklist of companies it will not be able to do business with from the end of the month to include massive tech names like Baidu, BYD, and Nio.
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The defence department put Alibaba on the blacklist, saying the firm was a “military-civil fusion contributor to the Chinese defence industrial base” because of its regulatory ties to Beijing.
But Alibaba countered the argument, saying none of the members of its independent board had any military affiliation.
Every multinational operating in China – including American firms – must follow the exact same local rules, it noted.
Its platforms, Alibaba said, are built for retail and cloud computing, not weapons or intelligence.
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“Alibaba is not a Chinese military company nor part of any military-civil fusion strategy,” the company told the BBC.
“The decision to place Alibaba on the 1260H list is arbitrary and capricious, and we are filing a lawsuit against the Department of War to demand removal from the list,” it added.
While the blacklist does not freeze finances immediately, it triggers a brutal operational penalty on 30 June.
Starting next week, the Pentagon is legally banned from doing business with any blacklisted firm.
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Crucially, the law also extends to any US contractor that shares a lobbyist or law firm with a blacklisted entity. In Alibaba’s case, the company argues that this restriction creates a functional blockade, forcing its long-term American advisers to sever ties to protect their own lucrative defence contracts.
The rule effectively strips the company of its political and legal voice in Washington at the exact moment it needs to defend itself.
According to the complaint, Alibaba had previously asked to meet with the agency to address the Chinese military affiliation concerns, which included presenting evidence of its US economic contributions.
However, the tech giant says that even after its submissions, the agency did not raise any concerns with the firm nor did it request additional information. Rather, it “designated Alibaba without notice or a fair hearing”, the compliant notes.
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The DoD declined to comment on the matter, telling the BBC, “We do not comment on ongoing litigation”.
‘The area has emerged as one of the most dynamic economic centres outside London’
Haydn Aird, head of private banking, North and Midlands, for Hampden Bank(Image: Hampden Bank)
A private bank is opening its first Manchester office this week as it says there has been a “structural shift” in wealth creation in the UK beyond London and the South East. Hampden Bank is launching its new North and Midlands office at the Stock Exchange Hotel this Wednesday after announcing plans for the office last year.
Hampden has a base in Edinburgh, where it was founded in 2015, and another in London that it opened the same year. In its most recent accounts, covering FY 2025, the bank said it had broken through £1bn in deposits for the first time.
Haydn Aird, head of banking for North and Midlands at Hampden Bank, said: “We have expanded our presence in the region having recognised a structural shift in where wealth is being created across the UK. When you look at Greater Manchester and the wider North West, the area has emerged as one of the most dynamic economic centres outside London and that growth is translating to increasing levels of private wealth.
“The North West alone is home to tens of billions in entrepreneurial wealth across business owners, investors, and family enterprises, underpinned by strong activity across sectors including property, technology, and professional services.”
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Tracey Davidson, CEO, Hampden Bank, said: “In a market increasingly shaped by commoditisation and digitisation, we continue to believe in the value of a personal relationship-led approach to private banking, one where technology enhances rather than replaces the human experience.
“Our new team covering the North and Midlands demonstrates our belief that clients value connecting in person, and this new base enables us to expand the bank outside of our existing locations in Scotland and the South of England.”
Brian Rolapp, CEO of the PGA TOUR, speaks, during an announcement of a new competitive model to the PGA TOUR, prior to Travelers Championship at TPC River Highlands on June 23, 2026 in Cromwell, Connecticut.
Ben Jared | PGA Tour | Getty Images
Golf fans are finally getting details on a new chapter for the PGA Tour that’s designed to elevate competition and raise payouts for winners.
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PGA Tour CEO Brian Rolapp unveiled the new competitive model for professional golf’s premier circuit ahead of the Travelers Championship taking place this week outside of Hartford, Connecticut.
Rolapp has prioritized modernizing the Tour since he was appointed as CEO in June 2025 following a 22-year career at the NFL. The Tour’s boards also approved Rolapp to succeed Jay Monahan as commissioner following Monahan’s retirement at the end of the year, the Tour said Tuesday. Rolapp will retain his role as CEO.
“We had a productive meeting yesterday where our boards approved the Future Competition Committee’s recommendation to establish a new competitive model for the PGA Tour that will begin with the 2028 season,” Rolapp announced Tuesday.
Instead of one main tour schedule of events, the new format will feature two distinct series of tournaments: one, a premier track called the PGA Tour Championship Series and a second that offers a pathway toward those elevated events called the PGA Tour Challenger Series.
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The new format will be familiar to fans of other sports like soccer, where some leagues feature differentiated divisions that promote and retain the best performing teams, while relegating those who don’t perform as well to lower circuits.
In the press release, Rolapp called it a “new competitive model grounded in meritocracy, with clearer pathways, higher stakes and more consistency when the best players compete together.” He added that the focus will now shift to finalizing details and preparing to implement the system for the 2028 season.
Wyndham Clark, just off Sunday’s US Open win, applauded the changes Tuesday, telling CNBC in an interview that the Tour is in “an amazing spot.”
“I think this two-track system is going to bring meritocracy and it’s going to make it easier to follow the PGA Tour, and then match play should be a lot of fun to watch,” he said. “I think the Tour has made an amazing push to get better and improve their product.”
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The proposed two-track system will create a schedule that has roughly 23 to 24 events for the season, including The Players Championship, golf’s major championships — The Masters Tournament, PGA Championship, US Open and The Open Championship — season-ending tournaments and any international team events that are contested each year, like the Ryder Cup or Presidents Cup.
The season will run from around February through August of each year and will generally consist of tournaments with four 18-hole rounds where roughly half the field will advance to play the full event after a 36-hole cut.
The Tour will also bring back playoff events that feature so called “match play,” where winners are determined by a process of beating other players in head-to-head matchups, rather than by “medal play,” which determines a winner by best aggregate score over four rounds of play.
Match play most resembles other championship formats in sports like NCAA basketball, or the knockout rounds during World Cup soccer.
Another big distinction will be seen in the prize money at stake each week.
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For the Championship Series, the minimum purse each week will be $20 million and the venues will be in higher profile locations and bigger media markets. Challenger Series events will feature purses of at least $4 million at a minimum of 20 events during the season at “distinguished venues that have traditionally hosted PGA Tour events.”
There will be separate point systems in place for both circuits, and that will drive a promotion and relegation construct where a minimum of 90 players will keep their spots on the Championship Series after each season, and 20 players from the Challenger Series will be elevated, while lagging performers will be relegated.
The announcement on the PGA Tour’s new format comes at a time where the competitive dynamic in professional golf is at a crossroads. The past few years have led to what some golf fans have called a “civil war” in the sport, after the upstart LIV Golf League debuted in 2022 with much fanfare and a seemingly endless bankroll of funding from the Saudi Arabian Public Investment Fund.
Some of the sport’s top players left the ranks of the PGA Tour to join LIV Golf for large payouts. But the future of LIV Golf was cast into doubt earlier this year after the Saudi sovereign wealth fund announced that it would no longer fund LIV Golf beyond the end of the current season.
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LIV Golf CEO Scott O’Neil is in the process of raising fresh capital to fund the league’s operations in a post-PIF world. The league has retained boutique investment bank Ducera Partners and is actively engaged in soliciting investments. CNBC previously reported the league is looking to raise in the range of $250 million to $350 million to help execute its own revamped schedule and format that will focus much more heavily on team golf franchises and competition in the future.
The revamped structure for the PGA Tour was the product of much deliberation by its Future Competition Committee, which is comprised of six player representatives from the Tour’s ranks, alongside three business advisors.
The committee is chaired by golfing great Tiger Woods and includes fellow players Patrick Cantlay, Maverick McNealy, Keith Mitchell, Adam Scott and Camilo Villegas, as well as current PGA Tour Policy Board and PGA Tour Enterprises Board Chairman and former Valero Energy CEO Joe Gorder, Fenway Sports Group Founder and Principal Owner John Henry and Fenway Sports Group Senior Advisor and former Major League Baseball executive Theo Epstein.
“It was about bringing together different perspectives, having honest, hard conversations, and thinking broadly about what is best for the game that we all love,” Woods said at the event, his first public appearance since his DUI arrest in March.
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