80 investments a year, focusing on infrastructure and covering every industry from fossil fuels to pharmaceuticals. So far most new investments have assisted America’s scramble for critical minerals. This includes, among other ventures, lending $570m to a rare- earths mine in Brazil and creating a mining joint venture with the Uzbek government. Mr Black is using the DFC’s new ability to invest in the rich world to start snapping up shares in an Australian graphite miner with assets in Louisiana. He has also signed a $1bn deal with Gecamines, a state mining conglomerate in the Democratic Republic of Congo (DRC), and Mercuria, a Swiss commodity trader, to export Congolese copper. In contrast to Mr Biden’s preferred approach of helping individual firms, many of the new transactions are interconnected. Finance for two infrastructure projects, a railway in Angola (worth $550m) and another in the DRC (up to $1bn), should eventually help transport minerals including copper back to America. Other deals in Africa are under way but details are for now too sensitive to release, in officials’ telling. The DFC’s activity in areas other than critical minerals has been less frenzied. Most ideas remain speculative. Insiders at the DFC and the State Department say that these have included deploying the DFC’s capital to encourage American oil firms to invest in Venezuela, whose dictator Mr Trump snatched in January, and using it to finance projects in Cuba, which may be next on the president’s hit list. One exception is a fund which the DFC runs with the Ukrainian government, created by Mr Trump as a consolation prize for the withdrawal of American military aid, whose first investment backed a maker of drone- navigation technology. Another is the Hormuz insurance scheme. The DFC recruited Chubb, an American underwriter, to organise private-sector policies worth $20bn and threw in $20bn for reinsurance to pull premiums down. The shipping venture illustrates one pitfall of being at Mr Trump’s beck and call. Although the DFC has insured firms before, it has no experience with shipping, which relies on specialist underwriters. And the problem in the
Gulf is less a lack of policies or their prohibitive cost than shipowners’ and captains’ reluctance to risk their vessels being blown up. A related problem to lack of expertise is the DFC’s skeletal staff. According to the latest available data from the end of 2024, it employed just 700 people at the time, compared with 21,000 at the World Bank. Being lean is one thing when you are disbursing $5bn-10bn a year but another if you manage a diversified loan book of $200bn plus a $5bn equity fund. Understaffing may explain why the DFC has yet to announce infrastructure investments unrelated to minerals. Even some of the agreements already signed, like the one with Uzbekistan, have not resulted in any actual investments. The last challenge for the new-look DFC is avoiding charges of cronyism. Over the past year companies linked to the president’s inner circle have won government deals, including in areas of interest to the DFC. Last August, for example, a venture fund which counts Mr Trump’s eldest son, Donald junior, as a partner invested in a maker of rare-earth magnets which subsequently received backing from the Commerce Department. Mr Trump junior, his fund and the magnet-maker all deny any impropriety. Mr Black would ideally avoid having to issue similar denials. ■ For more expert analysis of the biggest stories in economics, finance and markets, sign up to Money Talks, our weekly subscriber-only newsletter. This article was downloaded by zlibrary from https://www.economist.com//finance-and-economics/2026/05/07/donald-trumps-foreign- policy-gets-a-muscular-finance-arm
Finance & economics | Buttonwood Can Bill Ackman save the closed-end fund? An outspoken financier wants to build a modern-day Berkshire Hathaway May 7th 2026 An aSSET MANAGER’s job is harder than merely beating the market. They must also deal with investors’ foibles. In private, some sound like doctors complaining about patients. Everyone is an expert these days, goes the typical gripe, especially after conversing with a large language model. Yet clients still don’t know what’s good for them. Sovereign-wealth funds spurn liquidity arrangements that may drag down returns, then discover their countries urgently need cash to buy weapons. Individuals clamour for faddish, overvalued stocks, then want their money back when prices crash. Such behaviour saps investors’ wealth and causes no end of headaches for portfolio managers. Assets must be sold at the worst possible time, crystallising losses that might otherwise have been temporary. The sizes of
funds, and hence the fees they generate, can fluctuate by far more than the market. Worst of all, panicked withdrawals can force activist managers to cede control of companies before they have had a chance to turn the business around. These kinds of considerations explain why, on April 29th, Bill Ackman raised $5bn for a new “closed-end” fund, from which clients cannot remove their capital. Pershing Square USA, listed on the New York Stock Exchange, is the largest such fund ever to have been launched. It is helped by the fact that Mr Ackman is one of the world’s best-known money managers. He calls it his attempt to build a modern-day Berkshire Hathaway, the colossal vehicle that has made Warren Buffett into an investing icon. In fact Mr Ackman is trying something more ambitious. He wants to rehabilitate an asset class that, despite obvious attractions, has been beset by problems since before Mr Buffett bought Berkshire 61 years ago. The closed-end fund’s original sin derives from its biggest strength: investors cannot withdraw capital, but still want the option to cash out. So the funds tend to be listed on stock exchanges, allowing investors to sell their stakes to others. The bemusing thing is that, persistently and with few exceptions, the funds’ shares generally trade at big discounts to their underlying net asset value (NAV). CEF Advisers, a research firm, reckons that over the past 25 years the average such discount has been roughly 5%. Shares in Pershing Square Holdings, a pre-existing closed-end fund run by Mr Ackman and listed in London, currently trade for nearly a third less than its NAV. NAV discounts cause all manner of problems. Journalists write snide columns about how they are proof of poor management, outsize fees or overvalued investments. Even worse, the discounts invite corporate raiders to air similar complaints, then buy stakes in discounted funds and try to gain control of their boards, liquidate assets and turn a quick profit. On April 30th Saba Capital, an American hedge fund, won a long and bitter such campaign against the Edinburgh Worldwide Investment Trust.
In truth, the source of NAV discounts has long been mysterious and hotly debated. A small one makes sense for a fund filled with fairly valued assets that also charges fees. One larger than a few percent is more puzzling, especially if you believe the fund’s manager can outperform the market. Way back in 1949 Benjamin Graham, Mr Buffett’s mentor, described the NAV discount as “an expensive monument erected to the inertia and stupidity of stockholders”. Can Mr Ackman demolish it? He argues, naturally, that the discount at his London-listed fund is no reason to doubt him. It reflects the punitive taxes faced by Americans—his natural clients—when investing abroad and strict regulatory limits on marketing. The new fund’s domestic listing means it does not face the same barriers, making it easier to drum up demand. Mr Ackman’s public profile and big social-media following should help, too. He and his staff also control a large enough portion of the fund to deter hostile takeovers. More important is whether the new Pershing Square USA can make as much money as Pershing Square Holdings. Between the debut of that fund’s predecessor in 2004 and the end of 2025, the vehicle generated annualised investor returns of 16.2% after fees, compared with 10.7% for America’s S&P 500 share index. Viewed in this light, its enduring NAV discount is a curiosity rather than a deal-breaker. A couple more decades of such outperformance and that comparison to Berkshire Hathaway might not seem arrogant. ■ Subscribers to The Economist can sign up to our Opinion newsletter, which brings together the best of our leaders, columns, guest essays and reader correspondence. This article was downloaded by zlibrary from https://www.economist.com//finance-and-economics/2026/05/05/can-bill-ackman-save- the-closed-end-fund
Finance & economics | Free Exchange The myth of the petrodollar The dominance of America’s currency runs deeper than oil May 7th 2026 ECONOMISTS LIKE to preach prudence, but they do not always practise it. Ibrahim Oweiss was a young economist in Egypt’s Ministry of Industry when he offered some frank advice to his bosses. He warned against a suffocating overconcentration of industry in Cairo and Alexandria. And he later criticised General Nasser’s hollow boast that Egypt made everything “from the needle to the missile” (it made neither well). This incaution made it safer for him to leave the country in 1960, and hard to return. In 1974, as a professor at Georgetown University in Washington, Oweiss turned his attention to another troublesome concentration of assets: the dollars accruing to the Gulf’s oil exporters faster than they could make use of them. “I wish to introduce a new term: petrodollars,” he said at a speech