Rouven Bergmann: The balance of managing long term and short term is always the biggest struggle for the CFO. You have to create the capacity to invest in the long term, but you also have to manage performance quarter to quarter. Certainly, 2024 was a difficult year, because of volatility in the end markets. There was a lot of geopolitical instability in the world and in Europe. Think back to the European elections and the uncertainty in France. This really has been a headwind in terms of decision cycles.

The timing of decision-making is becoming a bit less predictable for our customers. It’s not that they’re deciding against us or for the competition—that’s not the case. We are winning market share from the competition. But managing the cycle of transactions and deals has become really something that’s more difficult to predict.

To give you an example, we signed a strategic agreement with Volkswagen in December of last year; the first discussion started two years ago.

GF: What’s the impact of the new US tariff policy?

Bergmann: Clearly, 2025, with the situation that the US administration has started with tariffs, is creating a lot of uncertainty for our customers. Now they need to invest and adapt to the new world. I’m not worried about our future, but for sure, there could be short-term volatility and noise.

GF: There is a sort of academic debate over how the role of the CFO has changed: becoming more an ally and business partner of the CEO and less an accountant. What do you think?

Bergmann: I have been in this role for 10 years at different companies. For me, I don’t think it has changed. I think there are three types of CFOs. There is more of an accountant, who comes from the audit function, which I think is more about compliance and implementing standards but has less business interaction. Then there is the CFO who comes from an investment bank, who is more about capital and markets and investor communication. And then there is the operational CFO, who is deeply connected to the company’s value creation cycle. I think today you need to find the right mix of the three.

GF: What do you suggest to someone who is young and wants to become a corporate CFO?

Bergmann: Gain as much experience as you can with a company, in and out of finance. The CFO role is much more than finance; you have to understand the finance function, but also understand how the business works.

For example, when I was already at a very senior level at a software company, I left finance and worked as COO of product development. It was a role that was a combination of operational planning and financial planning. I had to find the right resource allocation mix, maintaining and optimizing what exists, while freeing up enough capacity to develop new products.

At the same point in time, we all know that there are constraints to resources. You cannot hire as many people as you want, so you really have to find productivity, move people around, and create that flexibility in your workforce. The company where I did that was one of the largest software companies in the world. There were 20,000 engineers in software development. So, I really learned the operational part of the company, and now I can combine that with finance.

Koller: It applies to most parts of the world. If you are a purely local business, in Europe or Asia, for example, then it’s less of an issue. But, if the US were to experience a severe recession, it would probably affect everybody. And then, of course, there are those businesses that are directly impacted—companies that export, import or compete with US companies. A lot of companies, even if they appear to be local, they’re competing with US-based companies, or they’re trading with US-based companies. So, the impact is felt far beyond the US.

GF: Are more companies growing frustrated with US volatility and seeking opportunities in Europe and the APAC region?

Koller: For most companies, it takes years to build or to change strategies from a geographic perspective. Some of the companies I talked to are thinking about these things, but, at this stage, you don’t just break into a market in a couple of months. If you want to build a business in a new country, or if you want to change your supply chain, these things take time. So it depends. If your supply chain is highly specialized, that could take years to restructure. If your supply chain is simple or there are lots of other producers, and you can switch from one country to another, that’s a little bit easier.

Bringing things back to the US is also very time consuming—no matter what industry it is. People are thinking about it and making plans, but for the most part, the timeframe of any kind of major structural change is fairly long, and you don’t want to commit to it until you probably know more about what’s going on.

GF: In this latest edition of your book, did you touch upon digital assets or how companies are building their own reserves?

Koller: We don’t address it, and I’ll tell you why. For the most part, a lot of what people are talking about is not a currency. We call it a cryptocurrency, but it’s not a currency. It is a speculative investment. And the nature of these speculative investments is unlike a stock or a bond. There’s no inherent valuation. We won’t know what the answer is eventually. It’s purely a function of supply and demand of investors and sentiment for many of these cryptocurrencies. It’s like investing in vintage automobiles or fine art. It’s nothing more than that. As far as I’m concerned, that’s why we don’t touch on it, because you can’t do anything with it, and then I wouldn’t understand why a company would put money into that. Because you’re really betting on market sentiment. You’re betting on other investors wanting to get into that market and pushing up the price.

GF: What about stablecoins?

Koller: Stablecoins are cryptocurrencies tied to real-world assets, usually the US dollar or another fiat currency. The more reputable ones are backed 1:1 by actual reserves. From a corporate valuation perspective, they’re not particularly interesting. If a cryptocurrency is simply pegged to the dollar but involves additional transaction costs, it doesn’t offer much advantage over using dollars directly.

There’s been talk for decades about something replacing the US dollar as the world’s reserve currency—whether the euro, the yuan, or others—but those alternatives face their own challenges. For a currency to be viable for transactions, especially everyday purchases, it needs to have a stable value. That’s why something backed by the dollar or another relatively stable fiat currency is necessary.

However, stablecoins don’t really factor into the strategic decision-making of most companies or investors unless they’re directly involved in currency or cryptocurrency markets. And that’s a niche area I’m hesitant to speculate on.

GF: Are there certain basic mistakes that happen at a company that hurts valuation or leads to their failure?

Koller: It’s rarely that a company is fundamentally unsound. The real issue is often the gap between how companies value themselves and how the market values them. Many CEOs and CFOs believe their companies are undervalued, but when we analyze hundreds of companies each year—using discounted cash flow models and peer comparisons—we usually find valuations are within 10% of fair value. That margin is small and can fluctuate day to day.

Companies, on the other hand, often have financial projections that are inconsistent with their market values, because the market doesn’t give them credit for things that they hope to achieve, unless they have a strong track record. For example, if an industry grows at 4% annually and a company projects 6% growth, the market may only price in 4%. If the company hits just that, it’s not a failure—investors never expected more. It’s not a disaster from a valuation perspective, because investors didn’t expect that anyway.

The bigger issue is the disconnect we saw in the dotcom bubble. There’s sometimes a disconnect, you might argue, with some of the big mega [magnificent seven] stocks. One of the characteristics I look for, in terms of potential overvaluation, is who are the investors in a company. And, in particular, what share of retail investors? And if you see a very high share of retail investors inside in a stock, that is often a sign of overvaluation. Retail investors don’t crunch the numbers. They typically buy based on emotion and hype. It may be a great company, but that doesn’t mean you should pay 100 times earnings for it.

GF: Could that also complicate M&A strategies?

Koller: Yes, although that does create an opportunity. Very few companies have the guts to take advantage of it. If my shares are overvalued, that’s the time when you can use those shares to buy something, and that’s great. We’ve seen a couple of those, but not that often.

GF: Over the eight editions on valuation, what’s the most surprising change that you’ve seen in how companies wrestle with value?

Koller: The most surprising thing isn’t how much companies have changed, but how little they have. And it’s not just because we’ve written a book, but other academics have done research. Many companies remain too short-term oriented. Large firms still try to cost-cut their way to success, which only works for a limited time. And while innovation continues, it often comes from smaller companies rather than the big players.

One positive shift has been the steady decline of conglomerates. More companies are breaking themselves up into simpler, more focused entities. This trend, certainly evident in the US and to some extent in Europe as well, has improved management effectiveness and is favored by investors who value focus and clarity. That’s probably the most meaningful change—the breaking up of complex companies into smaller ones.

GF: Do the recent headlines of Google and Meta being under scrutiny and possibly broken up exemplify that trend?

Koller: I can’t speak specifically to Google or Meta, because their business units are more interconnected than, say, a company making both valves and toothpaste—where there’s clearly no synergy. What matters isn’t size but complexity, especially when businesses don’t share customers, technologies, suppliers, or distribution channels. That’s when it makes sense to consider breaking them up.

More broadly, while the trend toward focused companies has been positive, many firms remain too short-term oriented. They often blame the stock market, but that’s not entirely fair. Our research shows that about 75% of investors—whether retail, index funds, or institutions—are long-term holders. The problem is that companies tend to pay too much attention to the loudest voices, which are often short-term traders. There’s still a lot of room for companies to take a more long-term approach, and that’s work that continues.

GF: In past editions or in this new edition on valuations, has there been any sort of trend or surprising development you noticed?

Koller: One major trend we’ve seen is the globalization of equity markets over the last 35 years. Today, the shareholder-base of large companies in Europe, Japan, and Taiwan often looks very similar to their US peers. As an individual investor, you can easily buy hundreds of international funds or even individual foreign stocks—and the same goes for investors abroad buying US equities. So, from a capital markets perspective, things have truly globalized.

However, corporate behavior still varies by region. On average, European companies continue to earn lower returns on capital than their US counterparts—though the gap has narrowed, and some of the best-performing companies in various industries are European. In Asia, there’s still a noticeable emphasis on size and prestige over value creation. I’m surprised that focus persists. While it’s slowly shifting, many companies still prioritize growth and scale rather than returns, which often results in lower valuations compared to US firms—unless they’re high-growth global competitors.

GF: What will modern finance look like in the future?

Koller: I’m hopeful that AI will help us value companies more effectively. Right now, it’s good at tasks like summarizing and researching quickly, and over time it may become more capable. But while tech—and AI in particular—makes up a large share of the stock market, it still represents a relatively small part of the broader economy. Most people still need housing, food, clothing, travel—those businesses aren’t going away.

AI will be used across many industries to improve customer experience, reduce costs, or enhance products, but it’s not fundamentally going to change things. Valuations are going to be disproportionate towards those companies.  But the real question is: Will companies use AI to actually boost profits, or will those gains be passed on to consumers, like with many past innovations? For investors and executives, the key is understanding whether AI is a true source of competitive advantage. That distinction will vary by industry, but it’s central to how we think about value in the future.

Paul Brody: The ability of people to pay each other in dollars is hugely valuable. And to give you a sense of how big stable- coin dollars have become, last month the ethereum blockchain ecosystem did $2 trillion in stablecoin payments, over 99% of which were in US dollars.

GF: Who is actually using them?

Brody: By far the most popular initial use case for stablecoin is in emerging markets. Countries without independent central banks often experience high inflation or even hyperinflation, and so demand for US dollars is really high among the local population.

GF: And they’re being used for cross-border remittances too?

Brody: A lot of traditional cross-border systems take days to execute, and they cost a fair amount of money. If both participants have smartphones and cryptocurrency accounts, you can send dollars across borders in a matter of seconds for almost nothing.

GF: Lately, the US Treasury Department seems to be saying that the US doesn’t need a central bank digital currency [CBDC], i.e., a digital dollar. It can use stablecoin. Is that your read too?

Brody: What we need is well-regulated stablecoin. We need some regulatory safeguards to make sure that if you say there’s a dollar on-chain, there’s also a dollar in the bank account to back that up, or its equivalent in assets.

CBDCs have been flopping, mostly because central banks don’t really know why they’re doing them. I’ve talked to many central bankers, and they generally have no idea why they’re doing this other than Facebook wanted one.

GF: How will blockchain technology change things for corporate CFOs and treasurers?

Brody: CFOs and treasurers have some questions to ask themselves: Am I plugged into the crypto and blockchain system? Can I make stablecoin payments? Should I include bitcoin in my corporate treasury alongside US dollar-denominated bonds? Going further, can I automate my business contracts? My procurement? How can I run my business operations more efficiently? And if a customer wants to pay me in stablecoin, can they do so? The answer for most companies today is, no, they can’t.

GF: If you’re a stablecoin issuer, how do you make a profit on that business?

Brody: You make money with transaction fees and, potentially, your float on the interest rate. But that depends on interest rates. If rates go down really low, it’s going to be a painful business. Fees are pretty small because it’s such a competitive environment.

GF: What does all this mean for banks generally going forward? Is it going to lessen their importance?

Brody: It’s going to change banks’ role, and may diminish it. It depends on how a bank makes its money.

Banks that make their money processing credit card transac- tions are the most at risk because blockchains represent a new, more efficient way to process transactions. You swipe your credit card in a store, and you don’t see the cost of the payment, but it’s real and it’s substantial, like 3% to 4%. International wire trans- fers are usually a fixed fee, as much as $50. Stablecoin transfers cost almost nothing by comparison.

But if you’re a regional bank that does a lot of corporate finance, blockchain probably doesn’t change your business that much.

GF: What about major custody banks, such as BNY Mellon, JPMorgan, etc.? Is their business at risk?

Brody: Major custody banks are in an interesting place. They have a ton of assets, and if you’ve got assets and you control and custody those assets, you’re then in a position to help people tokenize them.

So, this new technology is certainly a threat, but it’s also potentially a substantial opportunity. At the end of the day, if you’re custodying assets and you’re now helping people tokenize them or manage them in different ecosystems, that represents the additive potential to your business.

GF: In your book Ethereum for Business, you highlight the importance of blockchain-based smart contracts. With these, one can define not only dollars but all sorts of things, even coffee mugs. Why aren’t more corporations using smart contracts?

Brody: The answer is that blockchains don’t yet have privacy built into them, and this is a huge problem. But it’s being fixed. It’s like the early days of the internet, when we didn’t have encryption. Most companies don’t feel comfortable doing business without privacy.

It’s why private blockchains have never worked. If companies had a private blockchain, they thought it ensured privacy. What they didn’t realize is that inside that walled garden there’s still no privacy. If you’re a big company and you have all your suppliers in your private blockchain, you still can’t run your procurement process there, because supplier A can see how much you’re paying supplier B, and also how much you’re ordering from them.

GF: How deep are banks going to go in providing blockchain services?

Brody: Every single bank is going to offer some kind of DLT [distributed ledger technology] service. You have stocks, you have bonds [to offer clients], and now you may add crypto. Other institutions may send cash to an ethereum address for you, instead of setting up a wire transfer to a bank address. There will be new versions of money transfer and payments, and some of them are going to be quite sophisticated.

GF: Skeptics are asking when they will see blockchain’s “killer app”: meaning an application that’s universally used, along the lines of what email did for the internet?

Brody: Stablecoins are the killer app, the one that gets everybody on-chain. The stablecoin market is about to get crazy competitive, and yield-bearing stablecoins will be widely available soon.

“CFOs and treasurers have to ask themselves: If a customer wants to pay me in stablecoin, can they do so?”

GF: All in all, is blockchain a niche innovation—useful but not earth-shattering—or is it something that can fundamentally change global finance?

Brody: It’s not only going to change global finance, but it will transform all global commerce.

Blockchain is going to become the plumbing by which all B2B transactions are done.

And the reason it’s so transformational is that historically, money, contracts, and “stuff” [i.e., goods] all were in different systems. Companies still spend huge amounts on reconciling money, stuff, and contracts. For example, it costs the average large company about $100 to pay a bill. And the reason is, somebody in procurement has to say, I’ve got this bill. Does it match the purchase order that I sent out? Do the terms on the bill and the purchase order match the terms of the contract? And so on. Imagine a future where the money, the stuff, and the terms of the contract are all in the same digital system and they all reconcile with each other. It’s done instantly. In 10, 15 years, the whole process will be universal and invisible. Back-end plumbing, right?

Global Finance: It sounds like Ramaco Resources had a happy accident discovering rare earth elements in its Brook Mine project in Wyoming.

Randall Atkins: It was certainly a surprise. The way that the discovery evolved is that we were doing various research with the Department of Energy’s National Energy Technology Laboratory (NETL) on carbon products that could be made from the carbon within coal.

And part of NETL’s directive, I guess it goes back to about 2017 or 2018, was that the [US] Department of Defense had tasked them to discover where rare earth and critical minerals might be able to be found in the continental US because the Defense Department is concerned about supply lines of rare earths based on China’s dominance in the space.

They had asked us for coal core samples from our mine in Wyoming and, of course, from mines in West Virginia and Virginia. They did the same for several other mining groups, certainly not us specifically.

About a year later, they came back saying, “We’ve analyzed these [samples] pretty thoroughly, and we think we have discovered that you, in your deposit in Wyoming, may have some of the highest concentrations of medium and heavy rare earths that we’ve seen anywhere outside of Western China.”

GF: Has the latest round of tariffs changed the economics of developing this site?

Atkins: Well, it certainly has in the short term and likely will in the longer term. So, since the tariffs were announced, China has imposed an embargo on selling all rare earth elements that might have potential dual civilian and military use to the US.

We have about seven rare earth elements and critical minerals at the top of our list, and five of those seven have now been banned from export by China. As part of that ban, their prices have increased because people can’t get their hands on them.

GF: Ramaco is focusing on the heavier metals that China no longer exports to the US?

Atkins: We’re focusing on the medium and heavy rare earths. I mean, I’ll give you some names: neodymium, praseodymium, dysprosium, and terbium. Those are the four primary rare earths; the primary critical minerals are gallium, germanium and scandium. Those are the seven that we have and that we’re focused on. However, we have about 11 additional rare earths. Things like cerium, gadolinium, yttrium, et cetera, that are not as valuable as the seven that I first named.

GF: Can private industry develop the necessary infrastructure to process these ores independently, or is a public-private partnership needed?

Atkins: We were involved with NETL in discovering this. We have had conversations with the [US] government about other ways that they might get involved as we go further up the development chain, either from partnering with us in some fashion financially as we develop the processing or getting involved somehow in the procurement through the Defense Department, which is trying to establish new supply lines.

GF: Does this give you pause to see if you have thrown away rare earths from other mines?

Atkins: Yeah, great point. And indeed, NETL and others have looked at various coal seams across the country, and there has been discussion about finding rare earths in coal ash from power plants or acid mine drainage, without the need to extract new coal. Of course, the short answer to your question is no, we did not find rare earth in our other deposits back in the East … nor has anybody else, in sufficient concentration in those coal seams to make it economic.

GF: Where does Ramaco fit in the mine-to-magnet supply chain?

Atkins: Think of the supply chain as a food chain: once the ore is extracted from the ground in its raw form, it’s then beneficiated and processed into a concentrate. The concentrate then has all the elements mixed together. The next step is to separate the rare earth from the concentrate to make oxides, which are used to make metals.

The long answer is “Yes.” We will look at the possibility of taking this from mine to magnets because of the size of the overall deposit. We could also potentially go from mine to semiconductors because we could make semiconductor wafers. In addition to the rare earths, we have three critical minerals, which are now banned from exporting by China, gallium, germanium, and scandium, that can be used in the semiconductor process. So, given the size of what we’ve got over some time, certainly not on day one, we will try to take it as far up the value chain as we can.

GF: How long will it take to develop the necessary processing capabilities?

Atkins: We have been working on this with the Fluor Corporation for about a year and a half to identify the appropriate flow sheet and the refining models that would be used. And indeed, they’re in the process of designing the pilot plant.

So, what we will do from a development standpoint is we’ll start large-scale mining in June, and the larger material will then be used in a pilot plant, which we will start in August or September. Hopefully, we’ll have the pilot facility start the initial processing by the end of the year. That will run for a better part of a year. We plan to transition from the pilot to a full-scale commercial facility by the end of 2026. That would probably take about a year and a half to construct. So, we’re looking at probably the second half of 2028 before we would be in commercial production. Still, given the magnitude of what we would be building, that’s a reasonably quick timeframe.

Ron Bain: It’s been an active period during which we have delivered several transformative transactions that increased scale and diversified the asset portfolio. We completed a value-accretive corporate merger with Transglobe in 2022 that saw us acquire operating assets in Egypt and Canada. More recently, we acquired a non-operating interest in a producing field in Cote d’Ivoire through the acquisition of Svenska AB.

“In addition, we continue to drive organic growth across the portfolio with drilling campaigns, while expanding our footprint by adding new licenses that provide long-term upside potential. All of this leaves Vaalco well placed to consolidate its position as a leading independent exploration and production company.”

GF: What makes this business and industry a distinctive challenge for a CFO?

Bain: It’s a very exciting, fluid, and cyclical sector in which there is a lot of deal-making, a lot of investment, and the requirement to deploy material capital across the portfolio to deliver growth. The role of the CFO is to ensure access to capital to support growth objectives as well as work with the finance team and executive to mitigate risk: for example, through implementation of hedging instruments to protect the company against commodity downside.

GF: What absorbs most of your energy and time?

Bain: Most of my time is spent ensuring we maintain a robust balance sheet that balances organic and inorganic growth alongside our commitment to shareholder return. Vaalco is dual-listed in London and New York, so I also spend a lot of time engaging with our investors and wider stakeholders, overseeing our regulatory commitments to those listings, and playing a big role in the development of our strategy and our ESG agenda.

GF: What makes for a great finance team?

Bain: It’s important to have good communication within the team, so everybody knows the objectives and their respective roles in achieving those objectives. I am fortunate to have a great finance team across all our areas. I also have a close working relationship with our CEO, George Maxwell, having worked alongside him at our previous company, Eland Oil & Gas, which achieved a good exit for all stakeholders a few years ago.

GF: What is the role of AI in the finance function? How do you see it evolving at Vaalco?

Bain: AI is already in use in finance at Vaalco. We use AI-powered software to handle data entry as well as invoice processing with optical character recognition that extracts process data from receipts and documents with minimal human intervention. We implemented a global ERP system in 2024 and are collecting huge amounts of datasets through it. With the internet of things and the ability to integrate meter readings and monitoring gauges, we see machine learning models reading and learning from these large datasets to improve our decision-making.

GF: What keeps you up at night?

Bain: Economic and market uncertainty, together with an increased administrative burden via greater government regulation. My responsibility is, first, to ensure the company is performing for the benefit of all of our stakeholders. We have a lot of employees, so we must demonstrate that we are good corporate citizens and oversee a safe working environment.

We see ourselves as partners to the host governments in the countries where we operate, so we have a responsibility to the people of those countries to deliver a positive impact through our activities. As an operator of material-producing assets, we must always demonstrate operational excellence and environmental stewardship.

Brian Coulton: Our previous assessment was that the US would definitely embark on a sharp path of protectionism, but we thought the scale of it and the intensity of it would be something that got us back to where we were in the 1960s. Now, the calculations we’re doing of the effective tariff rate take us back to Edwardian times—120 years ago. It’s gone way beyond our expectations.

The effective tariff rate has been pushed in two directions. The reciprocal rates went down to 10%, and that’s a lot lower than the rates we were looking at in the immediate aftermath of “Liberation Day.” And we’ve had the bigger carve out for electronics. But going against that is the massive escalation in the US-China trade war. When we put those two things together, we still end up with an effective rate pretty close to 25%.

GF: What do you see as the impact on the global economy?

Coulton: We’re looking at a much worse tariff scenario for the rest of the world than we had in March, and significant downgrades to US and Chinese growth, and the knock-on effects that’s going to have.

This feels to us like it could be quite a significant adverse US supply shock, due to the scramble for US firms and consumers to find alternative sources of supply in the near term. If you’ve got bilateral tariff rates over 100%, it’s just got to collapse. And I don’t think supply chains can be redirected that quickly.

Inflation going above 4% in the US seems quite likely to us. That’s going to worry the Federal Reserve in itself, but just as important is what’s been happening to US households’ inflation expectations. We’ve now had two prints of the University of Michigan [Surveys of Consumers] showing medium- to long-term household inflation expectations have gone through the roof—I mean, off the charts. We haven’t seen anything like the recent readings since before the 1990s. That is a pretty serious threat to the Fed’s credibility.

So, while we still think the next move from the Fed is probably going to be a rate cut, I don’t think they’re going to be in any hurry to do that. What was interesting in [Fed chair] Jay Powell’s last speech was that he talked about the risk of a persistent inflationary impact from high tariffs. In that context, we’re going to see the Fed being very cautious about cutting rates, even though there’s widespread agreement now that US growth is going to slow quite sharply.

Against that backdrop, the dollar ought to be appreciating, but one of the interesting features of this crisis has been the weakening of the dollar. This may be a little source of comfort elsewhere; in the emerging-market world, it raises a bit of scope for more monetary-policy flexibility: a loosening as an offset to the growth shock that will come from the US and China. But the bottom line is, nobody really wins from a trade war.

GF: Is there a method to what the Trump administration is doing?

Coulton: There’s so much complexity! We’ve got sector-level tariffs, country tariffs on China, drug-related tariffs—so many different justifications for tariffs. So, it’s quite hard to draw a clear conclusion. The only thing that comes through consistently to me is this import substitution agenda that [Trump trade adviser] Peter Navarro is pushing, which is behind their approach to selling the reciprocal tariffs. But it has nothing to do with the actual data on reciprocal tariffs. It was all about trying to set tariffs at a level that, on the basis of Navarro’s models, would eliminate bilateral trade deficits completely. So, they just want to get rid of the trade deficit: not only the aggregate trade deficit, but each individual trade deficit. It’s about turning the US into a producer-focused economy from a consumer-focused economy.

On that basis, I would say that we’re not going back, under this administration, to anything like the sort of trade arrangements we had before. I think tariffs are going to stay high for a long time.

GF: What countries are especially vulnerable in the current climate?

Coulton: The classic vulnerable ones are those running the largest surpluses with the US, and where their exports to the US are large as a share of GDP. Vietnam, Mexico, and Canada are right at the top of that list. And there’s certainly a number of quite small economies where the Rose Garden tariffs were a real shocker.

But it’s China that’s looking particularly exposed now, because of its quite aggressive retaliation. And so, we’ve ended up with a tariff rate on China that’s just eye-popping.

That said, what does China have to its benefit? It’s a huge, $18 trillion economy. They not only have a diversified domestic economy, but they also sell as much to Europe as they do to the US. Total exports to the US are still under 3% of GDP. So even if it goes to zero, it’s nothing like the sort of shock that you would get in Mexico or Vietnam if the same thing happened. So they do have policy space; if there’s one economy that can take a really nasty US tariff shock on the chin, it’s China.

GF: During Trump’s first administration, Beijing adopted a “China Plus One” strategy of tightening ties with other regional economies, which enabled it to export to the US effectively through those markets. Are we likely to see the same gambit this time around?

Coulton: It looks to me as if that’s what [Washington is] trying to avoid, and they said that pretty explicitly in a lot of the documentation. Trump only paused the Rose Garden tariffs for 90 days, and he’s said this is an opportunity to negotiate. I am pretty sure, as part of that negotiation, the US will insist that countries do not allow China to open a load of factories in their backyards, start importing more from China, and then export more to the US.

GF: Is the Trump administration perhaps thinking along the lines that the US has got a stronger economy and will knock the Chinese down a few notches in a trade war? If that’s their intent, is it reasonable?

Coulton: I really can’t see that it would have any success at all in terms of gaining global market share for the US at the expense of China. The Chinese are pretty good at this. Look at the debate in Germany. Not only are the Chinese managing to make the stuff that Germany used to sell to them, but they have moved up the value added chain to such an extent that they are eating Germany’s lunch in third markets. It’s been a fairly subdued three to five years since the pandemic for global trade, but China’s exports have been doing really well. As the domestic property market in China has collapsed, they’ve reverted back to relying on exports to drive growth, and they’ve been quite successful at that. So I think it would be quite brave of the US if they really thought they could take on China and its export machine.

GF: Are we likely to see new alignments in the global trade landscape coming out of this tariff upheaval? Does the rest of the world continue to believe in multilateralism?

Coulton: My expectation is that there will be a bit of a rejuvenation of regionalism: countries outside the US looking to cooperate a bit more to offset the negative impact from what’s going on in the US.

There’s definitely a sense in Europe of, “The US is stepping back from the multilateral system, but we still value it,” and so they’re having conversations with China and Asia as frequently as possible. On the other hand, there is this kind of nervousness that China’s got all this export capacity, and suddenly their biggest market is kind of evaporating because of the tariffs—what are they going to do with all those exports?

So there’s this niggling worry about China dumping into the European market. And that maybe feeds into cooperation, because they want to make sure that doesn’t happen, or if it does, that they get something out of it in terms of more access into China. So it’s even more important for Europe to have these conversations.

But the other relevant point to your question is that, at the end of the day, global trade is about supply meeting demand. And the US has always been—and I think will continue to be—the world’s most important consumer market. That limits the scope for other blocs to trade with each other. You don’t trade for fun. You trade so the supply meets the demand. And if the demand is in the US, cooperation is going to be difficult.

And I think that’s true for a lot of East Asian manufacturing hubs. Ultimately, they’re all part of the global machine. It’s really all about the US consumer. The rest of the world is going to continue to be tied umbilically to the US, one way or another, if it doesn’t want to starve itself. It’s going to be hard to have this complete uncoupling.

GF: To what extent do you reckon this is the new normal? Even if we see the tariff situation easing, has the damage been done? Are we in a more negative long-term situation?

Coulton: For the duration of this administration, I think we are in a different world in terms of global trade; multilateralism doesn’t seem to be something they’re interested in at all. So it’s all about import substitution; building a stronger manufacturing base seems to be an absolute core part of what they are doing. When Trump talks about the “pauses” he’s announced, it’s all about the speed at which this can happen, rather than whether it will happen at all. In 2032, it’s hard to predict. But for this administration, it feels like this is quite a fundamental shift.

Kirk Konert:  It was a little surreal and unbelievable, watching the Blue Ghost softly land on the moon. Firefly is the first commercial company to have accomplished this feat. So therefore, AE Industrial is the only private equity firm with a portfolio company that has achieved this milestone. There’s a lot of pride on our team. Obviously, we’re not the engineers, but we have helped the company get to where it is today, and we’re excited to play a small part in that.

GF: Are we officially in the era of space privatization?

Konert: I believe so. We are now past the point of asking, “Is this an investable sector for private equity and private investment firms?” We were in this sector earlier than others, but now we’re seeing large blue chip buyout firms taking substantial bets on the space industry, like Advent International with their $6.4 billion acquisition of Maxar, and KKR’s acquisition of OHB SE, a German space and technology company, last year. People are starting to believe that there’s a real opportunity to invest capital. Competition for assets has increased, and that’s a great sign. It’s good to be part of a healthy ecosystem where you have larger buyout firms participating alongside middle market firms like ours.

GF: LPs are growing concerned about their lack of returns. What’s their reaction to potential returns from the space sector?

Konert: Initially, LPs were a little skeptical. They sort of looked at it as an industry that’s in too early of a stage, and riskier than your traditional buyout. So far, we’ve been able to show that’s not necessarily the case. The companies we’re investing in are underpinned by real demand, real contracts and real growth. That’s different than saying, “Hey, we’re investing in a venture company that could make a satellite that could do XYZ.” We’re investing in companies that are not dissimilar to other end markets we focus on, such as defense, aerospace and industrial services. It just happens to be that this is a sector that maybe had a stigma of being a little riskier. But we kind of view space as just another domain, and we’re investing in a way that aligns with what our LPs expect.

GF: How does that pitch go whenever an LP is skeptical?

Konert: We’re always speaking to our existing investors about how we’re spending their capital and managing risk versus return. And for new investors, we present case studies of what we’ve done. American Pacific Corporation, for example, is a specialty materials manufacturer for national security and space programs that we originally bought from a family and improved. We sold it to New Market Corp. last year for $700 million. We also point to Redwire. At the time, we made a picks-and-shovels play for this “space gold rush.” We predicted it would happen and [the IPO] was great for investors. So, we show those success stories and say, “Look, you might see headlines of a rocket blowing up… We’re not investing in that. We’re investing in technology that works.” Also, there’s additional value that investors don’t price into the space market—things like Blue Ghost landing on the moon. We didn’t price that in when we invested in the company. But that’s obviously a huge value creative event and we will benefit from that option value that we didn’t underwrite in our model.

GF: I understand you earned the name Captain Kirk because of your space expertise. What’s the backstory?

Konert: [Laughs] The backstory is maybe not as inspiring as you might think. We were investing in the supply chain for commercial aerospace and defense businesses; there was a space component to those assets. And we started to notice that SpaceX was a line item in our company and thought, “Is this something we want to focus on?” We started digging and saw similarities to what happened in aviation where flying was very expensive, but that cost curve came down substantially. And then asset manufacturing went up substantially. So, we wondered how we can invest in that embedded growth and take a deep dive into that industry. It’s been a decade-long experience to become experts in the sector. But we believe in the mission; it gets us out of bed every day to say we’re investing in technologies that matter for the long term, whether it’s for human exploration to Mars, or protecting critical infrastructure for national security.

GF: What are the key barriers of entry for a company like Firefly in a world where Musk dominates media reaction and SpaceX is mainstream?

Konert: You got to give credit to SpaceX for changing the game. It’s the reason why we can invest in the space sector, but there’s always room for other great companies to participate in the market. And I think Firefly is one of them. They serve a specific niche that SpaceX does not serve. And I think that’s how we view it. We can be complimentary to what SpaceX is doing. Their Falcon 9 is not a perfect rocket for the missions that Firefly’s Alpha should be serving. It’s similar to what we’ve seen in legacy businesses. We’re not going to go head-to-head with Lockheed Martin and develop an F35 [fighter jet]. We’re going to find mission areas around that where we can carve out a niche and hopefully grow the entire pie for everyone in the space market. So, I think that’s how we look at SpaceX. We will beat them in some areas.

GF: You already did.

Konert: We did. Healthy competition is good for the incumbent, or the dominant player. Without that, you create complacency and overall stagnation of the market. Great competition creates a bigger, better, healthier market. I think SpaceX welcomes that. Hopefully Elon views it the same way. I think he does based on his view of the world. SpaceX is good at making satellites for Starlink and for their constellation. But our portfolio company, York Space, is better at some mission areas than SpaceX. York is good at making satellites for missions that are more bespoke and custom for national security. That’s a different part of the market where we can both play. We’ll beat them in some places, and they’ll beat us in some places.

GF: Earlier this month, Firefly secured a US Defense Department contract for an on-orbit mission in 2027, but SpaceX benefits from receiving generous US government contracts. What are the roles that regulators play in this sector and is there room for a company like Firefly to score contracts as well?

Konert: Investing in space has a lot of tailwinds as it relates to the US. The pacing threat is China, which is, in some ways, beating us in some areas within the space market. The headlines are one thing. But if you look at the broader community, they’re saying we need to have more investment in space—period. SpaceX will have a role to play. So will other companies like Firefly and York. We think the best solution, the best technology and the best cost will ultimately win the day. From our standpoint, we see a lot of opportunity and we’re also going to continue to find commercial and other markets to play in that can be additional growth areas. So, we see it as a positive that space is so in the forefront of the Trump administration’s mind. There will be more contracts for SpaceX, but I think there’ll be more contracts for the industry overall.

GF: Are there other sectors besides space, like drones or AI, where similar growth is evident?

Kirk: This year, one of our space-related portfolio companies, Redwire, acquired a drone company called Edge Autonomy. Now they have both a low-Earth orbit satellite just above the atmosphere, plus a drone company that’ll operate just below that—full domain expertise within one company. Before that deal, AeroVironment, a major drone maker, bought a space- and defense-tech company called BlueHalo for $4.1 billion.

We have investments in both those areas and see a convergence of it all to some degree. AI is going to be part of every company. Going forward, if you don’t have an AI strategy, you’re probably going to lose. AI will be used for space exploration, too. We used AI for Blue Ghost’s moon landing, for example. It’s also a key component of how you invest in your own portfolio companies. Our strategy is to invest in companies that take AI models and use their domain expertise to apply those models to help the customer. What we’re not investing in is large language models. We’ll let Elon Musk and Sam Altman do that work. We’ll focus on taking their models to apply it to the problems we’re trying to solve in our core sectors.

Almuth Steinkühler: Looking back, the past few years have been incredibly dynamic and rewarding for SCHOTT Pharma as well as for me as a person. I would point out three distinct phases, each presenting its own unique challenges. Initially, it was all about laying the groundwork: establishing SCHOTT Pharma as an independent company with all its processes, structures, and new departments. The foundational work was crucial for our success.

After reaching this milestone, my focus shifted entirely to the process of going public and building a loyal and supportive investor base while taking our employees with us on this journey. I can tell you that our successful initial public offering [IPO] was a great achievement.

However, for a CFO, the real deal starts at day one after the listing day. From that moment on, the main challenge is achieving strong growth and margin expansion for our business: something we’ve been able to deliver on, especially in a challenging market environment.

GF: What has absorbed most of your energy over the last 12 months, and why?

Steinkühler: I’ve devoted the majority of my time and energy to managing SCHOTT Pharma’s first steps as a public company, which, as one would imagine, requires a lot of attention and strategic oversight. Together with my team, I focused on telling our equity story to investors and the public, ensuring that our vision and potential are clearly understood and appreciated.

At the same time, we managed a tremendous change process. We worked to build a strong commitment to our IPO internally, bridging information flows and adjusting to the new dynamics of being a publicly listed company.

GF: How important is it for you to have a top team, and what do you do to get it?

Steinkühler: A strong team is the most important factor in delivering consistent results. Being new to the public markets and building teams at the same time is not easy. But with the right spirit, it can work.

For me, it starts with hiring for attitude: finding people who have the ambition to improve processes and always keep an eye on the result. Then it continues with trust: giving them room to tap into their expertise and competencies while empowering them to take responsibility. We have many such people at SCHOTT Pharma and their commitment and dedication is what makes our success.

GF: How do you see artificial intelligence in finance evolving? How can AI be most useful?

Steinkühler: AI presents a tremendous opportunity in the field of finance, primarily because it facilitates the use and analysis of vast amounts of data. By making data easily accessible to a broad audience, AI empowers individuals to quickly extract valuable insights.

I believe this shift will transform finance from simply providing analyses to enabling others to work with data more effectively. Essentially, this will give us a more comprehensive understanding of the big picture and spark greater creativity. While it is crucial to ensure that data ownership and security remain top priorities, the benefits of AI will shape the future of finance.

GF: What keeps you up at night?

Steinkühler: I’m thinking about how to ensure the continued success and growth of SCHOTT Pharma, how to maintain the trust of investors and stakeholders, and how to navigate the complex market environment. But this is what makes me dream at night and motivates me for the day. We are very well positioned in an intact market with strong megatrends and have great prospects for the future. Therefore, we are ready and well underway to execute our strategy.

Marcia Hook: Under the Biden administration, we saw significant investments in the US energy space. The business was booming, there was a lot of excitement from a range of investors, and that was bolstered significantly by the incentives under the IRA [Inflation Reduction Act of 2022] and a number of other favorable economic factors.

Now we are in a place where what will happen with the IRA is unclear, which is undoubtedly one of the major drivers of the boom we saw over the last two years. A lot of people are waiting for the uncertainty to die down; because at the end of the day, the energy industry is one that thrives on certainty.

Investors make investment decisions on the timescale of decades, not years. And these investments are sometimes in the billions of dollars. Right now, we see a lot of folks—both investors in the US and investors abroad—essentially holding and waiting until they have a little bit more certainty on what will happen with the IRA in particular.

From a practical perspective, even if the administration were to try and do that, renewables may be the most realistic way to meet that demand in the needed time frame.

There’s a lot of excitement about, for example, SMRs [small modular reactors] and other types of nuclear units coming back online, potentially. But the permitting timeline and the deployment timeline for that is more like the end of this decade at best. So realistically, renewables are still the best answer. Solar is the fastest to deploy. People in the renewable space are still very bullish.

To be clear, there probably does have to be an all-of-the-above approach. We will need more gas-fired facilities as well. I’m not saying that those projects are not part of the solution; but certainly, even if the administration were to strip away all of the renewables credits, I don’t know that we’d see all of these projects just evaporate. There’s still the need, and they’re still the fastest solution.

Reeves-Sobers: It’s going to be a toolbox of solutions. It’s not going to be one-size-fits-all. In the meantime, I think the operators are taking it upon themselves to come up with other creative solutions to that problem.

GF: Other countries are not moving away from renewables and environmentally responsible projects. Is that likely to change?

Hook: Outside the US, we generally see a trend to continue pursuing renewable energy resources. That being said, I think that there are some practical constraints globally to meeting all of the new power needs through renewable energy. So, much like in the US, I think that there are some practical considerations that might drive countries to consider gas and even coal, in some cases, as part of the all-of-the-above strategy to get enough power in the time frame that’s needed. While we haven’t seen anyone specifically turn away from renewables, I suspect that it’s possible we’ll see an uptick in nonrenewable sources, just because of the practical need to provide so much power.

GF: Are we seeing an increase in interest in the nuclear industry?

Hook: There’s certainly an increased interest in nuclear power, both on the side of the administration and in the private sector; and we are seeing facilities that are discussing recommissioning or essentially coming out of retirement. The best known is the Microsoft-Three Mile Island deal, where Three Mile Island [a power plant near Middletown, Pennsylvania, that in 1979 was the scene of the worst commercial nuclear accident in the US] will be brought back online to serve the Microsoft [energy] load.

There’s a lot of excitement in the nuclear community right now. People are very bullish on it. There’s a lot of attention to SMRs as well. It will take some time to deploy nuclear; and as we heard reported about the Microsoft-TMI deal, it is a pricey resource to contract with. But these facilities run continuously for very long stretches of time without needing any maintenance, so it’s quite attractive.

GF: There is a lot of chit-chat about how law firms are using big data analysis and AI to make some of their corporate practices more efficient. What is your experience?

Reeves-Sobers: At least from an environmental perspective, the more information, the better, because it clears up some of the unknowns that come with environmental liability. And that’s always better when you’re thinking about an investment and whether you want to pull the trigger on any particular project.

Hook: More information is better; more data is better. I would point to two discrete impacts. One is being able to find potentially material issues for valuation purposes much more easily. And then, two, just the efficiency in doing so.

GF: How does the current climate affect M&A and consolidations, not just in the energy sector but in others? Do you see a freeze?

Hook: It’s an interesting time because there’s certainly still M&A activity going on. The expectation is that M&A activity will increase, because there will be market participants looking to exit various investments or projects that they were developing. The sense that I’ve gotten from speaking to folks in the industry is the expectation that it will be a buyer’s market, whereas maybe three years ago it was more of a seller’s market.

We do expect to see an uptick in M&A activity. I’m not quite sure what the timescale for that is, because we’re still seeing it. I don’t know that there’s been a significant uptick yet, but that is certainly the expectation.

Global Finance: Emirates NBD posted record profits in 2024. To what does it owe this success?

Shayne Nelson: Emirates NBD Group delivered a record-breaking financial performance in 2024, driven by a clear strategic focus, agile IT infrastructure, a strong balance sheet, and exceptional execution. This enabled the group to benefit from healthy economic growth across the United Arab Emirates [UAE]—our home market—and our international footprint.

Total assets grew by 16%, which, when coupled with increased transaction volumes, drove income above AED44 billion ($12 billion) and helped deliver a 15% surge in profit before tax to over AED27 billion ($7.3 billion) in 2024.

Through strategic investments in technology and people, we have elevated the customer experience while delivering outstanding financial results and a solid balance sheet that provides a solid foundation for future growth.

Nelson: We are delivering growth from many sources, including our expanded international network, our enhanced digital offering, and our broadened product offering.

The regional network is enabling us to capture more corporate business across the region. Saudi Arabia now accounts for 5% of total lending and delivered over 20% of loan growth in 2024, while our branches in India are successfully servicing Indian corporates with business interests across the Middle East.  

As the affluent population continues to grow in the UAE, we expanded our digital wealth offering onto ENBD X, our mobile banking app. We have also added many new products and useful features like fractional bonds, sukuks, equities, and mutual funds, and extended the platform onto Emirates Islamic’s digital banking app, making it the first Islamic bank in the region to offer this range of investment products via mobile banking. We are a data-first bank and are successfully harvesting data to identify opportunities to grow revenue and improve our customer experience. 

Finally, sustainable and transition finance remains a big opportunity for us and our customers. We are recognized as a regional leader in applying environmental, social, and governance principles (ESG), and our corporate and investment banks have supported customers throughout the region with landmark ESG-linked transactions and services.

GF: Tell us about your regional and international strategy. How are you building Emirates NBD outside the UAE?

Nelson: Our international expansion story is one of growth, diversification, and resilience. As the largest financial institution in Dubai and the region’s most profitable bank, we have leveraged our unique proposition to expand our footprint across the Middle East, North Africa, Turkey, and beyond. Our extensive branch network comprises nearly 850 branches across 12 countries. This impressive growth is a testament to our ability to capitalize on opportunities in key regional markets and our commitment to meet the evolving needs of customers globally.

We remain focused on international growth and diversification to drive value for our business and our stakeholders. Our international franchise delivered a 23% increase in lending in 2024 and our network of international branches in strategic markets remains one of our core competitive differentiators, offering enhanced connectivity to clients from the region and beyond.

In 2025, we continue to focus on leveraging our regional presence to capture global trade and capital flows. In addition, we will keep enhancing our wealth management platform and product offering to meet the needs of new and existing clients. We will also keep assessing potential growth opportunities across key markets to ensure we have a meaningful international presence.

GF: You are now a veteran with Emirates NBD. How do you see the bank evolving?

Nelson: This is my twelfth year with Emirates NBD, which has a very rich history spanning over six decades. The bank has played a pivotal role in supporting the economic growth of the UAE, our communities, and indeed the wider region. We have a clear vision, world-class information technology infrastructure, a strong brand, and a motivated, agile, and adaptive workforce. The banking industry has transformed immeasurably over the last decade. Emirates NBD has seized this opportunity with great success as we have transformed into a data-first, digital-focused banking powerhouse. We remain ideally positioned to benefit from future change across our footprint.