Balance of Power• May 5, 2026• 48:33Interview

29th Annual Milken Institute Global Conference Special: Day One | Balance of Power

From Balance of Power

Executive Summary

The escalating conflict between Iran and the US in the Strait of Hormuz is analyzed, with Iran responding to US operations by targeting the UAE, creating a prolonged crisis for global energy markets.
Activist investor Bill Ackman details Pershing Square's proposal to restructure Universal Music Group, including moving its stock listing from Amsterdam to the US to unlock value and installing a new board.
The episode explores the breakdown of traditional multilateralism, suggesting future international agreements will rely on 'coalitions of the willing' and highlighting the growing role of powers like China and Pakistan in regional diplomacy.
A significant food security crisis is emerging from the Hormuz conflict, disrupting fertilizer access and causing price shocks that prevent farmers in Africa and Latin America from planting crops.

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Concerns Raised

Military escalation in the Strait of Hormuz leading to a wider regional war.
Prolonged disruption to global energy supplies and supply chains.
An emerging global food crisis driven by fertilizer shortages.
The failure of traditional diplomacy and multilateral institutions to resolve major conflicts.
Anti-business political rhetoric and tax policies in major financial centers driving away capital.

Opportunities Identified

Value creation through corporate restructuring and relisting of undervalued companies like Universal Music Group.
Emerging diplomatic roles for non-Western powers like China and Pakistan in mediating regional conflicts.
Potential for new financial technologies to increase market access for the underbanked.

Key Themes

Geopolitical Flashpoint in the Strait of Hormuz

The discussion centers on the escalating military conflict between Iran, the US, and its regional allies. Iran's blockade and attacks on shipping are a direct response to US policy, creating a diplomatic stalemate with no clear endgame and significant risk of further escalation.

This conflict directly threatens a critical chokepoint for global oil and LNG shipments, impacting energy prices, supply chain stability, and international security.

Shareholder Activism and Corporate Value Creation

Bill Ackman's strategy for Universal Music Group serves as a case study in modern shareholder activism. The plan involves a US relisting, share cancellations, and a new board to address the stock's underperformance and unlock what Pershing Square sees as trapped value.

This illustrates how activist investors identify and attempt to rectify perceived corporate inefficiencies, and highlights the strategic importance of a company's listing location for its cost of capital and valuation.

The End of Consensus-Based Multilateralism

The analysis suggests that the old model of global governance through consensus-based institutions is failing. Instead, international problem-solving will increasingly depend on ad-hoc 'coalitions of the willing,' with non-Western powers like China and Pakistan taking on new diplomatic roles, such as mediating a potential Saudi-Iran deal.

This signals a fundamental shift in the global order, requiring businesses and governments to adapt to a more fragmented and transactional geopolitical landscape.

Urban Politics vs. Business Climate

The conversation touches on the political climate in New York City under Mayor Momdani, whose policies like a pied-à-terre tax are viewed as hostile to business leaders. This creates tension between populist social policies and the city's need to retain high-value taxpayers and corporations.

This explores the critical, and often fraught, relationship between local government policy and its ability to maintain a favorable environment for investment, talent, and economic growth.

The Geopolitics of Food and Energy Security

The conflict in the Middle East is shown to have cascading effects beyond energy, creating a severe crisis in fertilizer access. This leads to both price shocks and physical shortages, threatening agricultural output in developing nations and global food security.

This highlights the interconnectedness of geopolitical events with essential commodity markets, demonstrating how a regional military conflict can trigger a global food crisis and exacerbate inflation.

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Topics

Iran Strait of Hormuz US-Iran Relations Geopolitical Risk Energy Security Oil Prices OPEC Food Security Multilateralism Pershing Square Bill Ackman Universal Music Group Shareholder Activism Corporate Governance New York City Politics

Processed May 5, 2026 yt-dlp + mlx-whisper + Gemini

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