When Avenues: The World School opened in 2012 in Chelsea, it was supposed to revolutionize education. The for-profit school had a 215,000-square-foot, tech-heavy campus, and students partook in a dual-language curriculum with their choice of Spanish or Mandarin.

Founding families weighed in on everything from what language STEAM subjects should be taught in to whether the cafeteria pasta should be gluten-free. One mom who enrolled her 4-year-old that first year was floored when her son asked for water in Mandarin. And how many preschoolers could come back from a school visit to Chuck Close's gallery and talk about the artist's face blindness?

When one family rejected an admission offer, an Avenues cofounder, Alan Greenberg, wrote a letter urging them to reconsider. Greenberg wrote that Avenues would be "the most important new school ever opened."

"I don't in any way mean this to be demeaning," he added in an excerpt of the letter that was published in The New York Times. "But I would not be forthcoming or truthful if I did not say there is absolutely no comparison."

Thirteen years later, Avenues has had seven different heads of school, including one whose tenure lasted two months. After once talking of building 20 campuses around the world, it ended up with three. In November 2023, the school's two profitable campuses, Manhattan and São Paulo, were sold to Nord Anglia Education, a private-equity-backed chain of for-profit international boarding schools. It was the third time the school had been sold.

While some parents sang Avenues' praises, many told Business Insider they'd been disappointed by what they had come to view as essentially an educational experiment gone awry. They said the focus on dual-language learning came at the expense of core subjects. Parents of older students lamented what they viewed as a lack of structure and said kids weren't penalized for not doing their homework.

"Your kids are kind of like the guinea pigs for this growth model," said one mom who enrolled her 2-year-old son at Avenues before the pandemic. In 2023, after four years at the school, she pulled him out. Having him learn Mandarin without a native-speaking nanny or heavy tutoring was increasingly unfeasible, she said.

This year, close to 2,000 students are enrolled at Avenues' Chelsea campus, where tuition for nursery school starts at $68,850 — among the highest in the city.

Avenues' head of school, Todd Shy, told BI in a statement: "We have thousands of happy, satisfied families and thriving students. Avenues is an innovative school that achieves exceptional student outcomes using research-backed practices." An Avenues spokesperson added that in the school's annual "voice of the community" survey, 90% of parents "agreed that Avenues is an enjoyable school for their family" and more than 90% were happy with the college their child ultimately attended.

Chris Whittle, an Avenues cofounder and former CEO, told BI he was "really proud of how the school has done." But some people said Avenues had failed to achieve an impossible vision.

"A for-profit school with great tech support and dual-language programs seems pretty sexy," Wendy Levey, an admissions consultant, said. "But if people are going to spend that kind of money, they want faculty that have been in place for a long time, a curriculum that has been proven to work, alumni who are attached to the school. They want the whole nine yards."

In short, they want to be part of the "club" — the loosely affiliated network of girls, boys, and co-ed schools that make up the city's educational elite. "Even now," Levey added, "Avenues is not part of that club."

If you're a New York City parent in a certain income bracket who has deemed public school a nonstarter, chances are you're familiar with the hellscape that is trying to get your kid into private school. The search for a competitive preschool often starts when your child is just a year old. By the time you get to primary school, it seems as though all but one open spot is reserved for siblings and legacies.

If you do manage to land at Horace Mann, Spence, or one of the other elite nonprofit private schools that some admissions professionals call the "big 20," you're so grateful that you tolerate the incessant fundraising emails for the early-learning center that won't be built until your child is too old to use it. You tell yourself that the dingy basement where you deposit your toddler each morning is quaint, cozy, and traditional.

In an increasingly high-end city, private school remains a remarkably spartan affair. If there are elevators on campus, students are often forbidden to use them until senior year. Children served by macrobiotic chefs at their Hamptons summer homes push beat-up plastic trays down a poorly lit cafeteria line.

It was amid this landscape that Avenues burst onto the scene. Whittle, a former Esquire publisher who'd turned — somewhat controversially — to for-profit education, imagined a sleek, newfangled school with a global mindset. Graduates would be "artists no matter their field," "at ease beyond borders," and "architects of lives that ascend the ordinary," Avenues' mission statement said.

Whittle and his two cofounders — Benno Schmidt, a former Yale president, and Greenberg, who used to be the publisher of Esquire — spent a lot of time and money selling their idea. Avenues hired a marketing team that included an MTV animator and Ken Segall, who conceived of Apple's famous "Think Different" campaign. They sent a direct-mailer brick to 1,000 New York City parents and threw swanky cocktail parties at the Crosby Street Hotel.

Even parents who snickered at the school's tactics showed up to see what all the fuss was about. "The idea was, let's make it feel like we've been there forever and you just found out about us," the former Avenues global creative director Andy Clayman said.

Whittle had made a career commoditizing education. In the 1990s, he conceived of The Edison Project, a network of commercial private schools that eventually transitioned into managing low-income public schools in cities such as Baltimore and Philadelphia. In 2003, Liberty Partners bought The Edison Project for $174 million. A decade later, Liberty sold the company, reportedly taking an 85% loss.

Avenues embodied the same premise as Edison: namely, that innovative business people could educate students better than traditional nonprofit schools. At the time, this was a welcome philosophy in New York City. During Mike Bloomberg's 12 years as mayor, nearly 200 "low-performing" public schools were closed, replaced by 150 privately operated, publicly funded charter schools. As much as 40% of the city was rezoned to accommodate mixed-use development, paving the way for Avenues' flagship campus in a converted industrial building sandwiched between public housing and the High Line, the elevated park that runs through Manhattan's Chelsea neighborhood.

Avenues' for-profit status was appealing to what one Avenues parent, Euan Rellie, called a "certain kind of Bloombergian New Yorker." "You can imagine if you're an entrepreneur or private-equity guy, you might say, good, there's less bullshit," said Rellie, who cofounded the private-equity firm BDA Partners. "This is just a straightforward service provider."

Sejal Shah enrolled both her daughters after touring the school in 2012. "It seemed like a place to move and grow versus being stagnant in one way of thinking and one way of doing things," she said.

Avenues' timing couldn't have been better. From 2006 to 2011, the number of kids younger than 5 in Manhattan had increased by 32%, Whittle told The New York Times, while only about 400 spots at top independent schools had emerged over the past decade. According to the Times, by June 2011, 1,200 families had applied for early admission to Avenues, even though just eight of 180 teachers had been hired, the building was a construction site, and the curriculum was still a giant question mark.

Avenues hired academic heavy hitters like Nancy Schulman, the former director of the 92nd Street Y preschool, one of the city's most prestigious private-school feeders, as well as a former Dalton headmaster, Gardner P. Dunnan. Still, Whittle made clear that he had no interest in being another Dalton. "To me, the biggest risk is that we are just another fine school," he told The New York Observer in 2012. "If that's all we are, this was a waste of time."

Whittle's run at Avenues was relatively short-lived. In 2013, John Fisher — the conservative Gap Inc. heir whose family gave The Edison Project $25 million and who was an early minority investor in Avenues — bought out one of the school's two main backers. "It was a hostile takeover in that I fought it, and I lost," said Whittle, who also placed a bid at the time.

Fisher tapped Jeff Clark as the new president of Avenues in November 2013, the change briefly mentioned at the end of Whittle's annual newsletter. The Avenues spokesperson said the school didn't make a big deal about the appointment to parents because it "in no way impacted day-to-day operations."

That same year, the school's parent company, Avenues Global Holdings, loaned Whittle almost $11 million that a 2018 legal document said was meant to "ameliorate his dire personal financial situation so he could focus on his work for Avenues." (A person close to the company said the loans had nothing to do with purported financial struggles.) Whittle got an additional $1 million in 2014, but he ultimately failed to pay back the entirety of the loan.

In February 2015, Whittle left the school. Two years later, the parent company sued him and foreclosed on his Hamptons home. In 2018, Fisher bought out the last minority investor, gaining full control of Avenues.

The typical New York City private school grows incrementally. Nightingale, Spence, and Chapin began in Manhattan brownstones and expanded over decades, one capital campaign and Ivy League acceptance at a time. Whittle, on the other hand, raised $75 million to renovate Avenues' Chelsea campus in just three years.

The facility embodied Whittle's idea of education as a luxury good. The cafeteria is named "FOOD" after the SoHo restaurant founded by the artist Gordon Matta-Clark, and Avenues students in first through fifth grade receive iPads to do their schoolwork. There is no central library; Whittle told New York magazine in 2012 that his eventual goal was to have a paperless campus.

Many parents were drawn to Avenues' modern approach to elite academia. Instead of the pinafores and khakis favored by private institutions like Brearley or Collegiate, students wear a mix of gray, black, or white solids. There's an emphasis on boardroom-style presentations and group projects, rather than teacher-led lectures, essays, or written exams.

"If you attended the first year, you drank the Kool-Aid," said a mother who enrolled her 4-year-old son at Avenues in 2012. "Why would you choose an unknown entity for top dollar with no proven track record? You had to believe in something bigger." Another mother, who transferred her daughter out of Avenues in 2023 after her freshman year, called the early years there "magical," adding, "These kids would run with smiles into school."

The school's biggest academic selling point has always been its language immersion program. Originally, 2-year-olds at Avenues were taught in a combination of English, Spanish, and Mandarin. When students entered the threes program, they chose Mandarin or Spanish as their target language and spent half their time learning in that language. For instance, after a bilingual morning meeting, students might do a small-group reading in Mandarin, followed by another learning period in English. Science would then be in English, with music and art taught in Mandarin. (Beginning next year, based on parent feedback, kids will choose a target language at age 1, the Avenues spokesperson said.)

In first through fifth grades, subjects like language arts and math switch between English and Spanish or Mandarin on alternating days. By sixth grade, the dual-language component tapers off because, in theory, students are highly proficient.

For some, the bilingual program turned out to be more than they'd bargained for. One mother told BI that by the end of her son's first year in Avenues' twos program in 2019, she began receiving feedback from the school that he needed additional support to learn Mandarin. "They were telling us to get him a tutor and potentially a Mandarin-speaking babysitter," she said. "We started realizing that it's not practically possible."

At one point, the mother said, Avenues suggested that she take her son to occupational therapy for behavioral issues that she felt stemmed from the immersion program's rigor. "It just felt like we had to outsource everything," she said. Last year, she transferred her son to a traditional nonprofit school for first grade where she said he's thriving.

The Avenues spokesperson said that "while some families may choose additional support outside of school, this is not required nor expected at Avenues" and is discouraged in early years.

The mother who enrolled her 4-year-old son at Avenues the year it opened said she started noticing in elementary school that her son's basic reading and writing skills paled in comparison with his Mandarin. She also became exceedingly frustrated that he completed assignments mainly on his school-provided iPad.

For all the hype around Avenues, "I was just not impressed with it as an academic institution," the mom said. She decided to transfer her son out for eighth grade.

The Avenues spokesperson said that learning in two languages "does not detract from what children need developmentally" and that the school's language immersion program had "been designed to maintain literacy development." The spokesperson separately said that Avenues graduates were "thriving at leading colleges and universities." From 2016 to 2024, four went on to attend Harvard, four went to Yale, and one student attended Princeton, according to Avenues' website.

Not all parents or even teachers are convinced of the efficacy of Avenues' methods. One teacher who worked at the Chelsea school for a year prior to COVID said she noticed a skills gap between her Avenues lower-school students and those at the nonprofit private school where she now teaches. She believed Avenues students' writing suffered because they learned in English only half the time. The Avenues spokesperson said they did not recognize the teacher's characterization.

Multiple former Avenues parents also told BI that while they bought into the school's modernistic approach to education, they grew concerned that it was becoming too loose. One mother said that when her daughter entered middle school in 2019, Avenues "tried to teach math three different ways at one time," confusing her preteen, who didn't know which method to use.

The mother who transferred her daughter out of Avenues during high school expressed similar reservations. She told BI that in middle school, her daughter was surprised to learn from a friend at an uptown private school that they got in trouble for not doing their homework. There was so little communication between parents and teachers, the mother said, that one year she didn't learn her daughter was struggling academically until January. (The spokesperson said that if a student doesn't complete their homework, a teacher might pull them aside to "talk about the importance of personal accountability." The spokesperson added that "student progress is carefully monitored through regular formal and informal assessments" that are reported to and discussed with parents.)

No school, no matter how lauded, can be perfect for every student. One mother recently transferred her daughter from Avenues to a more traditional private school for sixth grade. While at Avenues, she'd suspected her daughter might be behind her peers at other private schools, but she was willing to make the trade-off for a kid who was fluent in Spanish, tech-savvy, and a confident public speaker. "Then I came here, and she was literally almost three years behind in math," the mom said. "In English, she was getting tested on adverbs and pronouns, and she knew none of them."

Avenues "really honed in on skills that you need for the future," the mother said, "but not the basics of education. But who knows if the basics of education are even necessary 10 years from now."

Avenues had always planned to build a global network of schools, a former administrator told BI, pointing to its robust research and development team, which totaled 30 full- and part-time staffers by 2019. But in the end, Avenues ended up with only three campuses: in Shenzhen, China; Sao Pãolo, Brazil; and New York City. A temporary Silicon Valley location served 70 students during the 2022-2023 school year.

When Fisher decided to sell the business, the goal was to find a buyer to purchase the whole thing. "And that didn't happen," the former administrator said. "Did they make mistakes? Hell yeah," and "their mistakes cost them their vision," she added.

While the former administrator called the dissolution of that vision "heartbreaking," she believes the new ownership will bring "real stability." A Nord Anglia spokesperson said the group chose to purchase Avenues' Chelsea and São Paulo campuses in part because of a "close cultural fit between us as educators." Plans to build a permanent Silicon Valley location were scrapped after the Nord Anglia acquisition, and Avenues Shenzhen is now independently owned and operated by a local partner in China, which licenses the Avenues brand.

"I did have some parents reach out to me after the sale," Whittle said. "And I think overall, it is going to be quite good for Avenues. They're a capable, thoughtful group. They have global reach, which I think is important to the student body."

In October, Nord Anglia itself was sold to a new ownership group, which could theoretically shift things at Avenues again. Avenues' spokesperson said that, despite the changes, "our focus has been — and always will be — on our students and providing a world-class education."

Meanwhile, the school has taken steps to appeal to a broader swath of families. In the early days, students hoping to transfer into Avenues from first to fifth grade had to pass a Spanish or Mandarin competency exam. But in 2017, Avenues launched a pilot English-only program for incoming fifth graders that gradually expanded to include the third and fourth grades. This past school year, 33 students enrolled at Avenues were non-immersion, the spokesperson said, adding that the school would be willing to add more English-only lower-school spots if parents asked.

Some parents see Avenues' flexibility as a plus. "If you don't like change, Avenues is not the right place for you," said Lynn Berney, who has two children in high school and one who recently graduated. "But I do think that they're constantly improving themselves."

Rellie's younger son, who's now a senior, is staying put. "Being the parent of a teenager is such an effing roller coaster," he said, that "you tend to muddle through until there's a crisis."

Avenues says its enrollment has remained consistent. The spokesperson told BI that applications to its New York campus increased by 50% from September 2018 to September 2023, while the acceptance rate fell by 18%. They added that 2024's admissions rate was about 5% lower than 2023's, "which indicates continued strong demand for limited seats."

Avenues may not have become exactly what Whittle imagined. Depending on whom you ask, it might not even be a particularly successful academic institution. "It's a consultant-created conceit," said the mother whose son struggled to keep up with the Mandarin component. "The shots are called at corporate."

But the school succeeded in at least one way. "We did the impossible thing: We were profitable," said Clayman, the former Avenues global creative director. "This is why we were bought."

• Some celebrity-led production companies struggled in 2024 as Hollywood cut spending.
• Investments by firms like Blackstone and RedBird were hampered by market shifts.
• Despite headwinds, companies like LuckyChap could thrive by diversifying beyond their famous founders.

2024 was a bad year for the TV and film business — and was particularly hard for a set of celebrity-backed production companies that previously raised large amounts of capital at eye-popping valuations.

Private equity firms like Blackstone and RedBird Capital Partners poured a lot of money into celebrity-led production companies, making notable deals in 2021 to back roll-up Candle Media and LeBron James' SpringHill, respectively. The bet was that their star power would give them a head start in a crowded market and that streamers' appetite for filmed entertainment would continue to rise.

The investment boom drove a celebrity production company bubble, said Paul Hardart, who directs the entertainment, media, and technology program at NYU's Stern business school.

"The prices they were garnering were probably bigger than the market could hold," he said. "The Candle thesis was, we'll buy all this content, we'll roll them up and sell them to the streamers. But the scale they put into it wasn't justified."

The cracks in the investment thesis started to show when streamers pulled back on spending, and production was hampered by the 2023 labor strikes.

Reese Witherspoon's Hello Sunshine fell far short of its profit expectations in 2023, leading parent Candle Media co-CEO Kevin Mayer to admit they "paid at the top of the market." Candle Media — which restructured its businesses in 2024 to cut costs — had invested $500 million in the company as part of a Blackstone-backed roll-up strategy.

2024 was grim for many in Hollywood, with new TV series orders down 42% from their peak in mid-2022, per Ampere Analysis. The year brought more damage to some celebrity-backed outfits. These companies don't have big content libraries and usually depend on streamers' fees. That has meant they've acutely felt the pain when streamers started ordering fewer shows.

Will and Jada Pinkett Smith's Westbrook Inc. laid off staff in early 2024 and restructured after struggling to get major deals following The Slap episode of 2022, Semafor reported.

James' company, SpringHill, in late 2024 agreed to merge with Fulwell 73, the British TV, film, and music production company behind shows including "The Kardashians" and "Carpool Karaoke," after losing $45 million from 2022 to 2023, Bloomberg reported. SpringHill had been one biggest fundraisers in the athlete-entertainer space and was valued at $725 million in 2021 after a funding round led by RedBird. The combined company didn't release a new valuation.

One media investor said at least one celebrity-led company struggled to raise funds this past year because its reliance on a famous face gave potential backers cold feet. This person asked for anonymity to protect business relationships; their identity is known to Business Insider.

Which companies will survive and why

Some industry insiders say the celebrity production companies with staying power will be the ones that move beyond their famous backers. Celebrity founders can't star in everything, after all.

Kevin Hart's Hartbeat has expanded beyond projects starring Hart with its development slate. The company also had someone take over as CEO from Hart, who was leading it after its last chief exec left.

Dwayne Johnson's company, Seven Bucks Productions, is looking beyond Johnson's persona for success and making a doc about the comedian Andy Kaufman.

One favorite around town is Margot Robbie's LuckyChap, which has raised no money and just got a big film deal with Warner Bros. after its success with the Robbie-starring "Barbie." But it's produced other hits that don't feature her at all, like "Saltburn" and "My Old Ass," which stars Aubrey Plaza.

Another is Brownstone Productions, the company founded by Elizabeth Banks and Max Handelman, which is behind recent hits "Cocaine Bear" and "Bottoms."

"The key is to develop things they don't have to be in," said a second investor, who also asked for anonymity to protect business relationships. "You can only be in so many things."

Two of the largest palm oil plantations in Peru are located on the west side of the Ucayali River, which flows from the Andes to the Amazon. From above, the surrounding landscape looks like stirred paint: a swirl of green amid inky lakes and brown rivers. Tibecocha, the larger of the two plantations, appears to have been etched into the jungle with a ruler and a straight razor. Its rectangular grid of roads extends over almost 8 miles and contains a million palm trees. The smaller property, Zanja Seca, is nearly the size of Manhattan.

Each year, these plantations generate about $50 million in revenue for the Ocho Sur group, whose palm oil has ended up in products ranging from Cheetos to Colgate toothpaste. The $160 million that the company's backers, primarily US venture capitalists and private equity funds, have spent on its operations represents the largest foreign investment in agriculture in the history of the Peruvian Amazon.

The palm industry got off the ground here thanks to US development programs designed to give farmers a money-making alternative to growing coca plants, the precursor to cocaine, and the US ambassador to Peru even paid a visit to Ocho Sur's properties last year. Ocho Sur's operations are now so vast, and it is such a dominant force in the region's economy, that locals refer to it simply as la empresa — "the company."

But the creation of the plantations came at a steep price. To make way for those industrial fields of palm trees, some 30,000 acres of rainforest were cut down, a swath of destruction that one Indigenous leader called an act of "eco-genocide." Biologists from Chicago's Field Museum have ranked the rugged mountains that rise west of the plantations "among the most diverse of all conservation areas in Peru." When the museum's team surveyed the region for three weeks in 2000, it tallied 1,600 species of plants, 71 species of mammals, and more than 500 species of birds. At least 28 species were new to science.

Since the 1960s, more than 13% of the original Amazonian rainforest has been cleared. Most of the destruction has been concentrated in Brazil, but Peru is second on the list. If the destruction continues, Thomas Lovejoy, a former biodiversity advisor to the World Bank, has argued that the Amazon could reach a tipping point and become too hot, dry, and fire-prone to remain a rainforest. Without the carbon-absorbing capacity of the Amazon, the world would face increasing temperatures and melting the ice caps, making cities as far away as Mumbai virtually unlivable.

Seeking to be a model of sustainable development, Ocho Sur has signed pacts with local communities to conserve the native ecosystem, and its polished English-language website features a slideshow of anteaters, sloths, and monkeys. The company has replaced its trucks and tractors with mules and water buffalo and has vowed not to expand its operations into standing forest. Over the past two years, Ocho Sur says, it has spent $3 million maintaining roads and building schools and medical clinics.

When the company's CEO, Michael Spoor, who joined Ocho Sur in 2019, talks about the company's accomplishments, he draws a sharp line between the Ocho Sur Group and whoever it was who first staked a claim in the virgin territory. "We came to Peru in 2016 and bought two farms in Ucayali at a public auction," he has said. "All that we have done, we have done without deforesting anything."

Documents I obtained from a criminal investigation into Ocho Sur — along with an exclusive trove of internal company emails, bank records, and spreadsheets covering eight years of plantation operations — tell a more complex story about the role of the company's founders in the original destruction of the rainforest. At its heart is an American businessman named Dennis Melka, who a Peruvian prosecutor has claimed is the ringleader of a "criminal organization" that passed mature plantations from one company his investors had bankrolled, United Oils, onto a second, Ocho Sur. After the transfer, I found, key personnel from United Oils remained in place — including Melka. Most importantly, prosecutors say that United Oils illegally cleared much of the plantation land, and that Ocho Sur, for all of its sustainable initiatives, is in many respects the same entity as its clear-cutting predecessor. Melka has not responded publicly to the prosecutors' allegations and did not respond to requests for comment.

Ocho Sur's links to deforestation have profound implications for businesses, consumers, and the environment — and what exactly counts as "sustainability" in the palm oil industry. The global market for palm oil, valued at more than $70 billion last year, is experiencing steady growth, driven by its use in products as varied as food, beverages, biofuels, and cosmetics. Last year, the European Union passed new regulations on deforestation that promised to be the strictest in the world. Companies like Ocho Sur are now racing to demonstrate that their plantations were not illegally deforested — or risk losing their share of the lucrative market. But it may not be that easy.

"Nearly everything they export has been illegally produced," Julia Urrunaga, who leads research in Peru for a Washington, DC-based environmental organization, argues. "What needs to happen here is they need to be sanctioned, and they need to be ordered to reforest and leave."

In April, Michael Spoor invited me to spend a few days visiting Ocho Sur's plantations and the surrounding communities. The company was losing buyers left and right. That month, PepsiCo, which had used Ocho Sur palm oil in its Cheetos and Doritos, became the latest global brand to be named in the media over the historic deforestation. Spoor was eager to tell his side of the story.

The company's headquarters are on the fifth floor of the Wyndham hotel in the regional capital of Pucallpa, a city of 300,000 on the banks of the Ucayali River. When I met Spoor in the lobby one morning, he was wearing what passes for executive attire in these parts: a loose nylon shirt, khaki pants, and hiking boots. He looked more like a tourist heading off to hike the ruins of Machu Picchu than the head of a palm oil empire.

The son of a Protestant minister in Iowa, Spoor earned a degree in civil engineering before working for Exxon and leading companies that recycled spent oils and other industrial waste. One of his operations, NewStream, which Spoor ran from 2008 to 2014, was accused by the Massachusetts attorney general of illegally dumping wastewater tainted with lead, chromium, and other hazardous chemicals into a municipal treatment facility that flows into the Ten Mile River. In April 2014, Spoor signed a consent decree on behalf of NewStream to settle the case and the company paid a fine; he has denied that NewStream released any hazardous waste. Two months later, he headed to Latin America. His first stop was Mexico, to run another waste recycler. Then, in 2019, he joined Ocho Sur to oversee a different kind of cleanup.

Before accepting the position, Spoor visited the plantations with one of Ocho Sur's shareholders. He marveled at the efficiency of the African oil palm, which can produce five times as much edible oil per acre as corn or soy. Every 10 days, each tree develops a 50-pound cluster of fruits oozing with thick, red oil. They will keep producing for the next 20 years. The catch is that oil palm can be profitably grown only within 10 degrees of the equator, a region that overlaps with the planet's most biodiverse ecosystems.

As environmental activists raised the alarm about the palm oil industry's toll on the tropical forests of Southeast Asia two decades ago, Unilever, the world's largest buyer of palm oil, teamed up with the World Wildlife Fund and other parties to establish the Roundtable on Sustainable Palm Oil. The roundtable launched a program in 2007 that certifies growers whose plantations are not on recently deforested or contested lands. Only a fifth of palm oil sold across the globe was certified by 2022. Spoor's mission was to get Ocho Sur's crop certified as deforestation-free, but exactly what that means depends on when you start the clock.

Spoor and I headed out of Pucallpa in a four-wheel-drive truck driven by Krassimir Doldourov, a chain-smoking Bulgarian who oversees the plantation's road maintenance work. After an hour, Doldourov swung onto a dirt road with tire-swallowing holes. We passed abandoned farms, cattle pastures, and stray dogs, but not much forest. Finally, Doldourov maneuvered the truck down the scoured bank of a large, brown river, a tributary to the Ucayali, and onto the platform of Ocho Sur's pontoon-style ferry, powered by two outboard motors.

On the other side of the river, we passed a series of signs Spoor had installed when he took the job. "We work in harmony with nature," read one. "We protect wildlife," read another. "We conserve forests," read a third.

As Spoor pointed out, most deforestation in the Peruvian Amazon today comes at the hands of small-scale farmers, and he wanted to convince me that industrial agriculture, which had deepened climate impacts elsewhere, could achieve the opposite here. Ocho Sur is the largest formal employer in the Department of Ucayali and accounts for about half of its exports, meaning that it provides economic opportunities to thousands of people who might otherwise be clearing forest for cattle or short-lived crops like banana or cassava. Oil palm, as he rightly noted, can sequester more carbon than such annual crops, though studies have found it absorbs less than half that of a standing forest. "It's a permanent crop that's going to grow for decades and decades and decades," he said.

"What is it that people are going to do here in the jungle?" Doldourov asked. "They are going to grow coca."

In Spoor's view, only sustained investment could lead to the cultivation of valuable crops like oil palm on all the degraded land we had passed. If not, he said, settlers will keep clearing primary forest and abandoning the spent land a few years later. Fighting this migratory agriculture was one of the goals of Peru's National Plan to Promote Oil Palm, enacted in 2000, which helped attract the company's investors to the region over a decade ago. "Those plantations, 20 years from now, will be the greenest areas in the whole zone," Spoor said. "People are going to look back and go, 'Wow, look at those two islands of green!' and, in some weird way, that will have been the result of what we started."

To dig deeper into the origins of Ocho Sur's plantations, I flew north to the jungle city of Iquitos to meet with William Park, a self-described "eco-social entrepreneur" from Bronxville, New York. Over an açai bowl at the Dawn on the Amazon Café, a favorite spot for travelers and expats, Park relayed his life story. He had served in the Marine Corps and earned a biology degree in college, but a childhood meeting with the founder of the organic food company Arrowhead Mills shaped his unconventional path. After a job running sales for a hemp apparel company, he lit out for Peru, where he launched Eco Ola, an export business in Amazonian superfoods, with the goal of helping local communities develop sustainable economies from their native forests. Operating between two worlds — conservation and business — made him particularly suited to recognize what had unfolded here on the Amazon River back in June 2013.

One day, Park was sitting on this same patio when he heard troubling news from a friend who lived upriver in Tamshiyacu, an isolated village on the edge of an uninterrupted swath of rainforest that stretched for hundreds of miles. The region, which is believed to have the world's greatest concentration of uncontacted Indigenous groups, is also home to several threatened species, including the bald-headed uakari monkey. "It's a vitally important area," Park said. Now, according to Park's friend, a massive palm oil plantation was springing up in the area. Workers had been conducting surveys and slashing paths with machetes.

Initially, Park was skeptical. He often heard rumors of new megaprojects, but they usually fell apart before they got off the ground or turned out to be scams. Tamshiyacu seemed too remote to be worth anyone's while, he thought.

He was wrong. Before long, workers showed up there with two dozen bulldozers and excavators. They proceeded east, widening and grading a dirt road for some 6 miles until they reached their destination. "Clearcutting happening now, the neighboring communities are not happy," Park wrote to an environmentalist he knew. "The name of the company and its international affiliations are not known but it is rumored to be a Malaysian company."

His email eventually landed in the inbox of Matt Finer, a scientist then with the Center for International Environmental Law in Washington, DC. Finer hunted for satellite images to confirm the devastation, while other environmentalists followed a paper trail to figure out who was behind the operation. Julia Urrunaga, who works as a researcher with the Environmental Investigation Agency tracking deforestation in the region, discovered a network of companies recently registered in the region. First, she found "Plantaciones de Loreto" based in Iquitos, then "Plantaciones de Ucayali." Ultimately, she unearthed more than two dozen interrelated companies. Like a series of nesting dolls, six of these companies were owned by two shell companies in the British Virgin Islands, which were in turn owned by a Cayman Islands-based company called United Oils Limited. This corporate labyrinth obscured the true shareholders and decision-makers, but one figure stood out in the records: Dennis Melka.

In business records Urrunaga obtained and recently shared with me, Melka is the only one authorized by each of these entities to approve payments for "an unlimited amount."

Melka, Urrunaga learned, was a venture capitalist who had made his name developing palm oil plantations on Borneo, but she couldn't find much detail about his plans for Peru, or even what crops he planned to grow. Images online showed a sharply dressed man in his late 30s with a bald head and blue eyes.

Finer, meanwhile, got his hands on the first clear satellite images showing strips of bare, red earth in the forest as the Tamshiyacu plantation took shape. Finer notified a journalist at the local newspaper, La Región, and a photograph of the naked landscape ended up on the front page. "Where is the environmental prosecutor?" the paper asked.

They didn't yet know that Melka's clearing and planting was already further along in Ucayali.

When I first heard about Melka's role in these events some years ago, I tried to talk to him in person at a conference in San Francisco. He was in his element, pitching investors, and looked relaxed in jeans and a blazer as he handed me his business card in a hotel banquet hall. He would be flying to Peru a few days later. When I started to ask about the deforestation allegations against him, his face grew tense, and he waved me away. "I created thousands of jobs in Peru," he said. "Leave me alone."

From what I learned without his cooperation, Melka grew up in Marin County, California, and his first job out of college was at Credit Suisse in New York. After postings in London and Prague, he found his niche in the free-market mecca of Singapore, where he set up his own venture capital fund in 2006.

In those days, palm oil was booming on Borneo, a 90-minute flight to the east. "When I started meeting the companies and talking to them, I realized this was a phenomenal business," Melka later told a Singaporean publication. "That's something I want to get into."

His biggest problem was that most available land on Borneo and other parts of Indonesia and Malaysia was controlled by Indigenous people or held in state forestry concessions. "Without special connections within the government, you won't be able to secure this land," a former Melka employee told me. Melka soon made those connections through a business partner, Graeme Iain Brown, whose father-in-law, according to an industry report, was a former Indonesian cabinet minister.

In 2009, Melka and his partners founded a company called Asian Plantations that obtained 50,000 acres of rainforest through what the company called "non-competitive" negotiations based on "long standing local relationships." They proceeded to clear-cut their land and plant oil palm, according to satellite analyses conducted by the Environmental Investigation Agency. Six years later, as a member of the Roundtable on Sustainable Palm Oil, they sold that operation to Felda Global Ventures, the third-largest palm oil company in the world, for almost $200 million. (Brown told me the notions that they had deforested any land or benefitted from family connections were "totally false.")

Malaysia and Indonesia dominated global palm oil production at the time, but usable land was predicted to run out by the end of the decade and Melka was already on the hunt for new territory. Company emails show that he reached out to government officials in the newly created country of South Sudan and in Myanmar, which was just opening for business after emerging from a military dictatorship. But Peru topped his list.

Under President Alan García, Peru was welcoming foreign investors with open arms. Not only was García's government offering sweetheart deals to foreign investors under its National Plan to Promote Oil Palm, but the country had more than 3 million acres suitable for oil palm. "Tax free at all levels!" Melka raved in an email to a London-based investment advisor. "Labor costs at US$11.50 per day. . . !" And, unlike in much of Southeast Asia, Peru allowed foreigners to own plantations outright. Palm oil, as he put it in his pitch, was "the most profitable crop that humans can grow outside of narcotics."

It was more than a clever line.

Over the past 30 years, the rise of the palm oil industry in Peru has been directly stimulated by the United Nations and by the US Agency for International Development, which has spent hundreds of millions of dollars there funding organizations that work to redirect coca farmers toward alternative crops. The first oil palm project, spearheaded by the United Nations Office on Drugs and Crime in 1991, helped 270 families in Ucayali — largely refugees fleeing Shining Path guerillas — to establish 3,000 acres of oil palm along a highway near Pucallpa. The United States later financed a mill that would be run by a farmer cooperative.

Rolf Wachholtz, an economist hired to evaluate one of the UN's coca-eradication programs in 2010, praised it for improving the livelihoods of farmers but stressed that the UN needed to "focus more on environmental issues," including deforestation.

Melka worked to take full advantage of the government aid. After making connections with diplomats and development agencies in multiple countries, he was even hired by USAID to provide a financier's perspective on its work in Peru. "The Peruvian industry needs scale," he said in a draft report he prepared in 2010. "All UN & USAID efforts should be focused on growing the productive resource and planting land."

That November, he repeated the theme when he gave a talk in Lima organized by the UN, along with his business partner Bill Randall, the managing director of Pacific Agri Capital, a private equity firm that Melka founded in 2008 to fund his Malaysian plantations. Peru still had only 100,000 acres of palm under cultivation, and Melka was seeking to triple that number, according to a documentary film, "The King of Cocaland." "He could impress anybody," said Wachholtz, the UN evaluator, who was in the audience that day. "I found it crazy."

The next day, Melka established the first eight Peruvian corporations for the plantations he wanted to develop — several of which, according to company records, would be acquired by his offshore holding company, United Oils. In a letter to local authorities, he wrote that his company had "extensive experience implementing the world's best practices for environmental stewardship."

During a meeting at the US Embassy in Lima, Melka was introduced to Alfredo Rivera Loarte, an agronomist at the UN Office on Drugs and Crime. Melka promptly hired him as a consultant to oversee plantation operations. Rivera's son Julio also came on board, as did another UN employee, Maria Teresa Trigoso. Doldourov, who drove Spoor and me around during my visit, had also worked at the UN, and built roads for United Oils before joining Ocho Sur.

Along with United Oils, Melka created United Cacao, having decided that the Tamshiyacu plantation to the north was better suited for that crop. Melka boasted of his UN ties every chance he got, writing in one pitch document that his senior managers collectively had several decades of experience with the organization.

Over the next three years, Melka raised $38 million for United Oils, according to the company's shareholder records. Seed funds came from wealthy friends and friends of friends, some of whom told me they hadn't fully appreciated what they were supporting.

"At some point I had started to learn more about orangutans and how they were being impacted by palm oil plantations" on Borneo, said one American investor, who was so ashamed by his participation that he asked me to withhold his name. "Oh, fuck," he remembered thinking. "I just put my money with someone who is clearing forest in the Amazon."

Melka quickly lined up more than a dozen investors. Early financers included Eric Varvel, then the CEO of Credit Suisse in the Asia-Pacific region and Steadfast Financial, a New York hedge fund with over $8 billion under management. At the company's launch, the majority shareholder, with $10 million in equity, was a fund managed by Randall at Pacific Agri Capital. Randall's fund received $3 million in capital from Anholt Services, a holding company that managed the $2 billion trust left behind by the Danish petroleum shipping magnate Torben Karlshoej, who founded Teekay. Though Anholt was an indirect investor in United Oils, the company received a privileged view of the company's inner workings directly from Melka, according to a confidentiality agreement signed in September 2012.

In 2014, after being assured by local counsel that Melka was complying with Peruvian laws, Anholt joined with a core group of shareholders in providing United Oils with an additional $48 million through a private bond offering. "The business can support easily US$50m in debt or so (or more)," Melka assured a shareholder in an email. He had purchased $7 million of the company's debt himself.

Melka told his shareholders that he was aiming for an initial public offering on either the Nasdaq or the London Stock Exchange in early 2016. "We've been meeting with mid-tier investment banks with positive feedback," he wrote. "Granted i-banks will always whisper 'sweet nothings' in a client's ear but at least there is interest."

The next challenge was acquiring land for the plantations. Outside conservation areas and Indigenous communities, much of the Peruvian Amazon was in the hands of regional governments: Undivided, untitled, and unclaimed, it was controlled by a glacial bureaucracy in a country where government corruption was widespread.

With his fresh infusion of cash, Melka needed to either find large blocks of land that cash-strapped authorities in Ucayali were willing to swiftly title and sell to him directly, or buy individual properties from homesteaders — settlers who had obtained "certificates of possession" for untitled state lands by proving they had used it continuously for at least one year. According to Juan Luis Dammert Bello, a Peruvian geographer who has studied the growth of plantations in the Amazon, buying land from settlers is an attractive loophole for large developers who are restricted from clearing forest themselves.

Increasingly, shady intermediaries known as land traffickers were organizing peasants to invade untitled lands and then packaging and selling the properties for a profit. Sometimes, the "settlers" they enlisted never actually set foot on the land they were claiming: They just signed a document asserting that they had. Land-trafficking mafias, which operate in every region of Peru, have allowed developers to launder unclaimed swaths of rainforest into legal farmland. But experts say Melka's enablers would be the first to carry it out on such a large scale.

"Melka is the game changer," Dammert told me. "There is a before and an after."

Melka used his UN ties to identify promising opportunities, according to "The King of Cocaland," the documentary film about Hans-Jochen Wiese, the leader of the UN's alternative development program in Peru. "I was supposed to designate land suitable for growing oil palms," Pablo Ramírez Mori, an official with the regional agriculture authority in Ucayali told the filmmakers. Wiese, Ramírez said, "agreed to this or that zone." Ramírez declined my request for an interview, saying it was "up to the authorities to follow the process"; Wiese, who died in an accident last year, had said his only goal in helping Melka was to help the Peruvian people.

In 2012, Melka acquired the 17,000-acre Tibecocha property, which included 222 parcels owned by an association of farmers. The association's members had obtained certificates of possession years earlier under questionable circumstances, according to Dammert's research. Apart from the extraction of high-value timber, Peruvian auditors found little evidence that they had cultivated it in a sustained way during their tenure, as required under the law. Most of them didn't even live nearby. Dammert has called it a textbook example of "ghost titling," where government officials create an association whose ranks they fill primarily with friends and relatives, hoping to profit from a subsequent sale. One sales contract, for a 109-acre parcel, indicates that Melka paid members of the group about $100 an acre.

Some 10 miles west of Tibecocha, Melka obtained a second property, Zanja Seca, by different means. This included 11,000 acres of state land in Ucayali that had already been surveyed and would soon be mass-titled in an effort to support a hundred or so subsistence farmers who had abandoned coca under a USAID-funded program. As soon as they received their certificates of possession, these farmers were hoping to plant cacao and oil palm. But after a massive fiscal decentralization, the Ucayali government was in need of cash. Ucayali authorities began dragging their feet in finalizing the homesteading paperwork, according to a legal complaint filed by the farmers. Then, to their great surprise, Melka purchased all 11,000 acres directly from the state for a steal: $25 an acre. (This month, three officials were sentenced to prison by an anti-corruption court for abuse of their positions in making that deal.)

With his lands in hand, Melka hired contractors to bulldoze the forest, burying the trees in trenches to improve the poor tropical soil. Analyses of satellite images conducted by the Peruvian government and environmental groups indicate that more than 90% of the Zanja Seca and Tibecocha properties were covered with primary or secondary forest at the time Melka took ownership. A million palm seeds were soon imported from Ecuador, Colombia, Costa Rica, and Ivory Coast. Worker camps, dining areas, and soccer fields were erected.

With Melka's development of the plantations came new roads, followed by more homesteaders, speculators, and land traffickers, according to Dammert and other researchers. Oil palm spread in the uplands, rice crops in the peatlands. Land conflicts were on the rise. Melka's two plantations were like a tightening vise, forcing communities in the middle to decide whether they would work with the company or against it.

One of the communities trapped in this vise was Santa Clara de Uchunya, an Indigenous Shipibo village tucked away in a looping bend of the Aguaytía River, a tributary of the Ucayali. The Peruvian state granted the community about 540 acres in 1986. It wasn't much, but they had only to cross the river to hunt wild game, gather native fruits, and harvest natural dyes for pottery and textiles they sold in local markets. Now, those forests were being cleared.

In an April 2015 letter to the director of the regional agriculture authority, the leaders of Santa Clara de Uchunya complained about their situation. "Our ancestral territory has been granted to Plantaciones de Pucallpa for the planting of oil palm," they wrote. They requested a territorial expansion to make up for what was being lost. And to help their cause they summoned a prominent Indigenous activist, Washington Bolívar Díaz, a descendant of the neighboring Kakataibo people.

Bolívar had helped found a federation uniting nine Kakataibo communities and became an eloquent defender of Indigenous rights. He was immediately recognizable by his long hair and the beaded necklaces and headdresses he wore for meetings.

In May 2015, Bolivár filed a legal complaint with Peru's Public Ministry, which has the power to launch criminal investigations. In it, he alleged that corrupt officials in the regional agriculture department had conspired with Melka's company to steal and deforest their lands. He described visiting the Tibecocha property one morning that month with a contingent from Santa Clara de Uchunya as part of a government inspection. Bolívar said he was shocked to hear "crying baby monkeys" and "wounded animals looking for their mothers" as the sun beat down on a landscape that had become "a cemetery of trees."

Melka tended to move fast, and that held true as he snapped up land. A new, stricter agricultural law had gone into force in Peru in 2012, but he didn't wait for the government's sign-off on an environmental management plan or obtain a "change of use" authorization to demonstrate the property's suitability for growing crops, according to a 2022 audit by Peru's comptroller general. Nor did he leave 30% of the property's forest cover intact, as required under the law, the audit found. In some cases, the audit said, Melka had cleared property he did not even own, including several hundred acres of a state-owned timberland known as the Biabo Cordillera Azul, which abutted the Tibecocha lands.

None of that corner-cutting stopped Melka from working toward his dream of earning environmental plaudits for his palm oil. In October 2013, a United Oils subsidiary, Plantaciones de Pucallpa, joined the Roundtable on Sustainable Palm Oil. Becoming a member was the first step toward getting the farm certified as 100% sustainable, which could mean a 2% to 7% premium in US and European markets. According to roundtable records, Melka's subsidiary affirmed that it had not cleared any forest for Tibecocha. Melka prepared for certification by commissioning an art-deco-style poster showing a worker hoisting a palm seedling in front of a pale yellow sun. "United Oils," it reads. "World's Finest Palm Oil."

Government investigators were now fanning out across Ucayali to interview hundreds of suspects and witnesses, as part of the criminal investigation that Bolívar's complaint set off. They soon discovered Melka was on the verge of pulling off his most brazen scheme. To skirt the reputational risks of buying more land directly, his employees had begun selecting parcels for homesteaders to clear themselves, then lending them money for fertilizer and seedlings.

They would effectively become contract farmers for United Oils — in debt to the company from the moment they set foot on their new land.

Melka's team had pitched the idea directly to farmers. "What is oil palm? Where will it take us?" one of the sons of Alfredo Rivera, the manager Melka hired after his decades with the United Nations, told a group gathered near Zanja Seca, according to a transcript by a researcher who attended the meeting. "Look, how I have credit cards like a casino! One for my wife, one for me, another one for my wife, and another one for me. That is what oil palm is."

The farmers' paperwork would get fast-tracked by the regional agriculture director, a man named Isaac Huamán Pérez who was a true believer in the promise of oil palm to alleviate poverty. "What alternatives do we have?" he asked me. Though he said he had never met Melka, he had longstanding ties to the United Oils team. He had known Alfredo Rivera since the 1990s. Huamán also told me he was "a great friend" of Ulises Saldaña Bardales, the former mayor of Pucallpa whom Melka had hired as institutional relations manager.

One of the farmers who seized the opportunity was Freddy Monteluiz Paima, who lives with his wife and two children in the community of Esperanza, a village on the left bank of the Aguaytía. When I arrived at his wooden home one May afternoon, he told me that he had no idea what oil palm was until Melka's people arrived.

But the money sounded good, and he said he happily joined 16 other residents in 2015 who heeded the company's call. They grabbed their chainsaws and piled onto several tuk tuks, heading out to a 500-acre plot of land that a local land trafficker had told them they could claim as their own to cultivate oil palm for the company. "That is where the conflict began," he recalled.

Melka had sought to bring another 12,000 acres into cultivation through this sharecropping strategy. In fact, a total of 128 certificates of possession, totaling at least 7,000 acres, were rubber-stamped by the titling division overseen by Huamán, the regional agricultural director. Apart from Monteluiz and a few others from Esperanza, most of the other new landholders had no connection to the area; some went to relatives of Huamán or other officials in his office, according to a prosecutorial report I obtained. When Ucayali's field-titling team visited the area in September 2015, the settlers could not even point out their own parcels. The property lines had all been drawn in a back office in Pucallpa, signed off on by the town's mayor, who was working with the land trafficker. The process was so haphazard that some of the parcels Huamán approved were partway inside a lake.

The plan quickly backfired. On September 24, 2015, according to prosecutors' records and interviews with participants, Bolívar and a few dozen residents of Santa Clara de Uchunya, outfitted with rusty machetes and rifles, headed out to the disputed land to confront the settlers. Monteluiz and his companions fled into the jungle, leaving behind their chainsaws.

By then Julia Urrunaga, of the Environmental Investigation Agency, had published the first detailed report on Melka's modus operandi in Malaysian Borneo and Peru, arguing that a failure to prosecute him would be "to expose Peru's national forest patrimony to rampant illegality and ultimately deforestation."

"The cost is simply too high, the victims too many, for Peru not to act," she and her colleagues wrote.

Peruvian regulators had issued a stop-work order to the Zanja Seca plantation for failing to comply with environmental regulations; now they ordered work to halt on the Tibecocha plantation too. The Roundtable on Sustainable Palm Oil followed suit with its own stop-work order.

In a response to the roundtable, the company wrote, "Most of these lands had been degraded by the illegal cultivation of coca, and by other exploitations of the forest, such as illegal timber and migratory cultivation over 40 years." As for the growing international controversy, Melka responded by lashing out. In one unsigned email to a Czech journalist, he called Bolívar "a total fraud" and warned the reporter to "cease and desist from attacking our company."

For over a year, Melka was able to defy the stop-work orders and operate without consequence. He could not, however, operate without capital. The first revenue from palm oil sales wouldn't arrive until the end of 2016, and he was so underfinanced, according to one investor, that he wasn't spending enough to adequately fertilize the trees. "Bank accounts are empty," Melka emailed his board. "Suppliers are physically protesting outside the office doors."

That February, United Oils defaulted on a $5 million interest payment on its corporate bonds. The $48 million principal would be due in six months time. Melka wrote his shareholders to say that his attempts to obtain bridge financing had gone nowhere. United Oils was on the verge of insolvency, and Melka would soon be publicly named in a criminal investigation against the company and its collaborators.

The crisis pitted Melka's investors against one another. Some shareholders stood to gain in a bankruptcy and some stood to lose, depending on how much of the company's debt they held.

The company's final balance sheet, dated March 2016, tallied the company's assets at $77 million. If a foreclosure auction reaped offers in that ballpark, the surplus could pay back most of what the shareholders had put in, and then some.

But debt trumps equity, and Anholt, the lead creditor with more than a third of the debt, had oversight over any sale. That gave Bill Randall of Pacific Agri Capital grave concerns: Though Randall's funds had been pivotal in the company's early days, they had only purchased 6% of the company's debt. Anholt, he warned in a May 11 memo, might try to "keep the price of the assets as low as possible and attract as little number of bidders for the assets as possible."

Under Cayman Islands law, Anholt's lawyer wrote back, creditors had no obligation to achieve the highest possible price. As for Melka, company balance sheets show that his stake in the plantations would remain around 15% after a sale. (Randall did not respond to multiple requests for comment, and Anholt referred all questions about its investment to Spoor.)

Advertisements soon appeared in the pages of El Peruano and The Jakarta Post inviting interested bidders to participate in a public auction of the plantations. On the auction's final day, July 14, Anholt and the other bondholders acquired all of United Oils' assets in exchange for forgiveness of their debt.

The new company's name: Ocho Sur.

Corporate records indicate that 18 of the 19 shareholders in Ocho Sur funded entities that bankrolled Melka's work clearing and planting of the rainforest between 2012 and 2014. With Melka and other key personnel from the early days remaining involved, the only truly new player was Amerra Capital Management, a New York private equity firm whose funds purchased $10 million of United Oils' bonds.

According to Peruvian prosecutors, Amerra had been told in a due-diligence document that United Oils had "caused the deforestation of approximately 7,000 hectares." Amerra's managing partner, Craig Tashjian, declined to comment, but a person who worked on the portfolio told me the information they received on the legality of the plantations was inconclusive. "We looked at this so many times," he said. "It's not like the investors took it for granted that Melka was right."

Álvaro Rodás Farro, the prosecutor specializing in organized crime who named Ocho Sur in the case against Melka, has argued that the transfer of the mature plantations was part of a criminal conspiracy in which Melka was the ringleader. He dubbed the maneuver "covert business succession."

The company has robustly denied this claim. "Ocho Sur is not the continuation of any previous company," the company wrote in February in response to a new report from the Environmental Investigation Agency. "It is incorrect and impossible to attribute to it any alleged actions that occurred before its existence."

As for the tight-knit circle of environmentalists in Peru who had been tracking Melka for the last several years, they were in the dark during the 2016 transition.

Unless you had a budget for bodyguards — and Lucila Pautrat Oyarzún, the forest engineer who runs Kené, a tiny Peruvian environmental NGO, certainly didn't — it was too dangerous to travel to Pucallpa at that time. Since 2010, at least 29 environmental defenders have been killed in the Peruvian Amazon. Pautrat instead monitored the situation from Lima, in a modest third-floor apartment where the shades were always drawn, messaging with government informants and managing undercover investigators.

It wasn't until January 2017 that Pautrat first saw the name Ocho Sur in a document she obtained from the Peruvian business registry. Then she got a tip that Melka was still visiting Pucallpa, in his roles as a consultant and a member of the board. In fact, she learned, several key players — including Alfredo Rivera, Ulises Saldaña, and Krassimir Doldorouv — continued working their old jobs for the new company. Ocho Sur kept the same United Oils offices in what would become the Wyndham hotel. The signs were simply updated.

Pautrat believed that she was witnessing a greenwashing operation of epic proportions.

Soon, some of United Oils' enablers, including Isaac Huamán, were sentenced to prison for obstruction of justice. But the plantations were receiving fresh investment; Amerra brought a crop consultant over from England, and the shareholders put their money into building a state-of-the-art mill.

Michael Spoor was hired in 2019 after being recommended by an old friend, Joseph Massoud, the managing director of Anholt. Spoor said the overlap in employment in the company was not "surprising or suspicious" given how few qualified professionals are available in the region.

One of his first acts after taking the company's helm was to get rid of Melka. "I went to the board of directors, and I said, 'I don't think we have a chance of success if he remains associated with the project,'" Spoor told me. The company bought out Melka's shares and ended his consulting contract.

Next, Spoor and the company's lawyers worked to get the $2.5 million in fines the company owed to government agencies overturned. In order to get the land reclassified as farmland, they had to pay the state approximately $450,000 to cover harvest rights for the timber that Melka had chopped down. In any event, Spoor thought he was making progress toward resolving the outstanding claims against the company. Then, in 2022, Peru's comptroller general released three audits, concluding that, despite the agency reversals Spoor had orchestrated, Ocho Sur's plantations could never be brought into compliance with existing laws. Spoor took issue with the agency's findings, saying the officials had "overstepped their legal competence."

Spoor has little good to say about the environmentalists who have sought to hold his plantations accountable. The campaigns against Ocho Sur — funded by what he called a "powerful, transnational ideological machine" with "limitless" cash — had cost the company millions in legal fees. They had also led it to be blacklisted, he said, by some of the world's largest food companies, including Nestlé and PepsiCo, and by such prominent commodities traders as Bunge and Louis Dreyfus.

In the past year, Ocho Sur and its supporters have participated in a slew of news coverage critical of environmental NGOs — what Peru's right wing calls the "caviar mafia." Willax Television, the Peruvian counterpart to Fox News, ran a story early this year claiming, without evidence, that Pautrat was hiding millions of dollars in an offshore account. One of Ocho Sur's lawyers made a cameo.

"If I had this money," Pautrat told me, "I would be living in Italy." Kené's annual budget is $160,000.

One day in Pucallpa, Spoor connected me to one of his trusted advisors, Álvaro Agurto Mazzini, a gregarious entrepreneur who has been promoting Ucayali's economic development for over a decade. He wanted me to meet Ulises Saldaña, one of the employees whom Ocho Sur inherited from the Melka days and who now served as the community-relations manager.

Saldaña emerged from an open-air restaurant with two coworkers and a broad-shouldered man in blue jeans and a Henley shirt. This third man stood out because his hair was pulled into a high ponytail atop his shaven head. It was Washington Bolívar, the activist who had helped Ucayali's Indigenous communities fight the palm oil plantations. Once Ocho Sur's most outspoken enemy, he had become the company's supporter.

"He knows that Ocho Sur is defending the truth," Agurto said. "That the NGOs are shit."

"The situation changes," Bolívar said, "because what we want is to improve the quality of life of the people." He now frequently appears in the media as an Indigenous voice lambasting NGOs.

Bolívar was not the only one who'd switched sides. In 2019, the state government granted Santa Clara de Uchunya a chunk of forest adjacent to Ocho Sur, which tripled the community's size to 1,544 acres. After an election in January 2022, their new leader, Wilson Barbarán Soria, wrote prosecutors asking them to drop the community as an "aggrieved party" in the criminal case against the company, because it was now in "good relations" with Ocho Sur.

Saldaña arranged to take me to visit Santa Clara de Uchunya the following day. When we arrived, a group of residents were gathered under a metal canopy as a television blared. We found a quiet place to speak with Barbarán, the newly elected leader.

"We are not going to live like our parents had lived," he told me. "We want to better ourselves." He said his people now had the chance to obtain an education to become teachers, lawyers, and police officers.

In his view, Ocho Sur had helped make all this possible by providing benefits like a Starlink terminal, a new health post, and a better road. "Thanks to la empresa, we have a line of communication to the internet," Barbarán said.

In turn, Santa Clara de Uchunya had signed a pact with Ocho Sur to preserve its newly acquired forests for the next 25 years. It was a critical final step for Ocho Sur in legalizing its plantations. Since Melka had failed to preserve 30% of the forest he'd purchased, as required under Peruvian law, Spoor needed to offset the deforestation by guaranteeing conservation elsewhere.

As Saldaña jumped in to explain that the conflict with the company had been blown out of proportion by the media, a woman emerged from the house next door and interrupted our conversation. "Señor, Ulises," she said, "why do you deny it?" There was an awkward moment as Saldaña calmly ignored her, saying that the majority of the community fully supported Ocho Sur.

I later learned that the woman was the daughter-in-law of a woman named Luisa Mori González, who heads an organization made up of the resistance — a group of 10 or so families who remained opposed to Ocho Sur and didn't share Barbarán's rosy assessment of the community's prospects.

I found Mori in the back of the house, seated at a table near a wood fire stove, where a splayed possum was about to be cooked in a blackened pot. She expressed indignation about the pact the community had signed with the company, saying they were still a long way away from securing enough forest for their own future.

"Where are we going to work during the next 25 years? Where are we going to hunt animals like this?" she said, gesturing to the stove. Though the agreement with Ocho Sur allowed hunting and gathering in the forest, she said too many natural resources had already been lost. It was no longer possible, she said, to find the apacharama tree, whose bark was traditionally burned to ash and used in pottery.

"I am taking this position so as not to be tricked by the businessmen, the millionaire entities that are going to fool us with 1 kilo, 2 kilos of rice," she said. At stake, she said, was the future of the community. "Life is not bought — life is borrowed," she said. "Just as my ancestors left our territory for me, so I am going to leave it to my children and to my grandchildren."

Later that day, Spoor and I met for lunch at a cabana with a palm-thatch roof overlooking the dark waters of Tibecocha Lake. It's a lovely spot on the edge of the property where Spoor has brought many of his influential guests. As the company chef prepared us a meal of risotto and breaded arapaima, an Amazonian fish, we leaned against the railing, gazed out at the forest on the opposite bank.

He told me he was proud to have opened a new weigh station to purchase palm fruits from farms it has verified as deforestation-free. "It is literally a cash register for farmers," Spoor said. "Farmers who used to grow coca leaves are happy to switch to palm oil." Peru's ministry of agriculture liked the idea enough to finance families seeking to grow oil palm for Ocho Sur and other local mills on previously degraded land. Diane Farrell, the US deputy undersecretary of international trade, even attended a launch event at Ocho Sur's nursery.

As Spoor and I talked, I noticed a fresh clearing in the lakeside forest, where rice shoots were sprouting from the soggy soil. It had been leveled just six months earlier by farmers from Esperanza, who had once sought to grow oil palm for Melka. "It was a devastating surprise," Spoor said. He had been hoping, he said, to conserve that land to add to the company's offsets.

Since Melka's arrival in 2010, the Ucayali region has experienced the highest rate of deforestation in Peru. In addition to the land-clearing on Tibecocha and Zanja Seca, one study documented 6,000 acres of forest destroyed from 2011 to 2016 by four communities that now grow oil palm on some of those lands for Ocho Sur. Coca farming, meanwhile, has increased by a factor of five. Researchers who have evaluated the impact of the USAID and UN eradication programs concluded that while they had produced some benefits, they sometimes pushed "marginalized coca growers into more precarious positions, often leading them to replant coca in more distant forests."

A spokesperson for USAID told me that the agency now works to limit deforestation by helping small coffee and cacao growers increase production and that the US government "will continue to partner with and strengthen institutional capabilities of Peruvian agencies involved in counternarcotics efforts." Candice Welsch, who heads the UN Office on Drugs and Crime in the Andean region, said the office's strategies had evolved in the decade since Hans-Jochen Wiese was leading alternative development. In 2022, the UN approved a resolution prioritizing biodiversity protection in its development work. "We never advocate for monocultures," Welsch said.

When I asked Spoor recently how Ocho Sur could ever escape the land-clearing its plantations were built upon, he challenged me to identify anyone in the region who was truly worse off because of it today. "Do you think 10 years from now, 20 years from now, people will say this is a tragedy?" he asked. "I'm puzzled by this ideology that wants to keep people in poverty." He told me he hoped my story would focus on the "paradox of human progress" and show how "even amidst despair, seeds for a better future can take root."

For Ocho Sur, achieving that dream has meant erasing history. The company has vigorously challenged its inclusion in Rodás' criminal case against Melka, filing a countersuit claiming that the prosecutor had overstepped his powers and engaged in "ideological persecution." Rodás' office told me formal charges were imminent.

But the real battle over the company's future and the definition of deforestation has already shifted from the courts to the politicians.

In January, Peruvian lawmakers granted amnesty to landowners who, like Melka, had cleared their land without first obtaining the change-of-use authorization. Supporters of the new law have said it will help formalize the farming sector, but the move has been challenged in court on the grounds that it could worsen conflicts between settlers and Indigenous communities. Fighting in favor of the amnesty is a familiar name: Washington Bolívar. He is represented in these efforts by the law firm Estudio Ghersi, which is also defending Ocho Sur in the criminal case.

One of the biggest obstacles to Ocho Sur coming into full compliance with Peruvian law is its lack of an approved environmental management plan, but a separate regulation, enacted in June, gave companies across the Peruvian Amazon a chance to retroactively obtain the needed approvals.

A few months after my visit, the Amazon was engulfed by record wildfires that incinerated over a hundred million acres of rainforest. The forests of Ucayali were among those going up in flames. In a climate of impunity, farmers and land traffickers had set hundreds of fires to clear new land for crops. These fires, I was told by one human rights organization, had swept through part of Santa Clara de Uchunya's new territory.

The firefighting crews had taken up residence in housing provided by Ocho Sur.

The European Union met the moment by voting last month to postpone its new deforestation regulations for a year.

• Ad industry M&A activity is expected to surge in 2025.
• Key areas of interest include retail media, streaming TV, influencer marketing, and AI.
• Insiders think companies like Accenture, AppLovin, and The Trade Desk could be active acquirers.

Bankers and M&A advisors say advertising and marketing acquisition deal flow picked up in the second half of 2024 after a slow start, and they're expecting a flurry of activity in the new year.

"It feels like the tide has turned," said William Ritchie, the managing director of the M&A advisory firm WY Partners.

Some in the industry told Business Insider they thought Omnicom's planned $13.25 billion deal to buy Interpublic Group would be a lightning rod for further ad industry M&A in 2025.

Key areas of buyer interest include the fast-growing retail media and streaming TV sectors, influencer marketing, and the implementation of data and AI. Industry insiders said private-equity buyers would also most likely remain active.

"Everyone is looking for the glue that ties together some of the components," said Charles Ping, a managing director of the Winterberry Group management consultancy.

BI talked to about a dozen advertising, marketing, and adtech industry executives, investors, bankers, and advisors, who speculated about the deals they think could happen in 2025 and beyond. Some of the people were granted anonymity to protect business relationships; their identities are known to BI.

Accenture could go revenge shopping

Matt Lacey, a partner at the M&A advisory group Waypoint Partners, said the combination of Omnicom and IPG may leave Accenture feeling vulnerable. Its Accenture Song creative marketing group could look to acquire a new asset in areas like data and media, "where it has limited capabilities," he said.

Brian Wieser, an analyst at Madison and Wall, wrote in a recent note to clients that Accenture Song was arguably the "world's largest marketing services business" — at least until Omnicom and IPG come together. Wieser noted that it marked "high single-digit growth" in its most recent quarter, faster growth than its agency-holding-company peers.

Accenture has been a consistently active acquirer of advertising and marketing businesses in recent years. In April it acquired the customer-engagement agency Unlimited to boost its customer-relationship-management offering. In June it bought the Brazilian creative agency Soko.

Another area of interest for Accenture Song is experiential marketing, a person familiar with its strategy told BI.

"Experiential is going to be hot in 2025," this person said. "The sheer fact that people are coming out and younger generations don't just want to be in a digital world, they want social connections. You can do a significant amount of innovation in the integration between tech and real-world settings."

AppLovin could swoop in for deals while its stock is riding high

"Everyone is looking at AppLovin," said Alex Iosilevich, a partner at Alignment Growth, which invests in media and entertainment companies. "The expectation is they'll be acquisitive."

AppLovin's stock has been soaring, and it's been trading at a market value above $100 billion. Investors have been wowed by its move into e-commerce, which has opened up a new and lucrative pool of advertisers beyond its mobile-gaming roots.

While AppLovin's executives have said M&A isn't part of the company's near-term growth strategy, that hasn't stopped industry insiders from speculating about its next move.

"I think they should buy someone like Snapchat and get a foothold in the social space," said Alex Merutka, a former early AppLovin employee who's now the CEO of the adtech company Craftsman+.

Other ad industry insiders said AppLovin could further expand into connected TV, adding to its 2022 acquisition of Wurl, a company that helps publishers distribute and monetize their video content on TV screens.

Connected TV presents a "massive area to unlock SMB budgets to play in TV ads," said Tom Triscari, the CEO of the programmatic-advertising advisory firm Lemonade Projects.

Criteo could be bought or go shopping itself — or both

Criteo has long been the subject of takeover speculation. Reuters reported in early 2023 that the company had appointed the investment bank Evercore to explore its strategic options.

News that Criteo's CEO, Megan Clarken, plans to exit the company next year also fueled rumors that a sale could be in the cards. Digiday listed The Trade Desk, Microsoft, Walmart, Publicis Groupe, and WPP's GroupM as logical suitors.

Triscari said it could be equally possible that Criteo itself makes a transformative acquisition.

"Criteo has retail media, the second-best shopper dataset to Amazon, and better adtech than Amazon," Triscari said. "All they need is an access point to CTV inventory. Very doable with some creative options out there."

Criteo might also want to double down on retail-media tech. Digiday reported this summer that Criteo had been in talks to acquire Skai, a marketing platform that specializes in retail search advertising, among other things. The Israeli news site Calcalist reported this month that Skai recently laid off 80 employees, which could signal that the company is preparing for a sale.

Havas listing could spur deals

The French advertising group Havas listed on the Euronext stock exchange in Amsterdam this month, separating from its parent company, Vivendi.

Havas has said it will continue taking a "disciplined approach to acquisitions," with a plan to target high-growth markets and areas like data analytics, digital transformation, and AI.

"They look at everything right now," Ritchie, of WY Partners, said.

Havas had a busy 2024 with the acquisitions of the data firm DMPG, the B2B marketing company Ledger Bennett, the Australian media agency Hotglue, and the social-media agency Wilderness, among others.

IAS could get taken private

BI reported last month that KKR and other private-equity buyers were weighing a deal to acquire the publicly traded ad-verification firm Integral Ad Science. KKR and IAS declined to comment at the time.

Bloomberg first reported that IAS had appointed the investment bank Jefferies to explore its options after receiving inbound takeover interest.

A take-private deal could help IAS grow further without the quarterly Wall Street scrutiny.

Speaking generally about the adtech industry, Ping, of Winterberry, said, "There are many companies that don't have access to the capital that they imagined they would when they listed, and it's hampering their growth, particularly if they have a global outlook."

He added that take-private deals could unlock new capital while offering some value back to shareholders. Ping pointed to Mediaocean's $500 million acquisition of the CTV advertising and analytics firm Innovid and to the advanced-TV ad company Cadent's $324 million acquisition of the performance marketing company AdTheorent as recent examples of this trend.

PE-backed independent agency groups could make big moves

Jay Pattisall, a vice president and principal analyst at Forrester, said the consolidation of Omnicom and IPG could open up more opportunities for private-equity-backed independent ad agencies like Dept, Horizon Media, PMG, Tinuiti, and Wpromote.

"Anticipate more growth in independents' innovation investments and more focus in their proposition to compete with the global consolidation of marketing scale at Omnicom, Publicis, and WPP," Pattisall wrote in a recent blog post.

According to the advisory firm SI Partners, private-equity and private-equity-backed transactions were responsible for about a third of deal volume in the agencies, consultancies, and technology-service-provider sectors in the year to mid-November.

Some might seek new investors, given where they are in their private-equity investment life cycles.

Dept, which sold a majority stake to Carlyle Group in 2020, is expected to be in the market for a new investor next year, industry sources told BI.

The US media agency Horizon Media could also be in play, since Temasek, the investment firm that bought a minority share in 2021, will want an exit at some point, said Dave Morgan, the executive chairman of the TV-ad-buying company Simulmedia. Last month Horizon added a full-service creative agency to its ranks, hinting at ambitions to become a bigger global network.

Talent agencies like CAA, Wasserman, and UTA will be jockeying for influencer experts

M&A insiders said talent agencies were gearing up to make deals to broaden their offerings beyond traditional talent management.

Influencer specialists are at the top of their shopping lists, these people said.

"You have this melding — where does influencer live in the context of things like TikTok Shop or Instagram?" said Bob Morris, a managing partner of the M&A advisory firm Bravery Group. "We hear over and over that talent agencies are looking for different models and sets of mechanics."

Talent agencies are also looking to become more data-centric to identify which influencers drive sales, Morris said. Adobe Analytics said influencers and other affiliate marketers drove about 20% of US Cyber Monday e-commerce revenue this year.

There are plenty of interesting targets on the market. In 2024, 17 creator-focused startups raised at least $10 million in new funding, totaling over $900 million.

Could The Trade Desk buy Roku?

The Trade Desk this year announced a coming connected-TV operating system called Ventura, which it said was designed to make the buying and selling of streaming TV ads more efficient.

Ahead of the launch, The Trade Desk's CEO, Jeff Green, batted off speculation that it planned to rival Roku, saying it wanted to continue to partner and not compete with the TV platform.

In separate notes to investors, analysts at Guggenheim and Needham said they thought it was likely that The Trade Desk could eventually acquire Roku to advance its TV ambitions.

"It's almost impossible to build these" TV platforms now, the Needham analyst Laura Martin said in an interview on Bloomberg TV. Roku has 85 million homes watching four hours of TV a day on average, which would open up a large engaged audience and lots of first-party data to The Trade Desk's advertisers.

All eyes are on WPP's next move

WPP was already licking its wounds after Publicis Groupe hired Snoop Dogg to help promote that it had become the world's largest advertising holding company. The coming together of the third- and fourth-biggest firms, Omnicom and IPG, is set to push WPP further down the pile.

"It will put even more pressure on Mark Read," WPP's CEO, said David Jones, the CEO of a rival ad firm, The Brandtech Group. "And it will bring renewed interest from the investor community."

WPP insiders and observers had speculated for more than a year that the company might be taken private by a private-equity firm or that it might announce its own merger with another holding company.

But some industry insiders now think it's more likely that divestitures are in the cards.

"I think WPP is too big of a buy to go private, but I think they will have a divestiture plan that they are going to execute on in areas that are not high performing and not sexy enough for the public markets," said Andreas Roell, the CEO of Evros Group, which advises on media deals. Case in point: WPP in August sold its majority stake in FGS Global to the private-equity firm KKR in a deal that valued the public-affairs and communications group at $1.7 billion.

AdAge reported that in a recent memo to employees, Read described the Omnicom-IPG deal as "good news" for WPP, adding that WPP would double down on its strategy around creativity, data, AI, and tech "while our peers are distracted and turning inward."

• Blackstone has released a comedic holiday video for the last seven years.
• Last year's Taylor Swift-theme video attracted eight million viewers.
• Business Insider has watched and ranked them all so you don't have to.

Blackstone released its first satirical holiday video in 2018 as a way to liven up employees' spirits in lieu of the company-wide holiday party, a tradition that was canceled because the firm had grown too large.

Now, it's a viral sensation. Eight million people have viewed last year's video featuring Blackstone executives doing their best to match the success of Taylor Swift's Eras Tour with a pop song about alternative investments. It made headlines, with the Daily Mail questioning whether it was "the most cringeworthy corporate video ever."

This year, the company doubled down on the singing (and introduced line-dancing) in its most ambitious (and outlandish) holiday video yet. It also featured 200 employees, up from just 20 in 2018, a testiment to the video's popularity within the firm.

Jay Gillespie, Blackstone's head of video, joked that his role in producing the video has made him a hot commodity at 345 Park Avenue.

"People come up to me throughout the year, and they're like, 'My daughter is helping me rehearse so I might get a line next year,'" Gillespie told Business Insider. "People are really into lobbying to be in it."

If you don't get it, don't worry. We decided to help readers save time by watching and reviewing all of the firm's videos going back to 2018.

No. 7: 2020

This video came out in December 2020, during the depths of the pandemic. It stuck to the theme it launched in 2018 of depicting Blackstone as a version of the NBC sitcom "The Office," but executives wore face masks and pandemic jokes featured prominently. In an early scene one Blackstone executive has a hard time recognizing a colleague with out-of-control long hair. (Remember when all the barber shops were closed?)

While it was a bleak time, the video ends on an upbeat note, with Blackstone employees cutting loose to "I'm Walking on Sunshine," kicking off the tradition of holiday video songs, which have featured prominently since. Still, it's a bit stuck in the pandemic era, hence its place at No. 7.

No. 6: 2022

The conceit of this holiday season is fake news station "BX TV News" prompting Jon Gray to search for Blackstone's secret sauce. (It was a roundabout way for the firm to tout its plan to hit $1 trillion assets under management, which it has since achieved.)

Schwarzman returns to a role he often plays in these videos as the sincere elder statesman to explain that the firm's true secret sauce is its employees. But then, he notes that there is a secret hidden in the basement, setting two executives on an Indiana-Jones-referencing journey to find the scroll with the firm's secret. This weird twist is the highlight of the video.

The video successfully makes a number of self-deprecating jokes about Blackstone's love of acronyms (BCRED, anyone?) and Wall Street's notorious work hours. By 2022, however, the company has been going with "The Office" theme for four years, hence its ranking.

No. 5: 2021

The budget for the holiday video clearly increased this year, with a storyline about the birth of BX TV, the firm's weekly video call that Gray is incredibly enthusiastic about (and employees, less so). There are animals, special effects, and a Reese Witherspoon cameo.

The key joke is a fake award ceremony where Gray receives "'Best Weekly Internal Zoom Call at an Alternative Asset Management firm." The hope is that it will convince the firm's president and chief operating officer that it's time to move on with John Finley, chief legal officer, saying, "I make one call to the FCC and they'll cancel this clown car."

Employees chant "end it," and celebrate as they think Gray has decided to cancel the show after winning the award. But instead, it's clear that 2022's BX TV season is already being planned, and the internal video call is still a weekly requirement at the firm.

No. 4: 2018

Scranton, Pennsylvania, is a long way from Park Avenue in Midtown Manhattan, and Dunder Mifflin would be among its smallest portfolio companies, yet Blackstone successfully riffed off the NBC sitcom "The Office" for its first annual holiday video. The video begins with the theme music from the television show, and like "The Office," there is hand-held camera work and plenty of "candid" interviews with executives. There's also a Michael Scott look-alike. As with all the holiday videos that follow, this one starts with Jon Gray calling his executive assistant, Laurie Carlson.

This video started it all and set the tone for Blackstone's trademark style of mixing the firm's reality with jokes. The premise of the video is that Blackstone canceled its holiday party and replaced it with a video, which actually happened. And Jon Gray really does, sometimes, act a bit like Michael Scott in his enthusiasm for wild ideas, according to people who know him. There are fewer visual gags and no Hollywood cameos, but it's a classic.

No. 3: 2023

The 2023's holiday video marked the first time Blackstone moved away from being a parallel version of "The Office" (only the title card remains). Instead, it's an homage to Taylor Swift and the Eras tour, with Blackstone trying to replicate her success with its own song about alternative investments.

This is video that broke into the wider world, spawning more than a few mocking tabloid headlines. But for a video series that's main goal is to help the firm laugh at itself, that's a measure of success. Add that this immortal line: "Just this once, I do hope people confuse us with BlackRock." Also, you get to see Steve Schwarzman dancing while wearing some glittery fringe top.

No. 2: 2019

The 2019 holiday video revolves around Blackstone' absurd search for a company mascot, which turns out to be Mr. Stone, a mascot that looks like a cross of Hulk and Jon Gray. The international offices of Blackstone get cameos in this one, as does a plug for Steve Schwarzman's book, What It Takes: Lessons in the Pursuit of Excellence"

Gray told BI that this was his favorite in the series because of the mascot. The firm not only hired a company to build the mascot suit, but also made dozens of bobbleheads which still show up in holiday videos, and on some people's desks.

We agree that that the mascot joke works, hence its ranking.

This video also ends with one of the best Steve Schwarzman gags of the series, when it's revealed that Schwarzman has been the mysterious person inside Mr. Stone the whole time.

No. 1: 2024

After last year's reception, leaned in to the cringe with a metaverse-like exploration of Blackstone executives as reality television stars that ends in a country song-and-dance routine.

It features appearances from famous friends. Larry Fink, CEO of BlackRock, which was originally created within Blackstone before spinning out in the 1990s, gets in a joke about how the two firms get confused for each other.

An extended "Real Housewives" bit includes some shade from Jenna Lyons, "Real Housewives of New York" star, fashion designer and executive creative director at Fundamental Co, a branding agency spun out of Blackstone last year.

The highlight, however, was billionaire founder and CEO Steve Schwarzman playing Kendall Jenner attempting to cut a cucumber, which has to be one of the most mind-bending images ever put on screen. (We are still struggling to fully process it.)

Gray told BI that the turn to country was inspired by Beyonce's own embrace of the genre this year on "Cowboy Carter", which came in the wake of her 2016 snub by the Country Music Awards. And just like Beyonce, some of the firm's best work comes when they don't let the critics stop them.

• Blackstone's holiday video series is back, and this time the firm is going country.
• The video combines another original song with a slew of reality-television parodies.
• BlackRock CEO Larry Fink and fashion designer and reality-TV star Jenna Lyons make cameos.

Blackstone on Thursday launched its most ambitious holiday video yet on Thursday, featuring 200 employees, two cameos, and a country music song-and-line-dance routine.

The video series, which has become must-see TV for Wall Street, is in its seventh year. Last year's version attracted widespread attention, resulting in 8 million views across various platforms, the company said. The videos seek to poke fun at the people behind Blackstone, which manages $1 trillion in assets, while also touting its investment prowess.

This year's video ditched its usual framing around NBC's hit sitcom "The Office" in favor of reality-TV parodies and included a brief appearance by the "Real Housewives of New York" star and fashion designer Jenna Lyons. Some of Blackstone's portfolio companies, including Supergoop and Jersey Mike's, also got airtime.

It kicks off with a recap of last year's video, which depicted Jon Gray, Blackstone's president and chief operating officer, compelling the firm's executives to go on tour like Taylor Swift. In a "Behind the Music"-type parody, the executives lament the poor reception they received for their "cringeworthy" song titled "The Alternatives Era."

"People just stopped talking to me," Jon Korngold, the global cohead of technology investing and head of Blackstone growth, said. "CEOs, LPs, even my mom."

BlackRock CEO Larry Fink makes an appearance to turn his nose up at the company.

"Can you believe people confuse us with them," Fink says.

The story takes a turn when Christine Anderson, the head of corporate affairs at Blackstone and one of the masterminds of the firm's holiday video tradition, decides that the next logical step is reality TV.

The video, a metatextual reference to its own popularity, then hits overdrive with a series of reality television spoofs, from the "Real Housewives" to "The Bachelor."

"I'm private equity's biggest asset," Joe Baratta, the head of private equity, says in a braggadocious manner while being introduced in the faux series, "The Real Executives of Park Avenue."

Even the firm's international offices get in on the act with the London office starring in "Love Island Blackstone" and the Tokyo team competing in the infamous "Human Tetris" game-show stunt.

Back at 345 Park Avenue, Gray's executive assistant, Laurie Carlson, throws a martini into the face of Joe Lohrer, the head of US retail sales for Blackstone's private wealth group.

"Sorry, Joe, they wanted me to do something dramatic," Carlson says.

The head of Blackstone's video team, Jay Gillespie, makes an appearance as a reality-television producer and calls for another martini to try the shot again.

Perhaps the funniest bit is Schwarzman's appearance in a parody of "Keeping Up with the Kardashians," in which he is filmed awkwardly cutting a cucumber à la Kendall Jenner.

Back in the conference room, Gray tells the firm that they're going down the wrong path. A running gag in the series is that no one wants to go along with Gray's hare-brained ideas and it seems like he's finally come to his senses. Instead, he proposes another zany idea.

"Blackstone needs to go country," Gray says.

The video is capped off by the firm's second original song as executives sing and dance around the office, in Midtown traffic, and on the back of a mechanical bull.

The song's chorus, lip-synced by Schwarzman in the video, is "You can build. You can build with Blackstone," a reference to the firm's first television ad, which was released earlier this year.

The 1988 buddy-comedy action flick "Midnight Run" had an unexpected impact on the restaurant industry. While the romp about a bounty hunter transporting an accountant across the country didn't make a box-office splash, one line stuck around.

"A restaurant is a very tricky investment," the accountant, played by Charles Grodin, tells the bounty hunter, played by Robert DeNiro. DeNiro's character dreams of opening a coffee shop with his big score, but the accountant shuts him down: "More than half of them go under within the six months."

The idea that restaurants are a bad investment predates the film, but the quote lodged in people's minds. Over the past 20 years as a cook, restaurant critic, and food writer, I've heard Grodin's risk assessment quoted repeatedly, almost verbatim. But if restaurants really are a lousy investment, then why would private-equity firms be dumping billions into the sector? Data from PitchBook found that private-equity investments into fast-casual restaurants grew from $7.7 million in 2013 to $231 million in 2023 — a nearly 3,000% increase.

In 2024 alone, Blackstone purchased 1,400 Tropical Smoothie Cafes and a majority stake in Jersey Mike's — deals that gave the chains multi-billion-dollar valuations. Sycamore Partners also bought 250 Playa Bowls locations. Before its IPO in 2023, the Mediterranean eatery Cava raised nearly $750 million from private investors. Meanwhile, SoftBank Vision Fund has pumped hundreds of millions of dollars into restaurant tech over the past decade.

All that cash has led to a boom in places like Chipotle, Shake Shake, and Sweetgreen. Between 2009 and 2018, the number of fast-casual restaurants in America doubled, while sales have nearly tripled. Meanwhile, the amount of money Americans spend eating out has jumped by nearly 60% since 2009. That doesn't exactly sound like a lousy investment.

The trouble is that private equity has a knack for destroying businesses. Red Lobster declared bankruptcy earlier this year after 10 years under private-equity management, Toys "R" Us famously shut down following a private-equity takeover, and even hospitals have struggled after private equity got involved. The cash infusion to wannabe chains and franchises has also made it harder for independently funded restaurants to compete for customers, real estate, and staff. When the gravy train stops, fast-casual restaurants are going to be in trouble.

To understand why private equity is pouring money into restaurants, we have to start with the appeal of the fast-casual model. In some ways, it's the golden mean of restaurants. You can charge twice as much for a meal at a fast-casual spot as you can at a fast-food joint. In Manhattan, a Burger King cheeseburger costs $3.40, whereas a Shake Shack burger will run you $7.79. But when you look at the overhead costs, there isn't much difference. Both restaurants staff a similar number of people and rely on similar ingredients. Chipotle may offer a burrito, a bowl, a quesadilla, and a salad, but it's all more or less the same ingredients: beans, corn, salsa, cheese, and basic proteins. The limited menu enables both fast-food and fast-casual restaurants to be efficient, keep costs down, and avoid losses from food waste and labor. And since fast-casual spots appear to be the nicer restaurants — with gourmet ingredients like brioche buns, healthy-sounding options, and claims of sustainable sourcing — they can charge more. If price and speed aren't priorities, many people would prefer to grab lunch at a Chipotle than at a Taco Bell.

The model also has an edge over sit-down restaurants, which have struggled in recent years. "Casual dining proper is not doing so well," Alex M. Susskind, a professor of food and beverage management at Cornell University, says. "Fast casual has provided consumers with a better meal experience that's equal to, or in some instances better than, a casual-dining restaurant, with less of a time and financial commitment."

The food is just as good, but the service is much faster. He says that's helped make the model a better investment than a place like Applebee's. Thanks in part to those higher profit margins, one restaurant analyst said it takes 18 months for a Chipotle to pay back buildout costs, compared to five years for a Cheesecake Factory.

"PE is investing money in the fast-casual market because the economics of a fast-casual concept is much better than any other type of restaurant concept," says Chris Macksey, the CEO of Prix Fixe Accounting, which specializes in hospitality. "Profit margins are anywhere from 10% to 15% as opposed to a full-service restaurant, which is 5% to 8%. Fast casual is just a far more scalable concept."

Scalability is really the brass ring. Investors in fast-casuals aren't buying restaurants; they're buying the potential growth of restaurant brands. Susskind says the boom reminds him of the late 1990s when casual-dining brands like Applebee's, TGI Fridays, and Olive Garden were taking off. He sees the recent shutdown of some of those chains — such as TGI Fridays, Red Lobster, and Smokey Bones — as a market correction for their overexpansion.

"That's what's making the investments in these businesses attractive. Because a lot of the weaker players have been weeded out," Susskind says about fast-casual restaurants. The frenzy has also been encouraged by the successful IPOs of companies like Sweetgreen in 2021 and Cava in 2023. Seeing Cava's stock grow by nearly 250% since its IPO has left investors searching for similar success.

While Sweetgreens and Dave's Hot Chickens are popping up across the country, independent restaurateurs are often left scrambling — not even for a piece of the pie, but for the crumbs.

Tracy Goh is the chef and owner of Damaran Sara, a two-year-old Malaysian restaurant in San Francisco, home of some of the most expensive commercial real estate in America. She's experienced landlords' preferences for fast-casual chains over small businesses like hers. "Especially for me, because it's my first restaurant. I don't have data to convince them that I can stay on a lease as long as they are likely to," Goh says. "They have a preference for the franchises or the big names."

A landlord's job is to generate money from their property. Their business isn't about enriching their community; it's about finding the most reliable tenants who can pay the most rent. In the restaurant real-estate space, that often means fast-food and fast-casual brands backed by major investment firms.

"If you're Chipotle or Shake Shack, you may decide to take a lease above market. You can afford it because you're privately funded," says Talia Berman, a partner at the hospitality advisory firm Friend of Chef and an expert in New York's restaurant real-estate market. "You beat out the competition because you don't care how much money you make in that space because it wasn't meant to be profitable based on the unit economics. It's part of a larger strategy."

That strategy is all about growth, she says. The primary goal of investment-backed restaurants is to expand quickly. "They're typically barreling toward an exit. So they're looking to get purchased by Nabisco or Darden or Levy or one of these huge restaurant conglomerates. And they need to show distribution — that they're operating in many states and that they have high top line," Berman says, referring to high sales volume.

A location that can gross $2 or $3 million in a year can demonstrate to a potential buyer that the eatery is successful — even if a high rent lowers the average unit profit margin. "They're thinking short term. It's a private equity mentality," says Berman.

Investment-backed restaurants also have a timing advantage over smaller shops. When a developer begins work on a new building that might lease space to a restaurant — a strip mall, food hall, or multipurpose apartment complex for instance — it's usually working on a multiyear timeline. Moshe Batalion, the vice president of national leasing for RioCan, one of Canada's largest real-estate-investment trusts, told me the firm starts thinking about who to lease to before it even breaks ground on a new property. Leases might be signed years before the space is even ready for move-in. Independent restaurateurs typically can't plan for a restaurant that won't open for two to three years.

"For independent operators, the real disadvantage is access of capital," Susskind says. "If they have access to a decent level of capital, they can grow, open more units." For chains, that's easy to do. But, he adds, "if I'm an independent, I don't know where I'm going to get $500,000 to ink a deal and build a restaurant."

When small-time restaurants get left out of the real-estate market, diners are left with a food scene that increasingly looks and tastes the same.

Thomas Crosby, the CEO of Pal's Sudden Service, a Tennessee-based chain of 31 burger shops, is all too familiar with the downsides of private equity. It's why he has eschewed outside investment. Millions of private-equity dollars might help triple the number of Pal's locations in five years — but could the chain continue to train and retest staff to remember that the perfect french fry is 3.7 inches long?

"As soon as you start taking investments or go public, you confuse your mission," Crosby says. "It becomes, what metrics can I do to wow stockholders instead of wow customers? And I think that's how so many companies get sideways. It's kind of like cars: You drive down the interstate, and you cannot hardly tell one brand from another. It becomes so homogenous." He adds: "That's what happens in the restaurant industry."

Chasing the success of another restaurant chain means everyone just tries to copy everyone else. "To please the stockholders or investors, they've got to be all things to all people," he says. By maintaining control over his operations, Crosby says, "We don't owe people money. We don't lease land. We have zero debt."

Since the early 2000s, private-equity firms started taking on a bigger role in the companies they'd invested in; these firms didn't just expect returns down the line, they began telling companies how to achieve those goals. This was good for innovation and safety, but bad for job creation and wages, with "sizable reductions in earnings per worker in the first two years post buyout," professors from Harvard and the University of Chicago's Booth School of Business wrote in a 2014 research paper.

In the long run, private equity often leaves companies worse off. In 2019, researchers found that public companies that are bought out by private-equity firms are 10 times as likely to go bankrupt as those that aren't — a finding that complicates the argument that companies like Toys "R" Us closed simply because of market forces. Similar to the casual-dining boom before it, Susskind, the Cornell professor, believes that the investment boom in the fast-casual sector will eventually lead to a bust.

Already, the graveyard of private-equity-backed restaurants is growing. BurgerFi, which has 93 locations and 51 pizza subsidiaries, primarily in Florida, received $80 million in investments just a few years ago. But despite last year's plan to update the chain's stores, menus, and technology, the investment has largely transformed into debt. The company defaulted on $51 million in credit obligations this year, and in September, it filed for bankruptcy.

Between 2015 and 2019, Mod Pizza received a total of $334 million in private-equity investments, which enabled the brand to grow to 512 locations across Western states, with over 12,000 employees. In 2019, the firm boasted of being "the fastest-growing restaurant chain in the United States for the past four years," with a plan to hit 1,000 locations in five years. The rapid expansion outpaced realistic sales growth, and earlier this year, the company closed over 40 locations.

Similarly, Rubio's Fresh Mexican Grill, founded in 1983 in California, was acquired by Mill Road Capital in 2010 for $91 million. The new ownership updated the name (to Rubio's Coastal Grill), the interior design, and the menu. Renovations at each location cost about $200,000. The chain ended up declaring bankruptcy twice: once in 2020 and again earlier this year. Though the company attributed the first filing to pandemic lockdowns, it was already struggling to maintain its growth and stay in the green prior to 2020. When it closed more restaurants earlier this year, some employees found they were unable to cash their final paychecks.

Even some of the most visible success stories of investment-based growth haven't borne fruit. Sweetgreen, "the Starbucks of salad" that was heavily backed by venture capital before its IPO, grew from one location in 2007 to 227 this year, with plans to open another 30 a year — though the company still hasn't seen a profitable year. The chain lost over $26 million last year.

At some point, the market taps out and there isn't room for more growth. Americans are already spending 42% more money on dining out than they are on groceries.

Berman says that the high volatility creates opportunities. For one, when a cash-rich restaurant bails on a retail location, it becomes available as a turnkey space, complete with HVAC, grease traps, and floor drains. Berman's company recently made a deal for a popular food brand to build out a research kitchen. It's designed to be an experiment, but they signed a 10-year lease. "Believe me, this place is not going to be around in three years, I promise you," she says. That leaves the door open for other entrepreneurs to take over.

In other words, don't get too attached to the Sweetgreen down the street. It may take longer than six months for private-equity-backed restaurants to go under, but there's a good chance your new fave won't be around in a few years.

Corey Mintz is a food reporter focusing on the intersection between food, economics, and labor. He is also the author of "The Next Supper: The End Of Restaurants As We Knew Them, And What Comes After."

• Marc Rowan on Wednesday addressed succession at the private-equity giant Apollo Global.
• The remarks come weeks after he interviewed for a Trump Cabinet position.
• He flagged several key heads of businesses and the "next generation" of talent.

After Apollo CEO Marc Rowan's whirlwind candidacy for Donald Trump's Treasury secretary, questions remain about what could become of the firm after his eventual exit. After all, he's the last remaining "cofounder" of the newest member of the S&P 500 (Rowan and Josh Harris, the firm's former COO, were granted cofounder status by then-CEO Leon Black about the time the firm went public).

When asked about succession at Wednesday's Goldman Sachs Financial Services Conference, Rowan laid out the private-equity giant's general plan, including the members of his team who could one day succeed him.

"Part of the responsibility that we think we have in stewarding a company is to make sure that everyone has a backup, myself included," Rowan said before delving into the firm's stable of senior talent.

He highlighted "two very, very senior partners" in asset management, likely referring to Scott Kleinman and Jim Zelter. As Business Insider has previously reported, Wall Street stock analysts view the two Apollo Asset Management copresidents as Rowan's natural successors. Rowan also mentioned "two very, very senior partners" in the firm's retirement-services business, Athene. The heads of that business include Grant Kvalheim, its president, and Jim Belardi, its cofounder, CEO, and chief investment officer.

But beyond these names, Rowan said there's "another 10 in asset management and another handful in retirement services" who represent "the next generation" of Apollo executives. He suggested they could soon start playing a more pronounced role in running the company.

"I think you should look to the next 12 months as we will start really pushing forward the next generation and making the transition before we need to," Rowan said, comparing Apollo's preparations for the future to those at any large financial firm.

Rowan, the CEO of Apollo since 2021, has been the visionary behind the company's transformation from a traditional private-equity firm to one that also issues loans and retirement products. The stock is up nearly 275% since he took the helm.

Last month, he was floated as a prospect for Treasury secretary under Trump and Puck reported he flew to Mar-a-Lago to meet with the president-elect, who ultimately tapped the hedge-fund manager Scott Bessent.

Rowan made the comments just days after Apollo was picked to join the S&P 500 index starting December 23, with its stock reaching record highs. Rowan, however, warned against complacency.

"It's just important to realize all of our industry has been really successful," Rowan said, adding that some might be "tempted to take a breath, take a victory lap, or they can keep trying to win."

As BI has previously reported, Rowan has gone to great lengths to keep his employees on their toes despite the company's success, including 4 a.m. wake-up calls and bringing in speakers to scare "'the bejesus out of them."

"I want to make sure that we have a team that is not tired that wants to win because winning is going to involve changing," Rowan said Wednesday. "The shape of our firms is not going to be the same in the next five years."

• Apollo CEO Marc Rowan has transformed Apollo since he took over as CEO in 2021.
• Now, he's being floated as a potential Treasury Secretary under Donald Trump.
• Here's what could happen to Rowan's vision if he leaves and who might fill his shoes.

Since Marc Rowan took over Apollo Global Management in 2021, he's transformed the firm — sending the stock skyrocketing.

Now, the 62-year-old CEO is being floated as a potential candidate for Treasury Secretary under Donald Trump, raising questions about who could take his place, how his departure could impact the firm's ambitious growth plans, and how Apollo might benefit from the Trump White House.

Business Insider spoke to Chris Kotowski, a stock research analyst who covers Apollo for Oppenheimer. He said Rowan's five-year plan for Apollo, which includes doubling its lending business to $1.2 trillion by 2029, would proceed without him.

"I don't think that the vision changes any time soon if Rowan were to leave," Kotowkski told BI. "While Marc is in many ways the visionary leader, I think that APO is pretty institutionalized now and will get on fine without the founder," he said, referring to the company by its stock ticker.

Contenders to take over the top role, Kotowski said, include Apollo copresidents Scott Kleinman and Jim Zelter, as well as Grant Kvalheim, president of Apollo's insurance arm Athene, which has provided Apollo capital for its burgeoning lending business.

"The most likely outcome, in my view, is that the two copresidents, Scott Kleinman and Jim Zelter, would be made coCEOs," Kotowski told BI.

Representatives for Apollo didn't return a request for comment on Rowan's plans or the firm's succession plans.

Rowan is Apollo's second CEO since the firm was founded in 1990. Founder Leon Black ran the firm as CEO until he stepped down in 2021 amid a cloud over his relationship with Jeffrey Epstein. An independent investigation ordered by Apollo found Black had paid the convicted sex offender and financier $158 million in fees over the years for financial advice and tax planning (Black has previously told investors "I deeply regret" his involvement with Epstein).

Josh Harris, another founder, was also reportedly in the running for CEO, but Rowan got the job.

Black and Harris, owner of the Washington Commanders and other sports teams, remain large shareholders of Apollo with 7.5% and 6.0% stakes respectively. Rowan, also a founder, owns 6.1%.

Kotowski, however, ruled out any suggestion that either Black or Harris would reenter the picture should Rowan leave.

"Black and Harris are almost certainly not coming back," Kotowski said.

Representatives for both men declined to comment.

Since taking over the top job, Rowan's credit strategy has become the envy of the industry. Apollo's 2022 merger with Athene brought life insurance and retirement capital to Apollo's balance sheet, which it has leveraged to become the world's largest private lender.

This extra capital helped Apollo thrive during the last few years, stepping in to lend to corporate clients while banks and others took a back seat. Apollo has become the leader of an industry boom in private credit, which now makes up $598 billion of the firm's $733 billion of assets under management.

In a presentation to investors in October, Rowan unveiled plans to double down on the firm's lending business. More recently, he explained how the firm plans to attract more insurance dollars, which will fund the lending business, by expanding its annuity products for retirees.

Kleinman has worked at Apollo since 1996, and was named lead partner for private equity at the firm in 2009. Zelter, longtime leader of credit at Apollo, joined the company in 2006 after a long career at Citigroup where he rose to become CIO of alternative investments.

The men were named copresidents in 2018.

Kotowski called Kvalheim, president of Athene and CEO of Athene USA, a "dark horse" candidate, saying his "betting would generally be on Kleinman and Zelter."

Regardless of whether Rowan leaves or not, his vision could be helped by the Trump administration. Rowan often points to Australia's retirement model, which has been open to more private investment for decades and outperforms the American model, as a model that would boost Apollo's growth.

Trump previously opened up some 401(k) investing to private equity in 2020, and Rowan has signaled hope that it could expand further.

"Should we get access to 401(k) through broad-based reform or regulatory change or regulatory encouragement, I believe that would be upside not just for us, but for the entire industry," Rowan said earlier this month.

Of course, if Rowan were to leave, he likely would have to sell his 6.1% share in Apollo, worth nearly $6 billion, and have his assets put into a blind trust. It's unclear what that could do to the stock price, but given Apollo's recent stellar performance, it's not a bad time to divest.