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Q1 private credit returns were nearly double of PE, all major US banks passed the Fed's stress test, the US convertibles market is booming, consultants are reaping big from AI-related work, and an ex-Segantii trader's pay lawsuit took an embarrassing turn.

More institutions are turning to private credit as a 'safe haven' downside hedge…and so can you. Check out Percent, a highly democratized market for exclusive private credit deals.

Let’s dive in.

Before The Bell

As of 06/26/2024 market close.

Markets

  • US stocks inched slightly higher as investors looked to fresh inflation data due Friday

  • Markets trimmed bets of a July BOC rate cut to 45% from 70%

  • EM currencies dropped to their lowest in two months, led by LatAm declines

  • Japanese yen fell to its lowest against the dollar since 1986

Earnings

  • Micron beat Q3 EPS and revenue estimates on strength in its AI business, but shares fell ~8% as revenue forecasts failed to top estimates (CNBC) 

  • Jefferies reported a 12x jump in Q2 profit and a 59% YoY revenue increase on a surging rebound in dealmaking and underwriting (RT) 

  • General Mills fell ~5% after reporting a larger-than-expected drop in Q4 sales and forecasting below-estimate FY profit as consumer demand falters (RT) 

  • What we're watching this week:  

    • Today: Nike

  • Full calendar here

Headline Roundup

  • Filings reveal 'daddy'-esq nepotism in Morgan Stanley insider trading case (FT)

  • Canada inflation unexpectedly rose in May, hurting rate cut bets (RT)

  • US banks are safe against market turmoil, but risk steeper losses (RT)

  • Private credit is trouncing PE so far this year (WSJ)

  • Surging returns are luring PE giants to India (BBG)

  • US firms have repriced ~$400B of junk loans at lower rates YTD (FT)

  • US convertibles issuance is expected to hit a Covid-era peak (BBG)

  • $54B long-bond ETF sees record inflows as traders 'fight the Fed' (BBG)

  • Mountain of asset sales loom after O&G M&A spree (RT)

  • Post-Covid sovereign debt crises risk is beginning to recede (RT)

  • Consultants are reaping profits from AI (NYT)

  • Bulgaria and Romania failed economic tests to adopt euro (FT)

  • Nvidia CEO laid out overall strategy at AGM (CNBC)

  • Amazon surpassed a $2T market cap (RT)

  • Amazon is launching a Temu and Shein rival (TI)

  • BlackRock directors keep seats at six funds in Saba proxy battle (RT)

  • Hyundai's India IPO advisory fees set to be country's second-highest ever (RT)

  • FASB will require listed firms to disclose worker compensation (WSJ)

  • US new housing supply is at the highest since 2008 (BBG)

  • US judge rejected the $30B Visa, Mastercard swipe-fee settlement (WP)

  • McDonald's' plant-based test failed (BBG)

  • Olam Agri warned of 'food wars' over geopolitical, climate risks (FT)

A Message From Percent

Survey Says: Investment Strategies Are Shifting Towards Private Credit

The stock market is burning red hot these days, which has many investors wondering: If a market correction happens, where can we ride out the storm? 

A Bloomberg survey1 reveals that many institutions now prefer private credit over bonds to hedge against economic downturns. 

Why? T. Rowe Price data2 suggests that allocating 10% to private credit historically reduces volatility and improves risk-adjusted returns. 

But this 'safe haven' asset class isn't just for Blackstone, KKR, and Morgan Stanley–now, everyday investors can diversify with private credit using Percent. 

  • Low minimums: Start with $500

  • Shorter durations: Maturity in 6-36 months (average ~9 months)

  • Monthly cash flow: Most deals offer cash flow through monthly interest payments.

  • Return potential: Percent boasts a net return over 14% in the last 12 months as of Q1 2024

Sign up with Percent and get a bonus of up to $500 with your first investment.

Deal Flow

M&A / Investments

  • German engineering group Bosch is considering a bid for appliance maker Whirlpool, which has a ~$5.6B market cap (RT) 

  • Blackstone is exploring a sale or IPO of sustainability consulting firm Legence that may fetch a $5B valuation, including debt (BBG) 

  • Investment firm MNC Capital raised its offer for recreation products maker Vista Outdoor to ~$3.2B, intensifying a takeover battle with CSG (FT) 

  • $2.1B listed industrial technology manufacturer Barnes is exploring a sale (BBG)

  • Bain Capital and CVC are among PE firms considering indicative offers for French software firm Orisha, which could be valued at $2.1B (BBG) 

  • China Merchants Group bought a 40% stake in the fiber assets of HKT Trust & HK, a unit of Hong Kong telecom group PCCW, for ~$870M (BBG) 

  • Indian pharmaceutical company Dr. Reddy's will acquire Haleon's non-US nicotine replacement therapy business for $633M (RT) 

  • Zurich Insurance will acquire AIG's travel business for $600M (RT) 

  • Blackstone will acquire UK hotel operator Village Hotels for reportedly ~$1.1B (RT) 

  • Qatar Airways is in talks to acquire an up to 20% in Bain-owned Virgin Australia (RT) 

  • UK investment trusts Alliance Trust and Witan will merge to create a $6.3B AUM asset manager (RT) 

  • UK communications firm WPP rejected KKR's approach to take majority control of corporate PR firm FGS; KKR acquired a ~30% stake at a $1.4B valuation last year (FT)

VC

  • Formation Bio, a startup applying AI to drug development, raised a $372M Series D led by a16z (TC)

  • No-code CRM and workflow platform Creatio raised a $200M round at a $1.2B valuation led by Sapphire Ventures (TC)

  • Arrow, a healthcare tech startup, raised a $110M Series A led by Gradient Ventures (FN)

  • Film / TV studio A24 raised $100M at a $3.5B valuation led by Thrive Capital (FT)

  • Fetcherr, an AI demand forecasting and dynamic pricing platform for airlines, raised a $90M Series B led by Battery Ventures (TC)

  • Samsara Eco, a startup replacing plastic packaging with green alternatives, raised $65M in funding led by Temasek and Main Sequence (TC)

  • Health platform Function raised a $53M Series A led by a16z (PRN)

  • UroMems, a startup developing implantable mechatronics technology, raised a $47M Series C led by Crédit Mutuel Innovation (FN)

  • Data lakehouse platform Onehouse raised a $35M Series B led by Craft Ventures (TC)

  • Sensi.AI, a virtual care-monitoring platform for the elderly, raised a $31M Series B led by Insight Partners and Zeev Ventures (TC)

  • Rainforest, a startup embedding payments into other software platforms, raised a $20M Series A led by Matrix Partners (TC)

  • Climate X, a startup helping financial firms price the climate change impacts on physical assets, raised an $18M Series A led by GV (TC)

  • Ario, an AI-powered assistant for parents, raised a $16M seed round led by Wing Venture Capital, Floodgate, BCV, and more (BW)

  • Crypto market maker Crossover Markets raised a $12M Series A led by Illuminate Financial and DRW Venture Capital (PRN)

  • HydroX AI, an AI safety and security platform for LLMs, raised a $4M angel round led by Vitalbridge Capital and Atom Capital (PRN)

  • Viio, a software license management platform, raised a $3.3M round led by North Ventures (EU)

IPO / Direct Listings / Issuances / Block Trades

  • Musk's SpaceX launched a tender offer at a $210B valuation (BBG)

  • Storage and logistics REIT Lineage filed for a potential $3B IPO (BBG) 

  • E-comics company Webtoon Entertainment expects to price its $315M IPO at the top of a marketed range (BBG) 

  • Clinical stage biotech Zenas BioPharma plans to raise over $150M in a US IPO (BBG) 

  • Bain-backed Japanese chipmaker Kioxia plans to file for a Tokyo IPO after postponing a 2020 IPO that targeted a ~$13B valuation (RT)

Debt

  • Carlyle and KKR won an auction for a $10B student loan book from Discover Financial (FT)

  • Spanish football club Real Betis is nearing $128M debt refinancing in a deal arranged by Goldman Sachs (BBG) 

Bankruptcy / Restructuring / Distressed

  • Sri Lanka reached a restructuring agreement for $5.8B of debt to end default (FT)

  • A rescue bid for troubled French tech group Atos led by its largest shareholder Onepoint collapsed (BBG) 

Fundraising

  • Goldman Sachs Asset Management raised $3.4B to acquire stakes in private real estate funds (WSJ) 

  • German investment firm DTCP raised $450M across its third growth fund and early-stage fund / Porsche JV (TC) 

  • Blackhorn Ventures raised $150M for its third fund to invest in early stage digital infrastructure and energy startups (AX) 

Crypto Corner

  • Crypto market maker GSR Markets named Rosenblum and Song as co-CEOs (BBG)

  • Trump is expected to speak at the Bitcoin 2024 convention in July (AX)

  • A Florida man was convicted for stealing millions in crypto at gunpoint (FR)

Exec’s Picks

If you're currently a junior banker looking to break into the buy side, lateral to another investment bank, or consider new paths amid changing market dynamics, it's time you check out Litney Partners, a partnership between Litquidity and Whitney Partners (the oldest purely financial services executive search and consulting firm).

We aim to place strong candidates across private equity, hedge funds, venture capital, growth equity, debt funds, and investment banking.

To get started, simply head over to Litney Partners and create your profile by dropping your resume / filling out the form:

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