Together with

Good Morning,

A record number of PE firms are turning into zombie funds, PE firms are already targeting tertiary deals, Fannie and Freddie got their first Wall Street buy rating, US stocks indexes extended their record run, and OpenAI and Microsoft reached a deal to pave way for OpenAI's for-profit restructuring.

The same VCs who invested in eBay, Uber, and Venmo before they got big are now backing another up-and-comer: Pacaso. Founded by a former Zillow exec, Pacaso brings co-ownership to the $1.3T vacation home market. And you can invest in Pacaso as a private company today. Check out the offering.

Let's dive in.

Before The Bell

Click here to learn more about the Litquidity portfolios and subscribe to the strategies on Autopilot.*

Markets

• All three major US stock indexes rose to new ATHs on inflation data that all but guaranteed Fed rate cuts to resume

• China's CSI 300 index jumped 2.3% to a new ATH in its best day since March on AI optimism 

• Japan's Nikkei 225 index rose for a third-straight day to a fresh ATH

• South Korea's KOSPI index hit a third-straight ATH 

  • The index is up 41% as Asia's best performer YTD

• Taiwan's TAIEX index hit a fresh ATH 

• Europe's Stoxx aerospace and defense index surged 2.5% to an ATH

• US Treasury yields hit YTD lows as traders priced in rate cuts

  • US 10Y yield fell below 4% for the first time since April

  • US 5Y yield fell to 3.6% to its lowest level in one year

• China yields hit YTD on inflation optimism

  • China 30Y yield rose 8 bps to 2.21%

  • China 10Y yield rose to 1.82%

• Indonesia's yield curve steepened to 114 bps to the the most since 2023 on fiscal fears

• Gold surpassed its inflation-adjusted record high set 45 years ago

Earnings

• Kroger issued a Q2 beat-and-raise on 3.4% identical sales growth driven by price cuts, private-label strength, resilient at-home food demand, and low tariff exposure, and announced plans to boost store openings by 30% in 2026 (RT)

• Adobe beat Q3 earnings and revenue estimates on strong digital media sales driven by AI adoption; the firm raised FY digital media growth guidance to 11.3% while reaffirming Q4 guidance above estimates (CNBC)

• Full calendar here

Prediction Markets

• Traders locked in rate cut bets despite a slight uptick in inflation.

• Trade your predictions on a range of events, only on Kalshi. Sign up with code LIT and get a $20 bonus when you trade $100.

Headline Roundup

• US CPI ticked up slightly to 2.9% YoY (CNBC)

• US initial jobless claims jumped to the highest in four years (BBG)

• ECB held rates steady at 2% as tariff fallout lingers (CNBC)

• Record number of PE firms will turn into zombie funds this year (BBG) 

• Secondaries is emerging as an impact opportunity (NPM)

• US law firms bring distressed debt swap playbook to Europe (BBG)

• JPMorgan expects record US buybacks spree to increase further (BBG)

• Fannie and Freddie got their first Wall Street buy rating (BBG) 

• China's bond drop is luring large global funds back into market (BBG)

• Hong Kong will allow bond-funded buybacks (FT)

• Hong Kong stock ETFs see record China inflows on AI, biotech craze (BBG)

• Israeli VC fundraising fell to a record low (JP)

• OpenAI and Microsoft reached a deal to allow OpenAI to restructure (WSJ)

• JPMorgan will ramp up corporate banking hiring in APAC growth push (RT)

• Alibaba and Baidu begin using own chips to train AI models (TI)

• Apple is warming to idea of $2k iPhones (BBG)

• Dubai's housing boom is stoking fears of another crash (BBG)

• Novo Nordisk told staff to RTO full-time amid revival effort (RT)

• UK is coaching small firms to compete with Big Four audit (FT)

• US charged an ex-Two Sigma quant with fraud (BBG)

• SEC will drop its case against ex-Nikola CEO Trevor Milton (BBG)

• Brazil sentenced ex-president Bolsonaro to 27 years for plotting a coup (FT)

• Job seeker pessimism is at a decade-low (WP)

A Message from Pacaso

Major investors bet big on this "unlisted" stock

When the former Zillow exec who sold his last company for $120M starts a new venture, people notice. Take some of the early investors in Uber, Venmo, and eBay. They're each investing in Pacaso.

Disrupting the real estate industry once again, Pacaso's streamlined platform offers co-ownership of premier properties, revamping the $1.3 trillion vacation home market.

And it works. By handing keys to 2,000+ happy homeowners, Pacaso has already made $110m+ in gross profits in less than 5 years. They even recently reserved the Nasdaq ticker PCSO.

And you can join them as an investor for just $2.90/share. But there’s no time to waste.

Become a Pacaso shareholder before the investment opportunity ends tomorrow night.

This is a paid advertisement for Pacaso's Regulation A offering. Please read the offering circular at invest.pacaso.com. Reserving the ticker symbol is not a guarantee that the company will go public. Listing on the Nasdaq is subject to approvals.

Deal Flow

M&A / Investments

• $17B-listed media giant Paramount Skydance is preparing a bid for $40B-listed Warner Bros. Discovery

• PE firms Carlyle, EQT and HongShan Capital are among final bidders preparing offers for a controlling stake in Starbucks' China business, which could fetch a ~$5B valuation

• PE firm GTCR agreed to acquire generic drugmaker Zentiva from PE firm Advent for $4.8B

• A consortium of investors led by ICG acquired a stake in infrastructure services group Infra Group from European PE firm PAI Partners at a $3.5B valuation

• Singapore SWF GIC and Abu Dhabi SWF ADIA invested $1.6B in Vantage Data Centers

• Indian mining and mineral processing gear manufacturer Tega Industries agreed to acquire US mining equipment maker Molyop from American Industrial Partners at a $1.5B valuation

• GIC and Asian VC Peak VX Partners are weighing a stake sale of Indonesian coffee chain Kope Kenangan at a $1.2B-$1.4B valuation

• Carcetti Capital agreed to acquire the Hemlo Gold Mine from Barrick Mining for $1.1B including cash and earnout

• GIC is weighing increasing its 35% stake in Blackstone-backed Spanish hotel business Hotel Investment Partners

VC

• OpenAI's for-profit restructuring will grant over $100B in equity to its controlling non-profit arm

• AI-powered search startup Perplexity raised $200M at a $20B valuation

• UK fintech Starling Bank plans to sell secondary shares at a $5.4B valuation

• Torus, a hybrid energy technology company, raised $200M in funding from Magnetar

• Mojo Vision, a startup working on micro-LED technology, raised a $75M Series B led by Vanedge Capital

• Diana Health, a startup working with hospitals to improve women's health programs, raised a $55M Series C led by HealthQuest Capital

• Brain Co., a startup helping enterprises and governments deploy AI, raised a $30M Series A led by Gil Capital and Affinity Partners

• Clockwork, a software-driven fabric company for AI and high-performance workloads, raised a $20.5M round led by NEA

• Brilliant NextGen, a smart home control technology startup, raised a $9.7M round led by Almeida Strategic Investments and Tyrod Taylor

• ONEiO, an automation-first enterprise IT integration platform, raised a $9.4M Series A led by Bocap

• Multimodal medical AI startup Sophont raised a $9.2M pre-seed / seed round led by Kindred Ventures

• Italian fintech platform Tot raised na $8M pre-Series A led by CDPQ

• Lōvu Health, a digital maternal health platform, raised an $8M Series A led by SJF Ventures

• NewDays, a digital health startup focused on cognitive care, raised a $7M seed round led by General Catalyst and Madrona

• Quack, a proactive AI platform for customer support, raised a $7M seed round led by Hanaco Ventures and Storytime Capital

• HR performance management platform Klaar raised a $5M Series A led by Prime Venture Partners

IPO / Direct Listings / Issuances / Block Trades

• Tata Capital,  the financial services unit of Indian conglomerate Tata, is seeking to raise $1.9B at an $18B valuation in what could be India's biggest IPO in a year

• Online e-commerce company SMG Swiss Marketplace is seeking to raise $1.1B in what could be Europe's biggest IPO this year

• Blockchain-based lender Figure raised $787.5M for a $7.6B valuation in its US IPO

• Blackstone-backed engineering and maintenance services provider Legence raised $728M at $2.85B valuation in its US IPO

• Singapore's Centurion Accommodation REIT is seeking to raise $601M at a $1.1B valuation in Singapore's second-biggest IPO this year

• Crypto exchange Gemini raised $425M at a $3.3B valuation in an IPO that was 20x oversubscribed

• Coffee chain Black Rock Coffee Bar raised $294M at a $956M valuation in its US IPO

• New York-based LB Pharmaceuticals raised $285M at a $302M valuation in its US IPO

• Finland is considering raising $117M-$176M at a $350M-$470M valuation in an IPO of postal service Posti Group

• Swedish financial services group NOBA announced plans for a Sweden IPO

SPAC / SPV

• Avalanche Foundation, the non-profit group behind prominent Wall Street blockchain Avalanche, is in talks to raise $1B for two cryptocurrency-hoarding vehicles in US

• Independent film studio Angel Studios rose 70% in its trading debut after merging with Southport Acquisition Corp. at a $1.6B valuation

Debt

• AI cloud provider Nebius raised $3.75B in a convertible notes and stock offering following a massive contract with Microsoft

• China's Alibaba Group raised $3.2B in the biggest convertible notes offering this year to fund cloud growth and expansion

• JPMorgan and Deutsche Bank are providing $879M of debt financing to back Apollo's $2.3B acquisition of German cooling equipment maker Kelvion

• Blackstone agreed to purchase $870M performing single-tenant lease financing loans from First Internet Bancorp

• Blackstone is nearing an $800M private credit deal for safety-products maker Justrite Safety Group

• French PE firm Wendel raised $590M in a bond sale without requiring market stabilization measures

• Chinese data center firm Zdata Technologies is seeking a $500M private loan

Bankruptcy / Restructuring / Distressed

• Liquidators for collapsed Chinese developer Evergrande received bids for a 51% stake in its $1.3B property services arm

Fundraising / Secondaries

• PE firm Veritas Capital raised $14.4B for its ninth flagship fund focused on companies at the intersection of government and tech

• Carlyle's FOF unit AlpInvest plans to raise another $5B PE portfolio finance fund

• PE firm Aurora Capital Partners raised $2.1B for its seventh mid-market fund

• Real estate investment firm The Milestone Group raised $1.1B for its sixth fund

• Yasuto Monden, a Japanese activist investor, who once took over as president of a target company, launched a $680M equity fund Axium Capital focused on undervalued Japanese small and mid-caps 

• A Macquarie climate fund raised a $660M commitment from Australia's second-largest pension Australian Retirement Trust

• French VC Quadrille Capital raised $590M across several primary and secondaries funds targeting growth companies in US and European technology sectors

• European growth investor Quadrille Capital raised $586.3M for its latest fund targeting US and European tech companies

• Ex-Cinven partner Caspar Berendsen's Netley Capital raised $315M for a targeted $600M tertiary PE fund

• EM-focused healthcare PE firm TVM Capital Healthcare raised $150M for a new Southeast Asia fund

Crypto Sum Snapshot

• Wall Street's race for stablecoin talent sends pay soaring

• BlackRock seeks to tokenize ETFs after Bitcoin fund breakthrough

• SEC delayed decisions on multiple crypto ETFs

Check out our Crypto Sum newsletter for the full stories on everything crypto!

Exec’s Picks

• Want to earn up to $200/hr in easy side income? Mercor is looking for people with IB, PE, equity research, and Big 4 accounting experience to train AI models for the largest research labs in the world. The work is remote and async, so you can earn in your spare time. They are also offering $1,000 referral fees for intros to qualified folks. Learn more.

• Daisy Zhao and Olivia Moore of a16z tested dozens of AI-native apps, from horizontal do-it-all agents to deep vertical specialists. Here's what they found about which tools actually work.

• WSJ interviewed various VC-backed AI founders to get a glimpse into the work ethic required to succeed. The common theme: Few laptops, no sleep, no booze, and no fun.

Finance & Startup Recruiting 💼

Litney Partners

Featured role(s):

BlueFlame AI – Product Strategists (New York, NY):

• BlueFlame is seeking two Product Strategists, one focused on investment banking and another focused on private equity

• The product strategy team bridges the capabilities of the technology they build with domain-specific needs and expectations of their clients

• The ideal candidates will have between 3-5 years of front office experience at top-tier IB / PE firms

• Opportunity for junior bankers or PE investors to break into the AI technology field

• Competitive base of $175k-$200k + bonus and benefits

Meme Cleanser

🛒 Merch Store: Visit our merch store to shop our latest apparel, shoes, bags, accessories and more. 

💵 Litquidity Ventures: Accredited investors & qualified purchasers within the Litquidity community can gain access to alternative investments such as venture, late-stage growth, and private equity through Litquidity Ventures. Interested? Fill out this form.

☎️ Book a call with Lit: Want to pick Litquidity's brain on business advice, insights, or just chat to say what's up? Buy his time here.

📧 Launch your own newsletter: Have great content ideas and looking to launch your own publication? We highly recommend Beehiiv to get started.

*DISCLAIMER: Investment advice provided by Autopilot Advisers, LLC ("Autopilot"), an SEC-registered investment adviser. Past performance does not guarantee future results. Investing carries risks, including loss of principal. As always, be smart out there. Litquidity is compensated to promote AutoPilot. Compensation details available upon request.