VC Megafunds are Back

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Litquidity Capital
October 25, 2024

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Good Morning,

Finance-sector harassment is a growing problem in London, BlackRock is standing up to stake ownership regulations, Southwest reached a deal with Elliott, lawyers are getting rich off the M&A recovery, and General Catalyst hauled in $8B in new funds, reminiscent of the Covid-era VC frenzy.

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Let's dive in.

Before The Bell

As of 10/24/2024 market close.

Markets

  • US stocks rose yesterday as investors continued to digest corporate earnings

    • S&P snapped a three-day losing streak 

  • US 1Y CDS spreads widened to 49 bps, the highest in a year

Earnings

  • Southwest beat Q3 EPS and revenue estimates but their stock fell 5% upon averting a proxy fight with activist Elliott; Elliott will get six board seats but CEO Bob Jordan will remain (CNBC) 

  • American Airlines posted a Q3 loss but reported record revenue and raised its FY profit forecast on success in its sales strategy shift from this year (CNBC) 

  • UPS rose 5% after beating Q3 earnings estimates thanks to rebounding volumes and effective cost controls (CNBC) 

  • KKR beat Q3 EPS estimates as fee earnings rose 79% to a record $1B (BBG)

  • Full calendar here

🇺🇸 Election Forecast

As of 10/24/2024.

  • Trump continues to lead by 20% on Kalshi. Get $20 to trade the election when you deposit $100 or more. See live odds and bet now!

Headline Roundup

  • Bankers see tepid investments amid elections, geopolitical uncertainty (RT)

  • Rate cuts to accelerate US banks' move to higher-yielding investments (RT)

  • Europe's economy is poised to fall further behind US (FT)

  • Putin's alternative to 'weaponized' dollar fails to excite BRICS partners (FT)

  • BlackRock leads opposition to new US limits on bank ownership (FT)

  • GenAI accounts for 40% of all VC investment in cloud (CNBC)

  • Partner pay at top US law firms jumped to record $1.4M (FT)

  • Finance sector bullying/harassment claims rose 71% in UK since Covid (FT)

  • UK will change fiscal rules to help fund $26B of annual investment (FT)

  • Wells Fargo may lose $3B on office CRE loans (RT)

  • UBS migration of Credit Suisse clients will take 18 months more (RT)

  • DE Shaw now supports activist Mantle Ridge in Air Products board fight (RT)

  • Chinese EV and self-driving firms are turning to IPOs for cash (FT)

  • Wealthy investors turned more cautious on art last year (RT)

  • Morgan Stanley named CEO Ted Pick as chairman (WSJ)

  • Jupiter vetoes handing fund to star manager Ben Whitmore (FT)

  • OpenAI disbanded another safety team (CNBC)

  • Nvidia CEO Jensen Huang's 'Jensanity' continued in India (RT)

  • Boeing workers rejected a new labor contract (CNBC)

  • TSMC's US chip yields surpass Taiwan in win for US push (BBG)

  • US approved a mega lithium project in push against China (FT)

  • CEO of Australia's largest tech group quit after reports on private life (BBG)

  • Intel wins 15-year fight to scrap $1.1B EU antitrust fine (WSJ)

  • Ireland fined LinkedIn $335M over privacy violations (WSJ)

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Deal Flow

M&A / Investments

  • The management of Canadian security services firm GardaWorld is close to acquiring most of BC Partners's 51% stake at a $9.8B valuation

  • A US judge blocked Coach-owner Tapestry's merger with Michael Kors-parent Capri

  • Building materials firm Quikrete approached $7.6B-listed peer Summit Materials about a potential takeover

  • Allianz is weighing a merger or partial sale of its Allianz Global Investors unit at an $4.3B valuation, including debt

  • WWE-owner TKO Group will acquire three sports businesses Professional Bull Riders league, On Location, and IMG from entertainment conglomerate Endeavor Group for $3.3B stock

  • Brazilian meatpacker JBS and Mexico's Sigma Alimentos are among firms competing to acquire Kraft Heinz's meats and cold cuts business Oscar Mayer, which could fetch ~$3B

  • Blue Owl's co-CEOs Doug Ostrover and Marc Lipschultz will acquire a controlling stake in NHL team Tampa Bay Lightning at a $1.8B valuation

  • KKR will acquire a 25% stake in Italian oil major Eni's biofuel unit Enilive for $3.2B  

  • Keurig Dr Pepper agreed to acquire GHOST energy drink for over $1B

  • Swedish gaming operator Cherry is exploring a sale of its online casino and sports betting unit ComeOn at a $648M valuation

  • Blackstone is making a $288M preferred equity investment in energy storage and solar company Pine Gate Renewables

  • Endeavor is exploring a sale of some of its high-profile events businesses

  • State-owned China Tourism Group is considering a potential deal for some of China's most iconic theme parks run by Haichang Ocean Park

  • 3M's healthcare spinoff Solventum is exploring a sale of its purification and filtration unit

  • Intel-backed blockchain firm R3 is exploring a sale

VC

  • Second-hand fashion marketplace Vinted sold $367M in secondary shares at a $5.4B valuation led by TPG 

  • Finix, a payments fintech aiming to rival Stripe, raised a $75M round led by Acrew Capital 

  • Concentric, a startup helping enterprises track sensitive data, raised a $45M Series B led by Top Tier Capital Partners and HarbourVest 

  • Nooks, an AI sales assistant platform, raised a $43M Series B led by Kleiner Perkins

  • Healthcare AI startup Tennr raised a $37M Series B led by Lightspeed 

  • Urbint, an AI platform to identify and mitigate infrastructure threats, raised a $35M growth investment from S2G Ventures

  • Attention, a platform to transform customer conversations into actionable insights, raised a $14M Series A led by Alven 

  • Patient consent management solutions startup HealthEx raised a $14M seed and Series A led by General Catalyst

  • Planetary Technologies, an ocean-based climate tech, raised an $11.4M Series A led by Evok Innovations 

  • Packing management platform Recyda raised a $6.9M Series A led by Cusp Capital 

  • Dash Bio, a tech-enabled services for drug development, raised a $6.5M seed round led by Freestyle Capital 

  • Custom EV car maker RBW raised a $6M round from Meson Capital Partners 

  • OLOID, a workplace technology for access and identity management, raised a $6M Series A1 led by Yaletown Partners, Exposition Ventures, and more

IPO / Direct Listings / Issuances / Block Trades

  • Indian food delivery startup Swiggy downsized its IPO valuation from $15B to $12.5B-$13.5B

  • Swiggy-rival Zomato plans to raise $1B in an institutional share sale

  • Chinese logistics giant SF Holding is targeting a second listing in Hong Kong that could raise $1B

  • Carlyle-backed X-ray device manufacturer Rigaku raised $738M in Japan's second-largest IPO this year

SPAC

  • Maius Pharmaceutical will merge with DT Cloud Acquisition Corp. in $250M deal

Debt

  • Data center firm Cologix raised $1.5B in debt and equity to fund growth

  • Canada's PE-owned Gateway Casinos & Entertainment is seeking $1.3B in private credit to refinance loans and fund a dividend recap  

Bankruptcy / Restructuring / Distressed

  • A group of Thames Water creditors proposed an alternative $3.9B litquidity package to give the troubled UK water utility time to seek a restructuring

  • Spirit Airlines sold jets for $519M to boost cash as bankruptcy looms

  • Marblegate Asset Management is in discussions with regulators about a takeover of insolvent NYC taxi insurer American Transit Insurance's assets

Fundraising

  • VC General Catalyst raised $8B to invest in early-stage startups globally

  • Cox Enterprises' Socium Ventures closed its second fund at $300M

  • Alternative assets fintech iCapital is raising $200M for a private credit fund

  • Hedge fund Millennium is considering a fund focused on less liquid assets

Crypto Corner

  • Crypto exchange Kraken plans to launch a blockchain for decentralized apps (BBG)

Exec’s Picks

Financial Services Recruiting 💼

If you're a junior banker looking for your next career move, check out Litney Partners, a recruiting firm established by 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, credit, and investment banking.

We're currently seeking talent for some incredible roles. Head over to Litney Partners to drop your resume / create your profile and we'd love to get in touch!

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