Good Morning! Citadel is taking a minority stake in Wolfe Research to win more institutional trading flow. A Miami condo project sold $1.7 billion of units before breaking ground, including two ~$50 million penthouses. And Blue Owl capped redemptions at 5% after investors asked to pull 39% of its Technology Income Corp. over AI fears.

Anthropic has been lobbying the Vatican to consider AI consciousness. Millennium was flat in September but is still up 8.1% this year. And NYC's Chip City is abruptly closing all its locations after years of rapid growth.

Plus: Sweden's young men have found their Wolf of Wall Street, private equity's buyout firms are facing a tough new reality, and how to spot someone who's truly secure.

Reverse engineer your buyouts with Mosaic’s Reverse LBO. See it in action. 

SQUEEZ OF THE DAY

$21M/Year For an Office

The company that just agreed to the highest office rent in New York City history is a small hedge fund with 35 employees that you’ve probably never heard of.

Castle Hook Partners reportedly agreed to pay as much as $21.2 million a year for the top two floors of the new 625 Madison Avenue tower, which is scheduled to open in 2029. For between $350 and $400 per square foot, the fund will get 53,000 square feet of penthouse space with wraparound terraces, private dining and panoramic views of Central Park. The deal smashes the previously reported NYC office-rent record of $327.50 per square foot set earlier this year.

The firm might fly under-the-radar, but was founded in 2016 by former Soros Fund Management investor David Rogers, and Stanley Druckenmiller was one of its earliest backers. A decade later, Castle Hook manages roughly $11 billion and is coming off an absurd two-year run, reportedly returning around 50% last year after gaining more than 60% in 2024.

For a firm with just 35 employees, 53,000 square feet is an absurd amount of office space. At its current headcount, Castle Hook would have roughly 1,500 square feet per employee and spend more than $600,000 a year in rent for each of them. But that extravagance makes a little more sense when you consider the arms race for the best investing talent. 

Citadel, Millennium and Point72 already compete for top portfolio managers with state-of-the-art offices and increasingly ridiculous perks. So if Castle Hook wants to lure someone away from one of the industry giants, a brand-new Madison Avenue penthouse with private dining, wraparound terraces and Central Park views probably doesn’t hurt. When a great portfolio manager can oversee billions of dollars and generate tens or hundreds of millions in profits, suddenly spending $21 million a year on the office starts to look a little less insane.

New York’s office market might still have plenty of problems, but 625 Madison is a sign that Wall Street firms will still pay top dollar to be there. General Atlantic will anchor 625 Madison with five floors of its own, and the building’s developer, Related, expects it to be 67% leased by year-end. Related actually bought the site to build luxury condos before deciding there was an even better opportunity in ultra-high-end offices. 

Takeaway: New York’s office market is looking pretty K-shaped in 2026. For all the struggling, aging office towers struggling to fill space, the brand-new trophy buildings in the best locations are commanding record rents. And as absurd as spending $21 million a year on an office sounds, it’s just a drop in the bucket if Castle Hook can recruit and retain a top portfolio manager. So in 2026, the top hedge funds aren't just competing on comp anymore: the office, the amenities, and even the Central Park view are now part of the recruiting package.

PRESENTED BY MOSAIC

Reverse LBOs are Here

Higher financing costs and tighter return thresholds have made entry price more consequential than ever. Buyers have less room for error, while bankers increasingly need to understand how far sponsors can stretch on valuation in a live process.

Mosaic’s new Reverse LBO helps answer that question quickly.

Enter a target IRR or MOIC, and Mosaic works backward to calculate the maximum purchase price, entry multiple, or bid premium that supports the required return. As growth, margins, leverage, financing costs, or other assumptions change, the answer updates automatically.

For bankers, that means a faster way to frame sponsor bid capacity, pressure-test valuation, and run scenarios during a process. For PE teams, it means quickly understanding how much they can pay while still preserving target returns.

See a Reverse LBO in action.

HEADLINES

Top Reads

• Citadel Securities buys stake in Wolfe Research for trading flow (BB)

• Miami project sells $1.7 billion of apartments before it's built (BB)

• Blue Owl again caps two BDCs after 39%, 17% withdrawal requests (BB)

• Anthropic has been aggressively lobbying the Vatican to consider AI consciousness (Futurism)

• Millennium saw zero return in volatile September for hedge funds (BB)

• Astoria-born Chip City announces sudden closure days after former CEO sues (Gothamist)

• Sweden's young men have found their Wolf of Wall Street (BB)

• Private equity's buyout firms are facing a tough new reality (BB)

• Blackstone invests $1 billion to launch Falcata defense company (YF)

• Bain is said to explore investment in Hong Kong's New World (BB)

• Goldman reaps windfall from cut of clients' early SpaceX bets (BB)

• Private capital is reshaping Hollywood moviemaking (CNBC)

• U.S. adds 29,000 jobs in September, unemployment edges up (Axios)

• Nike shares tumble after weak revenue outlook and layoff plans underway (CNBC)

• Amazon seeks to move $8 billion of chips off its books, FT says (BB)

• Big Short's Michael Burry leads group suing to block Silicon Valley housing project (BB)

• Apax sets $13.5 billion target for Fund XII (WSJ)

• Venture investment slows nationwide, in SF in Q3 (SF Examiner)

• How a top diabetes nonprofit reined in its venture capital arm (WSJ)

• Change.org leans into AI with $100 million investment (Axios)

CAPITAL PULSE

Markets Rundown

Market Update

• Stocks rose on the September jobs report, with all S&P 500 sectors except healthcare higher; the Nasdaq closed near its record high.

• The 10-year Treasury yield ended near its highest level since 2002 after an early drop reversed.

• Oil fell about 1.5% as the G7 will release up to 100 million barrels of emergency oil and diesel stocks; Nike fell more than 3% on weak guidance.

Economic Data

• Nonfarm payrolls rose 29,000 in September versus 90,000 expected, with prior two months revised down a combined 60,000.

• Unemployment edged up to 4.2% from 4.1% on higher labor force participation; wage growth slowed to 3.0%.

• The softer data reduces pressure on the Fed to hike in October.

Year-End Outlook

• The S&P 500 is up 13% year to date and sits just 1.5% below its all-time high; small-caps fell 5% in September.

• Third-quarter earnings season begins with the major banks in mid-October.

• Corporate profits are on track to grow roughly 30% this year.

Movers & Shakers

• (+) SpaceX ($SPCX) +7% after three launches in 13 hours and Google's first orbital AI experiment.

• (+) Tesla ($TSLA) +5% because of strong vehicle delivery numbers and continued investor enthusiasm.

• (–) Nike ($NKE) -4% after issuing a weak fiscal 2027 sales outlook that overshadowed a fiscal Q1 earnings beat.

Prediction Markets

• At roughly 5.3%, the 10-year is the highest it's been since 2002. Money is expensive.

• Trade on real-world events with Kalshi. Use code OWS to get a $10 bonus when you trade $10.

Private Dealmaking

• Reverion, a German developer of carbon-negative power plants, raised $175 million

• Supabase, a provider of backend tools for building AI apps, raised $150 million

• Homeward, a cash-back real estate financing company, raised $120 million

• TriGemX Bio, a developer of migraine treatments, raised $94 million

• Volantis, an inference semiconductor company, raised $88 million

• Fortem Technologies, an airspace security company, raised $50 million

For more PE, VC & M&A deals, subscribe to our Buysiders newsletter.

BOOK OF THE DAY

The Outsiders

Description:
William N. Thorndike Jr. examines eight CEOs who achieved extraordinary shareholder returns by rejecting conventional management wisdom and focusing relentlessly on capital allocation. Rather than celebrating charismatic leadership or rapid revenue growth, Thorndike highlights executives such as Warren Buffett, John Malone, Katharine Graham, and Henry Singleton, whose success came from making rational decisions about acquisitions, share repurchases, dividends, debt, decentralization, and the deployment of excess cash. The book's central lesson is that exceptional CEOs often behave more like investors than traditional managers. Their advantage comes from thinking independently, measuring performance over long periods, and allocating capital where it can generate the highest returns. It is one of the most influential books on capital allocation and a particularly useful framework for understanding how great businesses compound shareholder value.

Book Length: 272 pages
Release Date: October 23, 2012

Ideal For:
CEOs, CFOs, investors, private equity professionals, entrepreneurs, and anyone interested in capital allocation, corporate strategy, M&A, share buybacks, and building businesses that compound value over decades.

“The greatest CEOs don't simply run businesses well. They know exactly what to do with every dollar those businesses generate.”

DAILY VISUAL

10-Year Keeps Ripping

PRESENTED BY GRANOLA

Your Notes, in the Language of the Call

Coverage calls in London, a management meeting in Frankfurt, an LP update in Tokyo. Your week doesn't happen in one language, and now your notes don't have to either.

Granola, the AI notepad for people with back-to-back meetings, now supports 32 languages. Switch on multi-language mode once and Granola follows along, whether the call is in English, French, German or Japanese. You jot down what matters, Granola transcribes the meeting from your computer, then turns your notes into clear summaries, action items and next steps before your next call.

Download Granola and try it in your next meeting. Free month with the code SHORTSQUEEZ.

DAILY ACUMEN

Ergodicity

Take a coin flip where heads raises your wealth 50 percent and tails cuts it 40 percent. The average outcome per flip is a 5 percent gain, so the bet looks attractive. Play it repeatedly, though, and a typical player loses about 5 percent per round, because 1.5 times 0.6 is 0.9.

The gap exists because the average across many people is not the same as the average over one person's lifetime. A crowd can profit from the bet while almost every individual in it goes broke, since a few huge winners lift the group average.

You only get to live one path. Before taking any bet that looks good on average, ask what happens to you if the bad outcomes arrive early and you cannot play long enough to collect the average.

ENLIGHTENMENT

Short Squeez Picks

• Why emotional intelligence is a crucial leadership skill

• How to argue and win

• Should you try and catch up on sleep on the weekends?

• How to spot someone who’s truly secure

• Complexity is a unified cognitive kind

MEME-A-PALOOZA

Memes of the Day

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