Good Morning! It was a rough year to be a short seller - they’ve lost $178 billion so far in 2023. We could see a potential Hollywood blockbuster deal with Warner Bros and Paramount flirting with a merger. Big banks are copying moves from the private credit playbook. Plus Mark Cuban’s jargon pet peeves, and the 12 must-read books for entrepreneurs in 2024.

Steady cash flows and inflation resilience–unlock this (and more) with MAG Capital Partners, your guide to the industrial real estate market.

_{SQUEEZ OF THE DAY}

Dealmaking Dry Spell

2023 just hit us with the worst dealmaking drought in over a decade. 

M&A transactions took a nosedive to about $2.7 trillion in total volume, down from about 25% from last year. This is the lowest level since 2013, the last year total dealmaking couldn’t muscle past the $3 trillion mark. 

The lack of private equity deals has been a major driving factor. It’s harder than ever to snag debt financing, so buyout firms have spent 36% less cash than they did in 2022.

And we might have gotten our hopes up this summer, with high-profile IPOs like Cava and Arm, as well as oil mega mergers like Exxon throwing $60 billion at Pioneer. But that M&A enthusiasm is looking misplaced. It turns out the mergers were more industry specific to oil & gas - high interest rates and geopolitical tensions made striking big deals an afterthought for most major companies.

Takeaway: For all you investment bankers out there, brace yourselves for another rough bonus season - and even job cuts if things don’t turn around in 2024. But there's a glimmer of hope on the horizon - traders are betting that we're riding the peak of those rate increases. So, borrowing money might just get a whole lot easier come 2024.

_{PRESENTED BY MAG CAPITAL PARTNERS}

Investors: Follow This $2.4T Breadcrumb Trail

While most investors toe the line with standard markets, the savvy among us have zeroed in on what some experts call “the backbone of the American economy.”

Welcome to Industrial real estate (IRE). 

The global supply chain disruption of 2020 revealed a clear need for domestic manufacturing solutions, fueling massive demand in the US. 

While inflation riddled other sectors, IRE remained resilient, delivering instant cash flows, inflation protection, and asset appreciation for investors. 

But here’s the kicker: Not all IRE investments are the same. MAG Capital Partners have over 50 year’s experience of accessing off-market investments that deliver consistent yields (while minimizing risk).

Don’t wait–unearth the industrial real estate market with MAG Capital Partners today.

_HEADLINES

Top Reads

• Short sellers lost close to $178 billion in 2023 (YF)

• Citi will close its global distressed debt unit (CNBC)

• Apple’s $1 trillion rally will be tough to live up to in 2024 (YF)

• How private credit works and why Wall Street wants to join the business (BB)

• The misery index says the worst is over (Axios)

• Chick-Fil-A is stronger than ever amid more competition (CNBC)

• How Jefferies muni boss built a powerhouse while others scaled back (YF)

• Warner Bros in talks to merge with Paramount (Axios)

• Big companies will raid government for future CEOs (Reuters)

_{CAPITAL PULSE}

Markets Rundown

Stocks rebounded after Wednesday was the worst day for markets since October.

Movers & Shakers

• (+) Micron ($MU) +9% after the semiconductor company posted Q4 results.

• (+) CarMax ($KMX) +5% after the car retailer posted a revenue beat.

• (–) BlackBerry ($BB) -13% after lower-than-expected Q4 revenue.

Private Dealmaking

• Prada bought its NYC Fifth Avenue store for $425 million

• GreyOrange, a warehouse robotics startup, raised $135 million

• J.C. Flowers invested $125 million into CFG Bank

• Vestwell, a savings and investment platform, raised $125 million

• Insight Partners invested $92 million into Employer Direct Healthcare 

• Zuper, a customer engagement software provider, raised $32 million

_{BOOK OF THE DAY}

Mind Shift

Throughout his thirty years of work as a mindset expert and leadership coach, Erwin Raphael McManus has been obsessed with these questions:

Why do some people succeed despite having all the odds stacked against them? How do others achieve the unthinkable, only to watch their lives slip away? Are there mental structures for failure and success?

McManus has come to realize that too many of us have “near-life” experiences. We almost pursue our dreams. We almost make the decision that changes everything. We are always one choice away.

If we want to live without regret, we need to make a mind shift—trading beliefs that limit our potential for ones that help us move toward optimal performance and pursue the success of being fully alive. We must move from a life of obligation to a life of intention.

In Mind Shift, McManus brings together twelve mental frameworks that have helped some of the most accomplished people on earth create internal structures of success.

“This book will transform the way you think, act, and live.”

_{DAILY VISUAL}

Projected GDP Growth Rate for Select Economies

2022 actuals, 2023-24 projected

_{DEAL OF THE WEEK}

A Well Cultured Deal

Name a better way to start off your morning than a nice Chobani Greek yogurt and a cup of coffee. Well, Chobani is making that dream come true.

Last week, Chobani announced that it was going to acquire ready-to-go coffee maker La Colombe for $900 million to further expand its beverage business.

Chobani will use a $550 million term loan and cash on hand to acquire Keurig Dr. Pepper’s stake in the Philly based coffee company. Keurig Dr. Pepper (another one of those combinations that doesn’t make a ton of sense) invested $300 million into La Colombe over the summer, making this a pretty quick return of capital for them. While they aren’t in the investment business, certain PE managers have to be wondering how they got beat at their own game.

A lot of the beverage business is a distribution game. That was the benefit of the KDP investment back over the summer, allowing La Colombe to sell through its network, and is the rationale for the acquisition here. Given how hard distribution is, it makes sense that Chobani would look to add La Colombe to its distribution network to help achieve some economies of scale.

La Colombe employees will stand to gain some from the transaction as ~2,000 employees received ~10% ownership in the Company back in 2016. Going forward, La Colombe will continue to operate as an independent brand under the Chobani umbrella.

For more M&A news, sign up for our deals newsletter Buysiders.

_{DAILY ACUMEN}

Your Authentic Self

Ever dreamed of being someone else? Maybe a surfer, a writer, or a lawyer? We often chase identities, but the reality might not match the dream.

Many pursue identities for the image, not the love of the work. Being a writer sounds cool, but the grind involves sweat and tears.

The courage? Letting go of false personas. Admitting you don't love what you're doing just for the image is tough. It's okay not to know who you are or what you want.

So, ask yourself: What are you doing for an image, not joy? Identifying these areas frees you from unnecessary friction. Let go, find joy in true passions, and embrace your authentic self.

Remember, real richness lies in wanting what aligns with you, not what society expects. Be you, authentically.

_{ENLIGHTENMENT}

Short Squeez Picks

• 5 steps to transform your leadership from within

• Considerations when selecting an investment banker

• Mark Cuban’s least favorite corporate jargon word

• 12 books every entrepreneur should read in 2024

• How to develop future leaders in your organization

_{MEME-A-PALOOZA}

Memes of the Day