Good morning! Powell’s Fed days might be numbered after Trump said he’s looking to replace him with Kevin Warsh as a likely successor. Trump also warned Elon Musk of "very serious consequences" if he funds Democratic candidates.

KKR co-founder Henry Kravis sold stock for the first time in five years. Meta is considering a $10 billion investment in AI startup Scale AI. Lululemon stock plunged in a historic rout as tariffs eat away at profits.

Plus: The nation’s largest pension fund recorded an 11.3% PE gain last year, women are slowly making C-suite inroads, and why quitting can be a leadership power move.

Discover how leading firms are using Hebbia to streamline research, diligence, and reporting.

SQUEEZ OF THE DAY

PE Distributions Are Clogged

Yale is quietly rewriting the endowment playbook it wrote in the first place. The $41 billion endowment, long seen as the gold standard of institutional investing, is preparing to sell $2.5 billion in private equity stakes, its first major move toward liquidity in decades.

Swensen’s “Yale Model” prioritized long-term illiquid investments like private equity and venture capital. The approach became gospel for universities across the country.

By 2024, U.S. higher ed endowments held an average of 56% of their assets in alternatives. Yale’s own portfolio delivered a 9.5% annualized return over the past decade, outperforming the 6.8% average for U.S. universities (S&P 500’s 12% return in the same period).

Now, with private equity distributions drying up and interest rates still elevated, institutions are rethinking their allocations. Political pressure is also mounting. A proposed GOP tax bill would increase endowment investment taxes from 1.4% to as high as 21% for schools like Yale, Harvard, and MIT, adding new urgency to liquidity concerns.

Yale’s portfolio sale (code-named Project Gatsby) is expected to go at a discount of less than 10%, with secondaries giants like Lexington Partners and HarbourVest circling. MIT, Notre Dame, and the University of Illinois are also weighing similar moves.

Despite the headline, Yale isn’t abandoning alternatives. It still holds over $20 billion in private markets, signaling a repositioning, not a retreat.

Takeaway: University endowments have been private equity’s biggest backers. If they’re rebalancing, it could mark a broader shift in the industry. The Yale model isn’t dead, but in a world where cash is king and uncertainty is rising, endowments are prioritizing flexibility and liquidity. Still, you can’t help but wonder: is Yale selling the dip?

HEADLINES

Top Reads

• Trump said he will soon replace Fed Chair Jerome Powell and named Kevin Warsh as a likely successor (MSN)

• Trump presses Powell for a full-point rate cut despite strong jobs report (CNBC)

• Musk blinks first in Trump feud that cost him $34B (YF)

• Trump says Elon Musk will face ‘serious consequences’ if he backs Democrats (CNBC)

• Henry Kravis sells KKR stock for first time in years (Barrons)

• Meta reportedly in talks to invest billions of dollars in Scale AI (TC)

• Lululemon stock plunges in historic rout as tariffs eat away at its profit (CNN)

• Private equity firm EQT to buy biomethane producer Waga (Axios)

• Goldman, Morgan Stanley, JPMorgan layoffs to hit northeast (YF)

• Calpers records 11% private-equity gain for 2024 (WSJ)

• Private equity in 401(k)s isn’t as smart as it seems (BB) 

• Businessman using Goldman name secured lucrative bankruptcy assignments (WSJ)

• Tesla Takedown protesters keep pressure on Elon Musk despite DOGE exit (CNN)

• Supreme Court allows DOGE to access Social Security data (CNBC)

• Private credit looks beyond buyouts as PE shops feel the chill (BB)

• Women slowly make C-suite inroads (LI)

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• Summarize 200+ earnings calls annually without breaking a sweat.

• Review offering memorandums 5x faster to keep pace with changing markets.

• Identify red flags, compare risks, and extract critical terms in minutes.

• Turn diligence notes into IC-ready investment memos.

Whether you’re tracking opportunities, managing risk, or drafting IC memos, Hebbia helps finance, real estate, and legal teams get more done in less time, without sacrificing quality.

CAPITAL PULSE

Markets Rundown

Market Update

• U.S. stocks closed higher Friday, boosted by a stronger-than-expected May jobs report. Nonfarm payrolls rose by 139,000, topping forecasts for 130,000, while the unemployment rate held steady at 4.2%.

• All 11 sectors of the S&P 500 finished in the green, led by energy and communication services.

• Bond yields rose, with the 10‑year Treasury yield ending at 4.50%, as markets interpreted the data to warrant a patient Fed.

• For the week, the S&P 500 gained about 1.5%, marking its fifth positive week out of the past seven.

Economic Data Highlights

• Nonfarm Payrolls (May): +139,000 vs. +130,000 expected; April/May totals revised down by 95,000.

•  Unemployment Rate (May): Held at 4.2% for the third consecutive month.

• 10‑year Treasury yield: Closed at 4.50%, up 8 bps from Thursday.

Reported Earnings

• No significant earnings reported on Friday, June 6.

Earnings Today

•  Casey’s General Stores (CASY) – Reporting June 9 (After Market Close): Investors focusing on comps in both fuel and convenience store segments.

Movers & Shakers

• (+) RocketLab ($RKLB) +9% after Musk backlash could lead to an opportunity if SpaceX retreats.

• (–) Docusign ($DOCU) -19% because the software company cut its billing outlook.

• (–) Lululemon ($LULU) -20% after the retailer missed on earnings; lowered its profit outlook.

Private Dealmaking

• Andruil, a defense tech giant, raised $2.5 billion

• Anysphere, an AI coding assistant, raised $900 million

• Allay Therapeutics, a pain relief products developer, raised $57.5 million

• Aircapture, an air capture startup, raised $50 million

• Vivodyne, a lab-grown human tissues maker, raised $40 million

• Heron Power, a solid-state transformer developer, raised $38 million

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

NEIGHBORHOOD WATCH

Real Estate Digest

Need help with real estate? Our official partner, Nest Seekers International, can help you buy, sell, rent, or invest, anywhere in the world. Get in touch here.

Mortgage rates declined week over week, and with core PCE Inflation being at 2.1% (the closest it’s been to the Fed’s preferred inflation number of 2%), the talk of rate cuts in the back half of the year should help bring more confidence to the marketplace.

Latest News

• How should you begin your home search?

• South Florida home contracts slump in ‘uniquely bad’ slowdown

• Wall Street tower seeks $850 million for residential conversion

• U.S. home prices have slowed

• Downtown’s best offices in NYC are booming with activity

New Listings

• 121 Mercer St Floor 4 Apt: 4 New York, NY: 2 Bed / 2.5 Bath - $3.13M

• 900 W Shore Rd Mill Neck Oyster Bay, NY: 5 Bed / 6 Bath - $6.25M

• 221 Monroe Dr West Palm Beach, FL: 6 Bed / 5.5 Bath - $9.8M

• Quinta da Beloura Sintra, Lisboa Portugal: 5 Bed / 5 Bath - $7.87M

• Via Costanza, 4 Pallanza, Lombardia Italy: 7 Bed / 7 Bath - $7.87M

BOOK OF THE DAY

How Markets Fail

Description: A sharp, accessible critique of free-market ideology that traces how irrational behavior, speculative bubbles, and flawed economic theory contributed to the 2008 financial crisis, and why markets aren't always right.

Rating: 4.5 (Amazon) / 4.1 (Goodreads)

Book Length: 416 pages

Audible Length: 14 hrs 5 mins

Ideal For: Economics buffs, critical thinkers, policy wonks, investors, and anyone questioning the invisible hand.

“An essential, sobering read about how we got here—and why it might happen again.” — The Financial Times

DAILY VISUAL

Want more? Visualize the markets with Carbon Finance

PRESENTED BY MOSAIC

An AI Analyst Can Now Turn Your MD’s Comments Into Action

Imagine a world where you can just forward your MD’s email to an analyst and they take care of everything.

Well, that future is here.

On Mosaic’s LBO platform, you can chat with the “AI Analyst” (just like ChatGPT) and ask it to update your MD’s comments. Simply tell it what to do, and within 10 seconds, it’ll update your LBO model.

Mosaic is making life easier for hundreds of analysts at firms like New Mountain, CVC, and Warburg.

See it in action today.

DAILY ACUMEN

Bezos’ Favorite Interview Question

What if the simplest question in an interview could reveal the deepest truths about a person?

Jeff Bezos thought so. His favorite question to ask candidates at Amazon: “Are you a lucky person?” Odd? Maybe. But it turns out this quirky query is a psychological X-ray.

Saying "yes" signals more than superstition. It reveals humility—the awareness that success isn’t just hard work, but also timing, circumstance, and even serendipity.

It shows initiative, because self-identified lucky people tend to spot opportunity others miss.

And it uncovers optimism, the mindset that future success is both possible and probable.

In a world obsessed with resumes, credentials, and hard skills, Bezos’s question reminds us: some of the best predictors of success can’t be quantified—but they can be spotted if you know what to ask.

ENLIGHTENMENT

Short Squeez Picks

• Upgrade your morning investing insights with Opening Bell Daily

• How to stop letting people talk over you

• 5 signs you met the right person at the wrong time

• Why quitting can be a leadership power move

• Why job seekers consider pay cuts

• Gen Z whines about everyone else calling them lazy workers

• How to rise above hustle culture

MEME-A-PALOOZA

Memes of the Day

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