🍋 Private Equity Downsizes

Why private equity giants are revising their investment strategy and going all-in on small deals, plus Lordstown went bankrupt and home prices set a decade first.

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“New York is the only city in the world where you can get deliberately run down on the sidewalk by a pedestrian.” — Russell Baker


Good Morning! Commuting is so back… or is it? Real estate investor Vornado thinks so, and is betting on the area near NYC’s Penn Station with a $1 billion investment. But while the commute might be making a post-Covid comeback, it looks like cruise ships are still struggling. Apparently cruise ships are posting their worst stomach virus pace in years.

Lordstown, an EV startup, filed for bankruptcy. And last month, home prices posted their first annual decline for the first time since 2012.

In honor of intern season, here are our top 30 favorite Wall Street intern stories.

Our Investment Banking Excel course is now live. You can order it here or if you pre-ordered it, you can now access it.

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PE Goes Smaller

If you work in private equity, it has been a challenging year. Debt just isn’t as cheap and abundant as it was during the pandemic. So private equity giants are snapping up smaller companies.

Take Blackstone and Ares, for example. Their bread-and-butter are the larger transactions. But right now, they’re finding smaller takeovers can enhance current portfolio companies.

Private equity companies can buy smaller companies with little to no debt. And then, they merge these companies with other portfolio companies within their portfolio aka tuck-in acquisitions.

Private equity firms have over $1.4 trillion of dry powder to spend, so it makes sense that they’re eager to invest. But not everyone’s a fan of the smaller deals - some think it slows down the investment process.

Takeaway: The lending environment hasn’t looked this hawkish since 2007. Private equity is financial engineering at its finest and is even a dangerous game to play in a low interest rate environment. So it makes sense that these financial engineers are adapting and not taking any more risk than they have to. The average private equity deal has a $66 million value. Last year it was $132 million. And the highest average value ever? $655 million in 2007.


Markets Rundown

Stocks closed higher as positive economic data quiets slowdown fears.

Movers & Shakers

  • (+) Generac ($GNRC) +9% after the generator company announced a dramatic increase in demand.

  • (+) Delta ($DAL) +7% after the airline revised its earnings forecast.

  • (–) Walgreens ($WBA) -9% after the company revised its full-year guidance.

Private Dealmaking

  • Ares acquired a $3.5 billion loan portfolio from PacWest

  • Thomson Reuters bought Casetext, an AI assistant for lawyers, for $650 million 

  • Cyera, a cloud data security startup, raised $100 million

  • Empress Therapeutics, a small molecule drug developer, raised $50 million

  • Levit, the operator of a South Korean shopping app, raised $46 million

  • Slang.ai, a phone answering product, raised $20 million


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Top Reads

  • The misery index is falling fast (Axios)

  • Why turmoil in Russia could send oil prices even lower (YF)

  • The drugs that power Silicon Valley (WSJ)

  • Goldman Sachs and JPMorgan Chase job cuts thin the Wall Street herd (BB)

  • SpaceX’s valuation skyrockets amidst IPO spark (Axios)

  • Private credit fuels asset management deals (II)

  • How interns find housing in NYC market (Curbed)

  • Americans are hiding their credit card gap (Hill)

  • KPMG to cut 5% of U.S. jobs in fresh round of layoffs (Reuters)

  • Summer’s here, and a 5-10% pullback in big cap tech may be in store (CNBC)


The Art of Clear Thinking

The training to become a fighter pilot is among the most competitive and difficult in the world with fewer than one in a thousand succeeding.

Pushing a cutting-edge jet to its limits at over 1,000 mph means that every split-second decision can have catastrophic consequences.

This extreme environment has forged a group of warriors who for the last fifty years have been considered at the apex of decision-making theory and practice.

In The Art of Clear Thinking, Hasard Lee distills what he’s learned during his career flying some of the Air Force’s most advanced aircraft.

With gripping firsthand accounts from his time as a fighter pilot and fascinating turning points throughout history, Hasard reveals powerful decision-making principles that can be used in business and in life.

“Based on a career of making high-stakes, split-second decisions as a U.S. fighter pilot.”


Short Squeez Picks



Top pickleball injuries by body part region

Source: Axios


Just Relax

In the pursuit of our goals and desires, it's essential to remember the power of relaxation and letting things unfold naturally. Here's a reminder to avoid begging or succumbing to desperation, and instead, embrace the art of relaxation:

1. Trust in the process: When we chase after something desperately, we often disrupt the natural flow of life. Instead, have faith in the process and trust that things will align at the right time. Relaxation allows space for opportunities to present themselves organically.

2. Maintain self-respect: Begging or pleading for something diminishes our self-worth and can even push away what we desire. By staying calm and composed, we preserve our dignity and attract positive outcomes.

3. Cultivate patience: Relaxation and patience go hand in hand. Rushing and forcing outcomes rarely lead to lasting success. Embrace patience as a virtue, knowing that the best things in life often require time and perseverance.

4. Focus on abundance: Desperation arises when we believe that there is a scarcity of opportunities or resources. Shift your perspective to one of abundance, knowing that the universe is abundant and there is always more to come. Relaxation allows us to tap into the abundance around us.

5. Be present: Relaxation stems from being fully present in the current moment. By letting go of worries about the past or anxieties about the future, we can appreciate the beauty and opportunities that surround us right now.

Remember, begging and desperation seldom lead to fulfillment. Instead, find solace in relaxation, trusting the process, cultivating patience, embracing abundance, and living in the present moment.

From this state of tranquility, you can navigate your journey with greater clarity, attracting the opportunities and experiences that align with your true desires.





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