Good morning! Oura postponed its ~$15B IPO citing market uncertainty, even after it was reportedly 4x oversubscribed. Morgan Stanley set up a Digital Asset Lab to test the future of Wall Street: stablecoins, tokenization, and DeFi.

Swings in food prices have opened M&A windows across America's grocery aisles. Google co-founder Sergey Brin has now spent $100+ million to defeat a one-time state tax on California's billionaires. And Larry Ellison quietly bought eight homes for staff to live near his sprawling Florida mansion.

Plus: Private equity wrestles with its own generational wealth gap, Barclays watered down its return-to-office mandate after staff backlash, and the 24 new rules for succeeding at work.

For those in NYC: be the first to see the new AI agent built for wealth management, advisory, and client relationships. Register here to join Unique AI’s October 6th event.

SQUEEZ OF THE DAY

Piper Weinberg?

Piper Sandler is reportedly in talks to acquire Perella Weinberg Partners, and if you know anything about investment banking, a bunch of Piper analysts are probably thrilled they finally get to tell their friends they work at an elite boutique. Meanwhile, PWP analysts are probably debating whether this is a bigger prestige hit than when Greenhill got bought by Mizuho.

The economics of the deal make a lot of sense, and it fits the broader wave of consolidation that has swept smaller and middle-market investment banks. Piper doesn't carry PWP's clout in New York, but it has much larger scale. Based in Minneapolis, Piper is worth ~$5 billion and generated more than $1 billion in advisory revenue last year. It also ranks No. 2 in the U.S. by number of announced M&A deals under $2 billion.

PWP is much smaller at just $1.4 billion in market cap, and it never chased scale. It built its business around a small number of superstar bankers with deep CEO relationships and often competes directly with Goldman and JPMorgan for the biggest mandates on Wall Street. For example, PWP advised BlackRock on both its $12.5 billion acquisition of Global Infrastructure Partners and its $12 billion purchase of HPS.

The obvious comp is Mizuho's $550 million acquisition of Greenhill in 2023 which was another prestigious, relatively small boutique. Mizuho bet Greenhill’s blue-chip relationships were worth far more than its balance sheet implied and paid a 121% premium, essentially to buy a roster of senior dealmakers and relationships that would have taken decades to build organically.

Piper already has the scale and platform, but it needs the rainmakers who get the call on $10 billion-plus deals and can compete with Morgan Stanley, Evercore, and Centerview for the biggest mandates on the Street. And PWP gets a bigger platform at a moment when its own revenue slipped from a record $878 million in 2024 to ~$750 million last year.

PWP stock was up 12% on the news, while Piper stock fell 10%.

Takeaway: Investment banks are strange companies to acquire because their most valuable assets can simply walk out the door. Most of PWP’s value comes from a relatively small group of rainmakers with deep CEO relationships, and Piper still has to convince those bankers not to take their Rolodex somewhere else. Acquiring PWP also isn’t the same thing as integrating it, so one of the biggest questions will be whether Piper folds the boutique into its broader platform or just lets PWP keep doing its own thing.

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HEADLINES

Top Reads

• Oura postpones IPO over market uncertainty (WSJ)

• Some Oura IPO investors were said to push back citing valuation (BB)

• Morgan Stanley builds crypto lab to test future of Wall Street (BB)

• Bain invests in construction tech firm Kahua at $1 billion value (BB)

• The boom-and-bust cycle in food prices is spilling into M&A (Axios)

• A Google co-founder is spending $100 million to defeat California's wealth tax (CNN)

• Larry Ellison quietly bought 8 homes for his staff to be near his sprawling Florida mansion (NY Post)

• Private equity wrestles with its own generational wealth gap (FT)

• Barclays waters down return-to-office mandate after staff backlash (FT)

• Alaska Airlines unveils massive premium cabin overhaul in high-end travel race (CNBC)

• Polymarket taps Goldman Sachs veteran Lisa Mantil to attract Wall Street liquidity (CNBC)

• NYC renters need $153,000 to afford a studio (NYPost)

• Data centers create $3 billion opportunity for catering giants (BB)

• The right time to judge a new CEO (WSJ)

• Jamie Dimon has a plan to revive the West: A 'big, beautiful' deal with Europe (CNBC)

• Job openings and hiring hold steady as 'low hire, low fire' market drags on (YF)

• SoundThinking to be taken private by Transom Capital Group (WSJ)

• Iowa Public Employees' Retirement System is the latest pension fund to face private equity challenges in fiscal-year returns (P&I)

CAPITAL PULSE

Markets Rundown

Market Update

• Stocks closed modestly lower as the 10-year Treasury yield edged up to 5.23%, while the 2-year eased just below 4.90%.

• WTI crude fell below $90 for the first time since late August.

• The Conference Board's Consumer Confidence Index fell to 81.9 in September, its lowest since 2014.

Economic Data

• August JOLTS job openings fell to 7.1 million, roughly matching the number of unemployed workers.

• Friday's payrolls report is expected to show 95,000 jobs added, with unemployment holding at 4.1%.

• Markets are pricing roughly a 70% probability of another Fed hike in October.

Labor Market Sentiment

• The share of respondents saying jobs are hard to get rose to 21.9% in September, the highest since January 2021.

• The share viewing jobs as plentiful fell to 23.6%, the lowest since February 2021.

• U.S. investment-grade bonds are down roughly 2.8% this year as yields have climbed.

Movers & Shakers

• (+) Carnival ($CCL) +13% after the cruise operator's fiscal Q3 results beat estimates, citing record bookings and customer deposits.

• (+) Perella Weinberg ($PWP) +12% because investment bank Piper Sandler has been in talks to combine with the boutique advisory firm.

• (–) Fair Isaac ($FICO) -27% after Fannie Mae and Freddie Mac will release a rival product to VantageScore and FICO score.

Prediction Markets

• These employment numbers signal a stabilizing economy. Numbers come out this morning around 8:30am EDT.

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

Private Dealmaking

• Helix Digital Infrastructure, an AI infrastructure company, will raise $1 billion from Samsung

• Ortet, a frontier health AI lab, received a $500 million commitment

• EliseAI, a housing and healthcare AI automation company, raised $350 million

• Bain Capital is investing $250 million in Kahua, a construction tech firm

• Webster Equity Partners plans to acquire Lifecore Biomedical, an injectable-grade hyaluronic acid manufacturer, for $663.7 million

• Quartermaster, a maritime surveillance startup, raised $100 million

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

BOOK OF THE DAY

The Key Man

The Description:
Simon Clark and Will Louch tell the remarkable rise and collapse of Arif Naqvi and Abraaj, the Dubai-based private equity firm that became one of the largest investment groups in emerging markets. At its peak, Abraaj managed nearly $14 billion and had built relationships with some of the world's most powerful investors, philanthropists, corporations, and political leaders. But behind the firm's impressive growth was a deeply flawed financial structure and the misuse of investor funds. Drawing on extensive reporting and interviews with former Abraaj employees and other key figures, the authors reconstruct how Naqvi built an extraordinary reputation, attracted billions in capital, and ultimately presided over one of the most consequential private equity scandals of the era. The book is a compelling case study in ambition, financial engineering, governance failures, and the dangers of charismatic leadership.

Book Length: 368 pages
Release Date: July 6, 2021

Ideal For:
Private equity professionals, investors, entrepreneurs, finance executives, and readers interested in emerging markets, financial fraud, corporate governance, impact investing, and the darker side of high-growth investment firms.

“Reputation can attract billions in capital, but without strong controls, the same trust that creates an empire can ultimately destroy it.”

DAILY VISUAL

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DAILY ACUMEN

Half Kelly

There is a formula for how much to bet when you have an edge, and the answer is almost always less than people expect. The Kelly criterion says to stake a fraction of your capital equal to your edge divided by the odds. On an even-money bet you win 60 percent of the time, that works out to 20 percent of your bankroll.

The counterintuitive part is what happens beyond that number. Bet more than double Kelly and your long-run growth turns negative, even with a real edge. Most professionals bet half Kelly, which gives up only about a quarter of the growth in exchange for far smaller drawdowns.

Being right is not enough. So remember, when you’re trading, sizing decides whether an edge compounds or destroys you.

ENLIGHTENMENT

Short Squeez Picks

• How to build powerful microhabits for your wellbeing

• The 24 new rules for succeeding at work

• How much you need to exercise for better sleep

• Embrace the goalkeeper mindset

• 5 habits of leaders who make everyone around them braver

MEME-A-PALOOZA

Memes of the Day

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