Good Morning! The Premier Lacrosse League closed a $100 million round led by Ares Sports and Joe Tsai, two years before lacrosse's 2028 LA Olympics debut. Warren Buffett skipped his usual midyear Gates Foundation gift, his first delay in two decades, pending a review of Epstein ties. And Digital Realty is buying a $3.5 billion stake in three Blackstone data centers.

Jalen Brunson became a partner and equity owner in $1 billion salad chain Just Salad. US officials are letting Zyn market itself as safer than cigarettes. And Saudi Arabia's wealth fund is struggling to find winners.

Plus: Nike topped estimates even as China sales dropped 12%, JPMorgan's $4 million "salami incident" is fueling a backlash from banks, and how SoFi went from fintech darling to Wall Street pariah.

Accelerate (and enhance) your firm’s commercial due diligence with senior ex-MBB consultants equipped with CDD-native AI. Learn more about DiligenceSquared here.

SQUEEZ OF THE DAY

Private Credit Meets Klarna 

Buy now, pay later started as a fintech convenience. But now it is becoming a private credit trade. Klarna, Affirm, PayPal, and other consumer-lending platforms are increasingly relying on private credit firms to fund the loans behind the checkout button.

Klarna doubled its deal with Elliott to $2 billion, helping fund up to $17 billion of larger U.S. loans. Blue Owl and KKR have done deals with PayPal, and Affirm has a $3 billion agreement with PGIM and gets almost half of its funding capacity from forward-flow arrangements. 

So the same private credit machine that replaced banks in corporate lending is now helping consumers split payments on furniture, groceries, and pre-workout supplements.

The model is straightforward. Fintechs originate the loans, sell them to private credit buyers, collect fees, free up capital, and make more loans. Private credit managers get short-dated consumer assets that can mature in weeks or months. Everyone gets volume, yield, and to say that underwriting is disciplined and the consumer is fine. 

The consumer data is less comforting. BNPL drove $28.5 billion in U.S. online spending in the first four months of the year, representing 7.8% of e-commerce sales, and a LendingTree survey found 54% of BNPL borrowers now view the loans as a necessity for survival rather than a convenience.

U.S. households are carrying a record $19 trillion in debt. Splitting a Peloton into four payments is one thing, but splitting groceries and cleaning supplies because the paycheck does not stretch is a different signal entirely.

Some BNPL loans do not show up cleanly in credit bureau data, which makes it genuinely difficult to know how levered the consumer actually is. Defenders argue the structure is safer than it looks;  loans are short-term, buyers can demand discounts, originators retain some risk, and firms like Blue Owl can stop buying if performance deteriorates. 

Skeptics hear "originate and sell," "limited transparency," and "consumer debt" and start having 2007 flashbacks. And major banks still help fund the private credit firms that are funding the fintechs that are funding the consumers, so financial intermediation remains undefeated.

Takeaway: Private credit has found another place to put money to work: the American consumer's checkout screen. The bull case is that BNPL is a mainstream payment product backed by short-duration assets, better underwriting, and diversified institutional capital.

The bear case is that private credit is helping finance a consumer who increasingly needs installment loans for everyday purchases, and that nobody has perfect visibility into how stressed that consumer actually is. Either way, this is the new credit ecosystem: banks fund private credit, private credit funds fintechs, fintechs fund consumers, and consumers fund the economy one pay-in-four grocery run at a time.

PRESENTED BY DILIGENCESQUARED

What Happens When You Give Senior ex-MBB Consultants CDD-Native AI

DiligenceSquared was built on a simple idea: keep the senior judgment, automate the rest. AI voice agents can now handle what armies of junior analysts used to do: sourcing experts, running interviews, and synthesizing transcripts. On the human side, senior ex-MBB consultants oversee and pressure-test every project, so the output holds up to an investment committee. The turnaround time becomes days instead of weeks.

It’s already in use by several of the world’s leading PE funds, representing over $2T in combined assets, across the full deal funnel: early-stage screens, pre-LOI diligence, active deals, and portfolio value creation.

See it in action today. Explore DiligenceSquared.

HEADLINES

Top Reads

• Donald Trump made more than $1bn last year in return to presidency (FT)

• Glen Powell and Rob Mac among investors in Premier Lacrosse League's $100M funding round (Deadline)

• Warren Buffett delays Gates Foundation donation pending Epstein review (CNBC)

• Digital Realty falls 5% after taking $3.5 billion stake in Blackstone's Virginia data centers (CNBC)

• Knicks star Jalen Brunson's latest play: investing in fast-casual chain Just Salad (Inc.)

• Zyn can be marketed as a safe alternative to cigarettes, FDA says (WSJ)

• Saudi sovereign wealth fund struggles to find winning investments (WSJ)

• Nike posts earnings that surpass expectations in latest quarter (BB)

• JPMorgan's $4 million salami incident is fueling a backlash from banks (WSJ)

• Millennium to back Citadel alum's quant hedge fund firm (BB)

• AWS launches program to embed AI engineers at major companies (CNBC)

• ProCamps, Otro acquired by private equity in youth sports bet (Axios)

• Private equity's youth sports push draws congressional scrutiny (CNBC)

• How NYC Mayor Mamdani's landlord hiked rent on his old apartment 35% — and others could follow suit (NY Post)

• Silicon Valley is obsessed with trust stacking — and the IRS doesn't like it (WSJ)

CAPITAL PULSE

Markets Rundown

Market Update

• U.S. equities closed higher, with the Nasdaq leading gains as technology stocks rebounded from last week's sell-off.

• The S&P 500 finished the second quarter up about 15%, marking its strongest quarterly return since 2020.

• Technology gained roughly 31% during the quarter, while industrials rose nearly 15%.

• More recently, leadership has broadened, with health care, industrials, and financials outperforming over the past month as technology has paused.

Quarter-End Performance

• Global equities posted their strongest quarterly gain since 2020, supported by easing geopolitical tensions and strong corporate earnings.

• Forward S&P 500 earnings have increased roughly 18% this year, even as valuation multiples have declined.

• Second-quarter earnings season begins in mid-July, with expectations for approximately 12% revenue growth and 22% earnings growth.

Movers & Shakers

• (+) Abivax ($ABVX) +39% after Meta will allow listings on Facebook Marketplace.

• (+) AeroVironment ($AVAV) +19% because the drone maker crushed fiscal Q4 estimates thanks to surging demand fueled by the Iran war.

• (–) Digital Realty ($DLR) -6% after announcing a $7.8B acquisition of a stake in three fully leased Blackstone data centers.

Prediction Markets

• PMI (Purchasing Managers’ Index) numbers come out today at 10am EDT. A reading above 50 signals expansion.

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

Private Dealmaking

• LeapXpert, a startup that helps companies monitor external messaging apps, raised $180 million 

• Redo, a customer service automation startup, raised $81 million

• Sail Research, a developer of infrastructure for long-horizon AI agents, raised $80 million

• Stathera, a developer of silicon timing solutions, raised $55 million

• Poetic, an AI startup focused on complex business workflows, raised $50 million

• Utilidata, a data center energy optimization startup, raised $40 million

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

BOOK OF THE DAY

The Soccer of Success

Description:
A unique leadership and personal development book from Ciarán McArdle that draws practical lessons from the world's most popular sport. Using soccer as a framework, the book explores teamwork, leadership, resilience, preparation, and strategic thinking, showing how the same principles that produce success on the pitch can also drive results in business and everyday life. Through stories, analogies, and actionable advice, it demonstrates how discipline, adaptability, and collaboration create sustained high performance.

Book Length: 256 pages
Release Date: January 28, 2025

Ideal For:
Sports fans, leaders, entrepreneurs, and professionals looking to apply the mindset and lessons of elite teams to business, leadership, and personal growth.

Success is rarely the result of individual brilliance alone, it is built through preparation, teamwork, and consistent execution.

DAILY VISUAL

America’s Housing Problem

PRESENTED BY STELRIX

How the Rich Don’t Pay Capital Gains Tax

The wealthy don’t just make money differently, they access it differently. Instead of selling appreciating assets and triggering capital gains taxes, many borrow against their portfolios to unlock liquidity while their investments continue compounding in the background. This strategy, often called “buy, borrow, die,” allows investors to use stocks, ETFs, or other assets as collateral for low interest credit without creating a taxable sale event. The advantage is not only tax deferral, but also maintaining ownership, preserving long term market exposure, and keeping compounding intact while still accessing cash when needed. What was once a strategy reserved for ultra high net worth private banking clients is now becoming increasingly accessible through modern investment backed credit platforms, like Stelrix.

Explore Stelrix’s Instagram for luxury and finance news and sign-up for their waitlist today.

DAILY ACUMEN

Endowment Effect

The moment you own something, your brain quietly revalues it upward. The stock in your portfolio, the position you have defended in meetings, the strategy with your name attached. Studies show people demand far more to give up an object than they would have paid to acquire it minutes earlier. Ownership distorts the math without your permission.

This is why investors hold losers long past the point of sense. The honest question, whether you would buy this today at this price knowing what you now know, almost always returns a no. But selling means admitting the original call was wrong, and the thing is already yours, so it gets a silent premium it never earned.

The discipline is to evaluate everything you hold as if you did not yet hold it. If you would not buy it today, you are not holding it because it is good. You are holding it because it is yours, and those are not the same reason.

ENLIGHTENMENT

Short Squeez Picks

• How the cast-iron tourist binoculars are surviving a cashless world

• 5 ways to pace yourself to achieve ambitious goals

• Surprising tips that make exercise and working out easier

• Why culture now trades like an asset, not a soft skill

• How SoFi went from fintech darling to Wall Street pariah

MEME-A-PALOOZA

Memes of the Day

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