Good Morning! A new report found PE investors would have been better off in public markets over the last five years, even stripping out Mag7 gains. Super-rich travelers are fleeing Middle East conflict via private jet, sending charter prices through the roof. And Wall Street is optimistic the worst of the software wipeout is behind us.

JPMorgan says hedge funds hit their worst drawdown since last April. UBS is ordering US junior bankers back to the office five days a week. And dishwashing robot startup Sunday hit a $1.15 billion valuation.

Plus: Why Blackstone and BlackRock can ride out the private credit storm, and how to make hard work feel easy.

Most finance tools claim massive time savings, but they never provide a full audit of where and how. Termgrid has enhanced workflow for PE firms by 84%. Dig into the full breakdown here.

SQUEEZ OF THE DAY

Private Equity Pay Scheme Challenged

Private equity firms spent years engineering one of the most lucrative compensation structures in corporate America. Delaware courts are now asking whether shareholders got the short end of the deal.

At the center of the fight are tax-receivable agreements, or TRAs, a mechanism that lets founders collect payments tied to tax benefits created when a firm converts from a partnership to a public corporation.

Apollo Global Management helped popularize the structure, with Carlyle and KKR following. Today roughly 150 TRAs remain outstanding, representing ~$27 billion in combined value.

When alternative managers went public, most used an "Up-C" structure pairing a listed C-corporation with a founder-controlled partnership. When founders convert partnership units into public shares, the transaction generates additional depreciation and amortization, creating a tax shield for the company. TRAs allow founders to capture roughly 85% of that shield, paid out in cash over time.

Shareholder lawsuits argue the conversion was not necessarily a taxable transaction, meaning the underlying tax benefits may never fully materialize. The suits also contend that governance reforms already rewarded founders through higher equity valuations, making TRA buyouts an unjustified second payday.

Apollo's case carries additional weight. Co-founder Leon Black stepped down in 2021 after disclosing payments to Jeffrey Epstein for tax advice that, per recently released files, touched directly on the firm's TRA structure. Apollo's board subsequently approved roughly $570 million to buy out its TRA obligations. Apollo may be nearing a settlement; Carlyle and KKR continue to contest similar claims.

Takeaway: TRAs were designed as a clean mechanism for founders to monetize tax assets created at IPO. As payouts mounted and scrutiny intensified, what once looked like structured tax planning now looks to some shareholders like a second founder payday baked into the fine print. Delaware courts are about to decide whether it holds up.

PRESENTED BY TERMGRID

How PE Firms Are Reclaiming 100+ Hours Per Year

In private equity, capacity is king, and good tools are its power.

Termgrid is that power, providing deal teams with faster execution speed and deal closes.

Across client case studies, firms executing financing transactions reduced manual effort by up to 84% using Termgrid.

One mid-market buyout firm reduced 545 manual deal workflow hours to 86; releasing a total of 459 hours back to the deal team. Here is where they saw the time savings:

• Click-Through NDAs: 113 hours

• Integrated Data Room: 118 hours

• Comms & Reporting: 178 hours

• Term Sheets: 50 hours (not including legal fee savings)

Learn more about how this was achieved and see other results from Termgrid clients in 2025.

Download their PE report.

HEADLINES

Top Reads

• Private equity can’t top public markets even without Mag 7 (BB)

• Super-rich travelers are using private jets to escape Middle East conflict, pushing charter prices sky-high (CNN)

• Wall Street is optimistic that worst of software wipeout is over (YF)

• JPMorgan says hedge funds hit by worst drawdown since April (BB)

• UBS wants its US junior bankers in the office 5 days a week now (EFC)

• Dishwashing home robot maker Sunday hits $1.15 billion valuation (BB)

• Why Blackstone and BlackRock can ride out the private-credit storm (WSJ)

• 63% of U.S. entrepreneurs are planning to exit their businesses, a new UBS report explains why (Fortune)

• Ares holds town hall to reassure staff on market uncertainties (BB)

• Why gold hasn’t moved since the Iran conflict  and where it could go next (CNBC)

• Wall Street recalibrates as investors clamor to exit private credit (Axios)

• Private credit: Apollo logic on loan values is a lot like Goldman Sachs (BB)

• Airfare prices and jet fuel: how the Iran war is hitting your travel costs (CNBC)

• Pimco sees crisis of bad underwriting in private credit (YF)

• Middle East conflict, new tax breaks draw family offices to Hong Kong (CNBC)

• Private equity stocks down 30-40% in three months, bigger worry than geopolitical risk (YF)

• Palantir is still using Anthropic’s Claude as Pentagon blacklist plays out, CEO Karp says (CNBC)

• Hong Kong arrests hedge fund and brokerage staff in $300mn insider trading probe (FT)

CAPITAL PULSE

Markets Rundown

Market Update

• U.S. equities declined as rising oil prices and Middle East tensions continued to weigh on sentiment

• Major indexes finished broadly lower, with energy the only sector posting gains

• Industrials, financials, and small-cap stocks were among the weakest areas of the market

• WTI crude oil surged nearly 10% to about $95 per barrel amid escalating supply disruptions

• Bond yields and the U.S. dollar both moved higher ahead of next week’s Federal Reserve meeting

• The Strait of Hormuz disruption is affecting roughly 7.5% of global oil supply, according to the International Energy Agency

Oil Prices Remain Below $100 but Volatility Persists

• A series of attacks on oil tankers in the Middle East pushed crude prices higher despite Wednesday’s large emergency reserve release

• The International Energy Agency announced a 400-million-barrel strategic reserve release, including 172 million barrels from the U.S. Strategic Petroleum Reserve, roughly 40% of current U.S. stockpiles

• The move is intended to offset reduced flows through the Strait of Hormuz, which carries a major share of global energy exports

• The release has helped keep oil prices below the $100 psychological threshold, though skepticism remains about whether reserves can fully compensate for disrupted supply

Fed in Focus Ahead of Next Week’s Meeting

• Rising energy prices may push inflation higher and growth lower in the near term

• The Federal Reserve meets next week and will release updated economic and rate projections

• Central banks historically look through temporary oil-price spikes, though the persistence of above-target inflation complicates the outlook

• Bond markets have pushed expectations for the next rate cut from June to October

• Markets now price one rate cut in 2026 instead of two earlier in the year

Movers & Shakers

• (+) Petco ($WOOF) +35% after the pet retailer beat profitability estimates and issued stronger-than-expected full-year EBITDA guidance, prompting a Jefferies upgrade to buy.

• (+) Bumble ($BMBL) +34% because the dating app beat Q4 earnings estimates and unveiled an AI-powered dating assistant called “Bee” as part of a broader Bumble 2.0 relaunch.

• (–) Netskope ($NTSK) -21% after the cybersecurity company reported strong Q4 results but issued below-expectations revenue guidance for fiscal 2027, spooking investors despite 32% revenue growth.

Prediction Markets

• Will next week be Powell’s last fed meeting?

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

Private Dealmaking

• Savills will acquire Eastdil Secured for $1.1 billion

• Mind Robotics, an industrial robotics company spun out of Rivian, raised $500 million

• Quince, a direct-to-consumer online fashion retailer, raised $500 million

• Replit, a development environment platform, raised $400 million

• PixVerse, an AI video generation platform, raised $300 million

• Chowbus, an operating system for Asian restaurants, raised $81 million

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

BOOK OF THE DAY

A World Appears

Description: A thoughtful exploration of one of humanity’s oldest questions: what is consciousness and how does it arise. Michael Pollan blends neuroscience, psychology, philosophy, and personal reflection to examine how the mind constructs the world we experience. Through conversations with scientists and thinkers, the book investigates the nature of perception, awareness, and the mysterious relationship between the brain and subjective experience.

Book Length: 272 pages
Release Date: February 24, 2026

Ideal For: Readers interested in neuroscience, philosophy of mind, psychology, and anyone curious about how human awareness shapes reality.

Understanding consciousness is not only a scientific challenge. It is also a path to understanding how humans experience meaning, identity, and the world itself.

DAILY VISUAL

Perplexity is Cooked

PRESENTED BY COVERD

“Am I Rich?”

It’s a question people ponder but don’t typically have a tangible answer for.

Coverd gives you one.

It breaks down all of your spending, estimates your net worth, and shows how you stack up against your peers. The best part? It does this while also offering the ability to win-back past purchases by playing mini games like flappy bird or blackjack. It’s like if Rocket Money, Robinhood, and your favorite gaming app had a baby.

The Coverd credit card (anticipated to launch by the end of Q2) is the first to ever offer up to 100% cash back on every purchase. Users of the Coverd Card will be able to play in-app games using their points.

Until then, you can start seeing your money clearly now.

Check your net worth today.

DAILY ACUMEN

Reputation Lag

Your reputation is always a delayed reflection of your behavior. It captures who you were, not necessarily who you are, which means it can work both for and against you at inconvenient times.

The person who changed for the worse will enjoy unearned goodwill longer than they deserve. The person who changed for the better will carry old perceptions longer than feels fair. Neither situation is permanent, but both require patience.

Keep behaving like the person you want to be known as. The reputation catches up eventually.

ENLIGHTENMENT

Short Squeez Picks

• Four ways to radically rethink your work week

• What color shoes should you wear with a navy suit?

• People who feel a spiritual connection to their surroundings report better mental health

• The high-protein breakfast that boosts focus

• How to make hard work feel easy

MEME-A-PALOOZA

Memes of the Day

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