Good Morning! The Fed held rates steady after a cliffhanger meeting, with three officials dissenting. Bloomberg agreed to acquire Canoe Intelligence, a platform that automates private markets data collection for institutional investors and family offices. And DoorDash is building its own drone for in-house delivery.

Airbus completed a 24-hour flight from Melbourne to Toulouse in a push for the world's longest commercial route. Morgan Stanley bankers were pressured to approve mortgages for wealthy clients. And Anglo American is reportedly in talks to sell De Beers for about $1 billion, a big markdown for a company it bought for $13 billion in 2011.

Plus: The CDS market is surging as Wall Street picks AI's winners and losers, and how Blackstone put Jersey Mike's on a fast track to this week's IPO.

The largest firms are pouring billions into AI deployment. The smartest are turning to purpose-built solutions like Blueflame. Sign up to learn more.

SQUEEZ OF THE DAY

The SaaSpocalypse Buying Opportunity

When Claude Code dropped earlier this year and software valuations collapsed, most of the PE software industry froze. Francisco Partners locked-in and went fundraising.

The San Francisco firm, founded in 1999 and now sitting on $75 billion in capital raised, just closed $21 billion in new money against an $18 billion target. It's the first large-cap software-focused PE firm to close a raise since the SaaSpocalypse hit in February. The message from LPs is clear: software is not dead, it is on sale.

Co-founder DJ Deb's bet is that AI splits the sector rather than levels it. "AI will not kill the software industry, but it will create a dispersion of winners and losers," he told the FT. "For some companies, their long-term valuations are permanently impacted, but for others people will realize that not only do they have strong moats, but they will be able to have a greater market to sell to."

Right now the market is pricing almost everything as a loser, which is historically where buyout firms make their money. "If you look at the history of private equity, when you buy right, you tend to make a lot of money, and valuations are at their lowest level in a long time." His corollary: the 2021 and 2022 vintages bought at peak multiples will struggle, while the funds deploying now have a real shot.

The track record backs the pitch. Per California pension filings, FP’s 2011 and 2015 funds each returned more than 3x, and the 2018 vintage has already returned nearly 100% of investors' cash at an 18.4% net IRR. Deb concedes some existing positions "will have issues by virtue of what's happened," and notes credit markets remain open to software buyouts though financing costs have risen. On the other side of the trade, he is blunt: "I think we're sitting on a massive AI bubble. This reminds me of 2000."

Takeaway: Francisco closed above target into a sector the market thinks is being disrupted out of existence, on the view that AI produces winners and losers rather than only losers. Whether February was a buying opportunity or the start of a structural decline is the most important question in tech investing right now, and Francisco Partners just put $21 billion behind the former.

PRESENTED BY BLUEFLAME AI

"AI Helped Us Close Deals We Would Have Missed"

That’s what 1,000 dealmakers said last month in a survey conducted by Datasite, Blueflame’s parent company, and FT Longitude, and nearly one in four said AI has already helped them close a deal they would have otherwise missed. 62% now say relying on human judgment alone is no longer defensible in complex deals.

The industry is past AI experimentation. Currently, half of deal teams have AI embedded in their due diligence. But the study draws a hard line between firms bolting on generic tools and firms building AI into how the deal team actually operates.

Private equity firms and investment banks are choosing Blueflame AI to do the latter. Amp, Blueflame's AI agent for dealmaking, takes on the process-heavy work like reviewing data rooms, surfacing red flags, comparing targets, and it leaves the decision making to the deal team.

Learn how Blueflame can help your deal team today.

HEADLINES

Top Reads

• Fed decision redline: here's what changed in the second statement under Warsh (CNBC)

• Bloomberg to acquire Canoe Intelligence in private markets push (BB)

• DoorDash building its own drone as it launches in-house drone delivery (Axios)

• Airbus jet completes 24-hour flight in push for world's longest commercial route (Fox Business)

• Morgan Stanley bankers were pressured to approve mortgages for wealthy clients (WSJ)

• Ex-Goldman exec awarded £1.45M after paternity leave ‘stigma’ (FT)

• Anglo said to be in talks to sell De Beers for about $1 billion (BB)

• How Blackstone put Jersey Mike's on a fast track to this week's IPO (WSJ)

• Wall Street picks AI winners and losers as credit swaps surge (BB)

• Brent oil jumps back above $90 after Trump threatens to hit Iran hard (CNBC)

• Deutsche Bank plans fresh $569 million buyback after earnings increase (WSJ)

• Shares in Gucci owner Kering surge as recovery gains traction (WSJ)

• AI companies are recruiting electricians by the thousands (NYT)

• SpaceX Starship heat shield can't support rapid flights, experts say (BB)

• Korean stocks tumble a second day as SK Hynix results disappoint (BB)

• Barclays moves to Wall Street pay model with higher bonuses (BB)

CAPITAL PULSE

Markets Rundown

Market Update

• Stocks fell more than 1.5% after Iran struck a U.S. base in Jordan and WTI crude jumped 7% to $85.

• The Fed held rates at 3.50% to 3.75% with three dissents favoring a hike; long-term yields rose.

• Apple and Amazon report after the close today.

Earnings Season

• Tech has pulled back roughly 5% this month, with the Philadelphia semiconductor index down 22%.

• Financials, energy, and healthcare each gained more than 5%, with the equal-weight S&P 500 and Russell 1000 Value hitting record highs before today.

• Visa posted 10% U.S. payments volume growth, the highest since 2019.

Movers & Shakers

• (+) GE Healthcare ($GEHC) +12% after beating Q2 estimates, with record order growth and a reaffirmed full-year outlook.

• (–) Humana ($HUM) -6% because investors were disappointed the company maintained its guidance after peer UnitedHealth lifted its own earlier this month.

• (–) Hims & Hers ($HIMS) -15% after the FTC sued the company over alleged data privacy violations.

Prediction Markets

• Core PCE for June gets announced 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

• Grant Thornton agreed to buy CBIZ for $5 billion, creating one of the country’s largest accounting firms

• Apax Partners agreed to acquire Centor and another plastic packaging business from Gerresheimer for around $1.6 billion

• Bain Capital agreed to lead a $1.5 billion investment in Eaton Fiber

• Pentair agreed to buy Taco Group, a hydronic and water-based solutions company, for $1.4 billion

• ThreatLocker, a zero trust security company, raised $190 million

• CAIS, an alts investment platform for independent financial advisors, raised $170 million

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

BOOK OF THE DAY

Hard Lessons From The Hurt Business

Description:
A powerful memoir and self-improvement guide from Ed Latimore, a former heavyweight boxer who uses the brutal lessons of the ring to illuminate life's toughest challenges. Drawing on his journey from poverty and addiction to becoming a professional athlete, writer, and entrepreneur, Latimore explores resilience, discipline, self-mastery, and personal responsibility. The book demonstrates how embracing adversity, not avoiding it, can build character, sharpen judgment, and create a life of purpose.

Book Length: 304 pages
Release Date: August 5, 2025

Ideal For:
Anyone looking to build mental toughness, overcome adversity, develop self-discipline, and apply the hard-earned lessons of elite competition to everyday life.

The strongest people aren't the ones who avoid life's hardest punches, they're the ones who learn how to get back up every time.

DAILY VISUAL

Private Wealth Funds Ditch Middleman for More Alts Exposure

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

Eighty Twenty

A small fraction of inputs quietly produce the overwhelming majority of outputs, in almost every system anyone has measured carefully. A handful of clients generate most of the revenue. A handful of positions generate most of the returns. A handful of trading days generate most of a market's gains for the entire year. The rest is closer to noise than most people admit.

The instinct is to treat every input as roughly equal, giving each client, task, and position a proportional share of attention. This feels fair. It is also a quiet way of starving the few things that actually matter in order to evenly water everything else.

The uncomfortable implication is that most of what fills a calendar or a portfolio is not pulling its weight. Finding the small slice that is doing the real work, and feeding it disproportionately, is worth more than any optimization spread evenly across the whole.

ENLIGHTENMENT

Short Squeez Picks

• The office amenity that improves teamwork 

• Why white-collar men are obsessed with the perfect lawn

• 4 ways to increase willpower and mind control

• 3 habits to replace your overapologizing tendency

• How to walk the length of Manhattan in a single day

MEME-A-PALOOZA

Memes of the Day

📣 Partner With Us: Get in front of an audience of over 1 million finance professionals, business leaders, and policy influencers. Submit a partnership inquiry.

📊 Wall Street Comp & Culture Data: Get the most detailed comp, carry, and culture insights across 1000+ Wall Street firms. Explore the data.

📈 Grow With Us: Work directly with the Overheard on Wall Street team to scale your finance brand. Schedule your free consult.

🧢 Wall Street Shop: Explore our collection of finance-themed apparel and merchandise. Visit the shop.

📬 Deals Newsletter – Buysiders: A curated roundup of major M&A, private equity, and VC activity. Plus access to private deal flow. Subscribe here.