Good Morning! Apple shares hit a record high after AI announcements. Elon Musk dropped his lawsuit against OpenAI and Sam Altman. Paramount's deal with Skydance fell apart. The global economy is stabilizing after years of unprecedented disruption. LinkedIn will test an AI assistant for premium members, and WeWork’s CEO will step down as the company exits bankruptcy. Plus why you probably don’t have a motivation problem and 6 tactics to increase your resistance to burnout at work.

High returns, recurring monthly income, diversification–private credit is a $1.9 trillion asset class, and everyday investors can invest today with Percent. 

_{SQUEEZ OF THE DAY}

Private Equity 🤝 Coral Reefs

Private equity is funding a new unique investment class - coral reefs. Coral reefs are crucial as they provide food for a billion people worldwide and support economic activities worth trillions of dollars annually, including $36 billion from tourism.

But with climate change threatening coral reefs, Wall Street titans are trying to use finance to find solutions. The UN has established a Global Fund for Coral Reefs, aiming to raise $750 million, with $250 million already secured.

$500 million of this fund is allocated to a private equity fund managed by Pegasus Capital Advisors and overseen by Dale Galvin.

Investors say coral reefs are underfunded and undermanaged. And with the amount of capital needed to reach global sustainability goals, there’s a tangible opportunity for private equity funds to help out. 

While the focus on coral reefs has societal benefits, it’s not purely philanthropic. The fund aims for a 20% return over 12 years by focusing on practices such as sustainable fishing and pollution control.

So, how can you profit from investing in coral reefs? By investing in companies dedicated to reef conservation. For example, Galvin has invested in Carbonwave, a company that transforms harmful seaweed into products like agricultural stimulants and cosmetics.

Takeaway: Investing in coral reefs comes with risks, given the sector's novelty and complexity. For more capital to flow into preservation, investors need to monetize the "blue" or green economy effectively. Addressing environmental impacts is urgent, and there is significant potential for economic returns.

Funds like Pegasus are pioneering this effort, and their performance will be closely monitored by others considering similar investments. After all, it's not every day that you get to save the planet and also make a 20% IRR!

_{PRESENTED BY PERCENT}

Explore the Benefits of Private Credit Investing

Curious about expanding your portfolio beyond stocks and bonds? You might be interested in private credit, where you can lend money to corporate borrowers in exchange for an expected contractual return on your principal. 

Why private credit? Allocating 10% of a portfolio to private credit instead of stocks and bonds alone has historically raised returns and lowered volatility¹. As a result, private credit has become increasingly popular with institutional investors, like Blackstone, Morgan Stanley and KKR.

Percent simplifies access to private credit investing with low minimums (just $500) and shorter durations (typically 6-36 months) through their marketplace. Plus, deals are available to both institutional and individual accredited investors, making it one of the few places an everyday investor could get in. 

Historical data on private credit returns remains strong: In 2023, private credit averaged a 12% return² globally, and on Percent, a net return of 14.5%. 

Visit Percent to learn more - plus get up to $500 with your first investment.

_HEADLINES

Top Reads

• Apple stock soars to record high after AI announcement (YF)

• Elon Musk withdraws lawsuit against OpenAI and CEO Sam Altman (Axios)

• Paramount’s deal with Skydance falls apart (YF)

• The global economy is stabilizing (Axios)

• Why isn’t the Fed cutting rates when it’s winning the inflation battle? (CNN)

• Is Nvidia the next Cisco? (Axios)

• LinkedIn tests AI assistant for premium members (Axios)

• WeWork’s CEO will step down as company exits bankruptcy (Reuters)

• The hidden costs of owning a home are soaring (CNN)

• Delta will launch premium economy from NYC to LA in upsell race (CNBC)

• How the NBA is trying to get seen by everyone (YF)

• How much is that private equity investment really worth? (WSJ)

_{CAPITAL PULSE}

Markets Rundown

Nasdaq, S&P 500 post record closing highs as Apple soars.

Movers & Shakers

• (+) Affirm Holdings ($AFRM) +11% because the company’s loans become available to US Apple Pay users.

• (+) Apple ($AAPL) +7% after the company unveiled its AI software.

• (–) Southwest Airlines ($LUV) -6% after the airlines’ management says they’re open to meeting with activist investors.

Private Dealmaking

• Mistral AI, a French AI company, raised $650 million

• Addus HomeCare bought the personal care operations of Gentiva for $350 million

• Newsmax, a news organization, is raising $225 million

• Battery Smart, a battery-swapping network, raised $65 million 

• Lumos, an identity management startup, raised $35 million

• Gameto, an in-vitro maturation solution developer, raised $33 million

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

_{BOOK OF THE DAY}

What Went Wrong With Capitalism

What went wrong with capitalism? Ruchir Sharma’s account is not like any you will have heard before. He says progressives are right, in part, when they mock modern capitalism as “socialism for the rich.” For a century, governments have expanded in just about every measurable dimension, from spending to regulation and the scale of financial rescues when the economy wobbles. The result is expensive state guarantees for everyone—bailouts for the rich, entitlements for the middle class, welfare for the poor.

Taking you back to the 19th century, Sharma shows how completely the reflexes of government have changed: from hands-off to hands-on, from doing too little to help anyone in hard times to today trying to prevent anyone suffering any economic pain, ever. Trading sins of omission and indifference for excesses of spending and meddling, governments from the United States to Europe and Japan have pumped so much money into their economies that financial markets can no longer invest all that capital efficiently.

Inadvertently, they have fueled the rise of monopolies, “zombie” firms, and billionaires. They have made capitalism less fair and less efficient, which is slowing economic growth and fueling popular anger. The first step to a cure is a correct diagnose of the problem. Capitalism has been badly distorted by constant government intervention and the relentless spread of a bailout culture. Building an even bigger state will only double down on what ruined capitalism in the first place.

“A century of expanding government has distorted financial markets, stoked massive inequality, and soaked America in debt.”

_{DAILY VISUAL}

Real Estate Pain

Vacancy rates rising for office, apartment, and industrial real estate in a strong economy

_{WHAT ELSE TO READ}

The Best PE, VC & M&A Newsletter

Buysiders is our deals newsletter to bring y’all the best insights on deals around Wall Street.

Every month, you get insider details on the month’s top 3 deals. For this month’s edition, we cover the following deals:

1. Uber acquires Foodpanda Taiwan for $950 million

2. ConocoPhillips announces $22 billion acquisition of Marathon Oil

3. Thoma Bravo exits Venafi for $1.5 billion

Read the full edition here and subscribe to the newsletter below.

_{DAILY ACUMEN}

Roger Federer’s Mindset

Excerpt from Roger Federer’s Dartmouth commencement address:

"Perfection is impossible.

In the 1,526 singles matches I played in my career, I won almost 80% of those matches.

But what percentage of points did I win?

54%

In other words, even top ranked tennis players win barely more than half the points they play.

When you lose ever second point on average, you learn not to dwell on every shot.

You teach yourself to think:

'Okay, I double faulted...it's only a point.'

'Okay, I came to the net and I got passed again...it's only a point.'

Even a great shot, an overhead backhand smash that ends up on ESPN's top 10 playlist – that too is just a point.

Here's why I'm telling you this.

When you're playing a point, it has to be the most important thing in the world. And it is.

But when it's behind you, it's behind you.

This mindset is crucial – because it frees you to fully commit to the next point with intensity, clarity, and focus."

_{ENLIGHTENMENT}

Short Squeez Picks

• You don’t have a motivation problem

• What to do if you’re told you’re not ready for a leadership role

• How to visualize your perfect day to make it come true

• 6 tactics to increase your resistance to burnout at work

• The balance between telling it like it is and displaying good people skills

_{MEME-A-PALOOZA}

Memes of the Day

Acquire new customers and drive revenue by partnering with us

Short Squeez, one of the world's largest finance newsletters, reaches over 200,000 readers from top banks and investment firms. Leading companies like The Economist, Sony, and Datasite showcase their offerings in Short Squeez. Learn more about partnering with us here.