Good Morning and Happy Friday! Stocks gave back some of their Wednesday gains as the trade war with China heats up. Trump slapped a 145% tariff (and counting!) on Chinese goods, and China hit back by raising its own tariffs to 125%. Experts say the moves could effectively cut off most trade with the world’s second-largest economy.

Dealmakers are hitting pause on M&A, but retail investors are going all-in on the dip. Prada is making a statement in Italian fashion, buying Versace from Capri Holdings for $1.38 billion. Apple, scrambling before tariffs kicked in, flew 600 tons of iPhones from India to the U.S.

Plus: A record number of U.S. companies have gone under to start 2025 (worst since 2010), NYC remains the world’s wealthiest city, Bill Ackman’s fund is down 14% YTD, and PWP’s CEO took home $27 million after a record-breaking year.

_{SQUEEZ OF THE DAY}

PE Comp Holds Up But Layoffs Are Looming

Despite a prolonged deal drought, private equity compensation has stayed surprisingly resilient. But in 2025, that may change.

According to Johnson Associates, bonuses rose 5–10% last year at large multi-strategy firms and held flat to +5% even at smaller shops. On the surface, it looks like PE professionals are still getting paid. But under the hood, firms are approaching a breaking point, and recruiters are calling this year a critical test for headcount.

“We’re at an inflection point,” said Chris Connors, principal at Johnson Associates. “If GPs can’t deliver liquidity, they can’t raise money, and their next fund will be smaller. Then you will have to do layoffs.”

The downturn, now in its fourth year, has redrawn the PE talent map. Larger firms with exposure to credit, infrastructure, and secondaries are holding up best, and using the moment to scoop up fundraising specialists and operating partners. Meanwhile, traditional buyout-only firms are finding it harder to attract or retain top talent, especially without carried-interest payouts to keep people in their seats.

That’s the sore spot: carry.

Firms that aren’t selling assets can’t pay it out, and employees are jumping ship. “There are good people at underperforming firms,” said John Rubinetti at Heidrick & Struggles. “Top firms are making compelling cases for them to move.”

On paper, carry looks good. But if no exits are happening, it’s theoretical. “Until then,” Connors said, “it’s Monopoly money.”

Where hiring is booming: private wealth. As institutional capital slowed, fundraising via high-net-worth channels has exploded. In 2024 alone, hiring for private-wealth roles jumped 40% year-over-year, the biggest increase in any vertical. Half of all current recruiting mandates are now for private-wealth specialists, up from just 10% in 2022.

Meanwhile, hiring at the junior level has slowed considerably. The most active part of the market is now at the partner and principal level, and largely tied to firms expanding into credit and secondaries to diversify away from pure buyouts.

Takeaway: Private equity comp may still look strong but it’s a lagging indicator. Bonuses were paid based on past performance, not current pipeline. The real-time metric is carry, and if that’s not hitting accounts, employees are already halfway out the door. In 2025, firms aren’t being judged on how they paid last year, they’re being judged on what they can pay out next. And for many, that window is closing fast.

_{PRESENTED BY BIGDATA.COM}

It’s 2025 — Still Managing Your Stocks the Old Way?

Bigdata.com just dropped its new AI-powered research agents, designed for 24/7 investment monitoring and pre-market intelligence built specifically for financial professionals.

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The best part? We’ve also partnered with Bigdata.com to launch our own watchlists, including Short Squeez Alpha, The Street Index, and 2 & 20, now live on the platform. Check them out today.

_HEADLINES

Top Reads

• China strikes back with 125% tariffs on U.S. goods as trade war intensifies (CNBC)

• Dealmakers still cautious after Trump’s tariff backtrack (Axios)

• Wall Street execs privately credit Dimon and Ackman for swaying Trump on tariffs (BB)

• Stocks plunge again as volatility reigns despite Trump tariff pause (Axios)

• Retail investors are running head first into this topsy-turvy market (CNBC)

• Trump blinked, but the global economy will never be the same (Axios)

• Ackman’s Pershing Square Holdings fund drops 14% so far this year (YF) 

• PWP gets paid $27M after a record year (BB)

• The wealthy are loading up on cash, gold and family trusts during market turmoil (CNBC)

• NYC still world’s wealthiest city in 2025 (NYP)

• Trump’s trade war is now all about China (YF)

• How China could crush the U.S. housing market (CNBC)

• Apple airlifted 600 tons of iPhones to the U.S. (Fortune)

• Record number of companies go under to start 2025, worst since 2010 (Fox)

_{CAPITAL PULSE}

Markets Rundown

Stocks Dip, Inflation Eases, Labor Holds Steady

Stocks retreated after yesterday’s rally, with energy and tech sectors leading losses.

Trump paused new tariffs for 90 days, lowering rates to 10% for most countries but raising China’s to 145%.

Steel, aluminum, and auto duties stay at 25%. Asia surged—Nikkei up 9.1%, Europe up 3-4% as the EU paused countermeasures.

Bond yields rose slightly, with the 10-year Treasury at 4.40%, below yesterday’s 4.5% peak.

The U.S. dollar weakened globally. WTI oil fell on demand fears amid U.S.-China trade tensions.

CPI inflation dropped to 2.4% in March, below the expected 2.6%.

Energy prices fell 3.3% year-over-year, core CPI hit 2.8% against a 3.0% forecast, and shelter inflation slowed to 4.0% from 5.6%.

Tariffs may push prices up short-term, but long-term inflation expectations hold at 2.27% over 10 years.

Jobless claims rose to 223,000, just under the 225,000 estimate, averaging 223,000 over four weeks—aligned with 2024’s trend.

Despite looming federal layoffs, the labor market stays strong: unemployment at 4.2%, 7.6 million job openings outnumber 7.1 million unemployed, and wage growth supports consumer spending.

Movers & Shakers

• (+) Harmony Gold ($HMY) +11% after investors pile into gold as a safe haven.

• (–) Warner Bros ($WBD) -13% because China will restrict imports of U.S. films.

• (–) CarMax ($KMX) -17% after an earnings miss; tariff concerns for the used car retailer.

Private Dealmaking

• Prada bought Versace for $1.38 billion

• Bain Capital will buy Sizzling Platter for $1 billion

• Bain bought a 9.9% stake in Lincoln Financial for $825 million

• Base Power, a battery maker, raised $200 million 

• Nuro, an autonomous driving tech developer, raised $106 million

• Rain, an earned wage access app, raised $75 million

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

_{BOOK OF THE DAY}

Talk

We all struggle with difficult conversations, but we're often not very good at the easy ones either.

Though we do it all the time, Harvard professor Alison Wood Brooks argues that conversation is one of the most complex, demanding, and delicate of all human tasks, rife with possibilities for misinterpretation and misunderstanding.

And yet conversations can also be a source of great joy, each one offering an opportunity to express who we are and learn who others are—to feel connected, loved, and alive.

In Talk, Brooks shows why conversing a little more effectively can make a big difference in the quality of our close personal relationships, our professional success, and on the world.

Drawing on the new science of conversation, Brooks distills lessons that show how we can better understand, learn from, and delight each other.

“A groundbreaking book that reveals the hidden architecture of our conversations and how even small improvements can have a profound impact on our work, relationships, and well-being.”

_{DAILY VISUAL}

Consumer Prices Fall in March with Much Cooler Inflation

_{PRESENTED BY HERITAGE}

NYC Family Office Summit

On May 9th, Heritage is bringing together 500+ family office leaders, investors, and founders in NYC for a high-trust, closed-door summit designed for real conversations and real opportunities.

Why you need to be there:

• You’ll hear from leaders like Michael Loeb, Anthony Pompliano, and Ryan Serhant, and connect with peers navigating the same high-stakes decisions

• High-impact strategies on capital allocation, succession & governance

• Private, curated networking - where trust and access unlock opportunities

Only 25 discounted spots available on a first-come, first-serve basis. Use code SS25 for 25% off your registration.

_{DAILY ACUMEN}

Micro-retirements

Gen Z’s “micro-retirement”—quitting work temporarily to rest using savings or government support—aims to combat burnout but differs from paid sabbaticals.

It addresses the “ceiling effect,” where energy depletion from overwork harms wellbeing, leading to coping mechanisms like coffee or alcohol, sleep issues, and “presenteeism” (showing up but underperforming).

Research shows long working hours increased heart disease and stroke deaths by 29% from 2000-2016.

Belgium’s paid career break scheme improved health for 76% of 25-49-year-olds, but micro-retirement’s unpaid nature risks “scarring”—lower future wages and retirement income, impacting health.

Daily disengagement from work is key to sustainably restore energy.

_{ENLIGHTENMENT}

Short Squeez Picks

• Free productivity tools you’re not using but should be

• The neuroscience of trust

• How to build a more powerful speaking voice

• Kindness will make you happier than a happy salary

• The dumber the disagreements, the better the world actually is

_{MEME-A-PALOOZA}

Memes of the Day