Axios Pro Rata: Eating Intel

Emptying out the notebook as we head into the first weekend of fall...

🏳️ Truce: Apollo and Citigroup's plan to launch a $25 billion private credit program should not be overlooked (even if I included it yesterday as a bottom blurb).

• The private credit boom of recent years has come at Wall Street's expense, and Wall Street hasn't been shy in voicing its displeasure.
• Now, though, it looks like foes can become friends. Or maybe it's about keeping your enemies close. Either way, it's a sea change and likely to be replicated.

🤦🏻‍♂️ Red herring: Jared Kushner's Affinity Partners got hit in the NY Times this week for having collected at least $112 million in fees from limited partners like Saudi Arabia's sovereign wealth fund, without having returned any capital.

• Its source material was the findings of a Senate Finance Committee inquiry into Affinity, led by Sen. Ron Wyden (D-Ore.), and it got a ton of social media play. Plus a congressional floor speech from Rep. Robert Garcia (D-Calif.).
• The problem, of course, is that this is totally normal for a private equity fund that was launched in late 2021 and didn't make its first investment until early 2022. These are long-term investments, and early exits are abnormalities. The NYT story touches on this, but well after the implicit accusations of bad business.
• It's totally fair to investigate quid pro quo between Kushner and foreign governments, which he of course denies, but this political attack line is steeped in financial illiteracy.

💰 Money moves: One of private equity's top 2024 storylines has been the rise of single-asset continuation funds. The primary drivers have been GPs wanting to hold their winners at the same time that LPs want liquidity.

• But here's a secondary prompt: Younger partners wanting to reset the economics, particularly as their older colleagues do less and less work. Consider it to be a case of profit repatriation.

🧾 Tax talk: Vice President Harris this week released her 82-page economic plan.

• No explicit mention of taxing unrealized capital gains for the wealthy. But she did endorse a "minimum income tax on billionaires" without further details — and that's the same language used in the WH budget proposal that introduced the unrealized capital gains provision.
• Harris reiterated plans to raise long-term capital gains rates for top earners to 28% (above current rates, below prior WH proposals), while carried interest tax treatment wasn't noted.

👱‍♂️ Speaking of presidential politics: Former President Trump this week gave a speech on manufacturing, pledging to stop U.S. businesses from "leaving for foreign lands" and that he'd successfully compel foreign companies to move manufacturing operations stateside.

• Leaving aside the tariffs and all that, doesn't this suggest that Trump should welcome Nippon Steel's purchase of U.S. Steel, rather than continuing to oppose it? After all, Nippon wants to move a ton of its money from Japanese banks into U.S. manufacturing facilities and jobs. Makes me wonder if, were Trump to win, if U.S. Steel becomes his next TikTok.

Arm (Nasdaq: ARM) approached Intel (Nasdaq: INTC) about potentially buying the latter's products division, but was rebuffed, per Bloomberg.

Why it's the BFD: This reflects how the chip industry views Intel as a wounded animal, prone to being ripped apart or swallowed whole.

• Intel may not want to sell — to Arm or Qualcomm or anyone — but sometimes the most compelling bids come when you aren't asking for them.

Zoom out: Arm went public just over a year ago, raising nearly $5 billion in the year's largest IPO. Since then, its share price has nearly tripled.

The bottom line: "As part of its turnaround efforts, Intel is separating the chip product division from its manufacturing operations. The move is aimed at attracting outside customers and investors, but it also lays the groundwork for the company to be split up." — Ian King, Bloomberg

🚑 Mendaera, a San Mateo, Calif., medical robotics developer, raised $73m in Series B funding. Threshold Ventures led, and was joined by Lux Capital, PFM Health Sciences, and Fred Moll. axios.link/4ezQayo

⚡ Utility Global, a Houston-based hydrogen and gas production startup for "hard-to-abate industries," raised $53m in Series C funding. OPG Pension Plan led, and was joined by ArcelorMittal, Ara Partners and Aramco Ventures. utilityglobal.com

• Bot Auto, a Houston-based autonomous trucking startup, raised $20m from Brightway Future Venture, Cherubic Venture, EnvisionX Venture, First Star Venture, Linear Capital, M31 Capital, Taihill Venture, and Uphonest Venture. axios.link/3TNqvKL

🚑 Mediwhale, a South Korean medical diagnostics startup, raised a $12 million in Series A2 funding. Korea Development Bank led, and was joined by Woori Venture Partners, IMM Investment, and Mirae Asset Securities. mediwhale.com

• Findable, a Norwegian startup automating property sales paperwork, raised €9m in Series A funding. Point Nine led, and was joined by KOMPAS VC, Construct Venture, and Lake Eight. axios.link/3Bozyvp

• ÄIO, an Estonian developer of sustainable oils, raised €6.1m from Voima Ventures, 2C Ventures, SmartCap and Nordic Foodtech VC. axios.link/3TLhvpk

• Dotfile, a French business verification startup, raised €6m in funding. Seaya Ventures led, and was joined by Serena and Hexa. dotfile.com

• Ensemble, an enterprise machine learning startup, raised $3.3m in seed funding. Salesforce Ventures led, and was joined by M13, Motivate, and Amplo. axios.link/4dlg4oz

Cooley's latest "Market Talks" session offers crucial insights for industry leaders.

Get up to date: Practitioners discuss capital and M&A market trends, dual-track processes and strategic exit considerations for healthcare and life sciences companies.

Watch on demand.

🚑 Allied OMS, an oral surgery managed services organization backed by DuneGlass Capital, acquired Phoenix Oral & Facial Surgery, per Axios Pro. axios.link/47DFmNL

• Equativ, a French ad tech company backed by Bridgepoint, acquired media platform Kamino Retail, per Axios Pro. axios.link/3MZlw5R

• Leonard Green & Partners agreed to buy GSI, a Westminster, Colo., provider of geohazard mitigation solutions and roadway safety services, from KKR. A source says the sale price was just over $1b. geostabilization.com

• Pinegrove Capital Partners completed its $340m purchase of SVB Capital from bankrupt SVB Financial Group.

🔥 PSI, a fire and life safety acquisition platform of The Riverside Co., acquired Alexander Gow, a Seattle provider of fire suppression systems for marine vessels, kitchen and special hazard application. gowfire.com

• OMERS will no longer make direct private equity investments in Europe, per Bloomberg. axios.link/3zMjbrU

• TPG agreed to buy a minority stake in Homrich Berg, an Atlanta-based wealth manager controlled by New Mountain Capital, at around a $1b valuation, per Reuters. axios.link/4gDqQJQ

• Chime, a banking app most recently valued at $25b, hired Morgan Stanley to lead its eventual IPO, per Bloomberg. axios.link/4eENa48

• Swiggy, an Indian food delivery company valued by VCs at $10.7b, disclosed plans to raise nearly $450m in its IPO. Sellers would include Naspers and Norwest Venture Partners. axios.link/3XYlMZ5

• Ardian agreed to sell Corob, an Italian maker of automated tinting products, to Graco (NYSE: GGG) for €230m. axios.link/3N6kxAM

• Belron, a British windshield glass repair company, is prepping an €8.1bn debt raise that would include a mammoth €4.4b dividend for shareholders Clayton, Dubilier & Rice, Hellman & Friedman, BlackRock and GIC, per the FT. axios.link/47Km4X5

• HP (NYSE: HPQ) acquired Vyopta, an Austin, Texas-based provider of monitoring and analytics software for improving workplace collaboration, Vyopta had raised over $20m from from Elsewhere Partners and Vistara. axios.link/3BeS6hu

⚽ Los Angeles FC, the MLS club, has acquired a minority stake in NWSL club Angel City FC. axios.link/3MZlH11

• LVMH (Paris: MC) invested in Moncier, a French designer outerwear label. axios.link/47ITrJA

• Rightmove (LSE: RMV), a British online real estate portal, received its fourth takeover bid from REA Group (ASX: REA), owned by Rupert Murdoch. This one is worth $8.3b, with Rightmove recently rejecting an $8.1b offer. axios.link/4eFyIZr

🚑 Arch Venture Partners raised more than $3b for its 12th fund focused on life sciences startups. axios.link/3MZfLFh

• StepStone Group raised $7.4b for its fifth private equity secondaries fund. strepstonegroup.com

• Jennifer Fox Bensimon joined Partners Capital as a managing director of co-investments. She previously was with Trilantic North America. axios.link/4eBPl8v

• Jeff Wendling will retire next year as president and CEO of the Healthcare of Ontario Pension Plan (HOOPP). axios.link/4gIcgkc

• Clear Current Capital promoted Steve Molino and Kim Flores to partners. clearcurrentcapital.com

• Updata Partners promoted Dan Moss to partner. axios.link/4di9W0l

The Commerce Department yesterday published revised GDP data for the past several years this morning based on more complete information, Axios Neil Irwin writes.

• One of the adjustments: GDP is now estimated to have grown in the second quarter of 2022 at a 0.3% annual rate.

Why it matters: Two years ago, GDP was reported as having shrunk for two consecutive quarters, sparking an exhausting discourse about whether it qualified as a recession? Turns out it was a statistical illusion.

Cooley's latest report saw deal count and invested capital climb in Q2 — with the largest deal count noted since Q4 2022.

• Median pre-money valuations rose in seed and later-stage financings, and the percentage of deals with nonparticipating preferred stock remained favorable.

Get the data.

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