Hello there,
SpaceX kicks off its IPO roadshow today, keeping the AI momentum coursing through public markets. Over on private markets, it’s a different story. Swiss asset manager Partners Group is flagging more large withdrawal requests at some of its funds. It’s potentially a sign that the investor anxiety we’ve seen over private credit funds could be spilling over to other asset classes.
Wealthy individuals have sought to pull their money from private credit funds in recent months as a slew of negative headlines around the asset class, liquidity limits and worries around AI disruption to software firms unnerved investors.
Ultra-rich folk are exactly the sort of people Elon Musk is targeting for his SpaceX IPO. As my colleague Echo Wang revealed this week, Musk is upending all sorts of Wall Street conventions for this listing, including setting a target price, as opposed to a target range, ahead of the roadshow.
But he’s also planning to give individual investors a much larger role in allocations and is relying on Wall Street lenders to pitch it to their ultra-rich clients. In the past, bankers focused on large asset managers, but not this time. An institutional investor who banks with Goldman Sachs told Reuters that when he approached it about buying SpaceX shares, he was told SpaceX IPO allotments are a "David Solomon-level decision," referring to the firm's CEO.
Musk’s plan to retain control of SpaceX has raised concerns about what its listing means for public markets. But he is at least using the market to raise funds: a record $75 billion is the target.
Over in India, stock market debuts these days are less about raising money and more about sending billions back to HQ, at least for foreign companies. My colleague Vibhuti Sharma reports on how foreign-based companies have pocketed nearly $5 billion from secondary-offering IPOs. The outflow of money is adding to the rupee’s weakness and has raised questions about what it means for public markets as vehicles for raising capital.
Now what, you may ask, does a flesh-eating New World screwworm have to do with the Fourth of July? Well, the discovery of just one of these parasites on a farm in Texas spells trouble for the cost of the annual Independence Day cookout. And that’s bad news for President Donald Trump. Affordability is one of the defining issues for voters ahead of the November midterms and the price of a hamburger is one of those things that sticks in the national psyche.
The national U.S. cattle herd is already at a 75-year low due to drought and high feed costs and that has sent the retail price of red meat to record highs. Any further disruptions to supply from a screwworm outbreak could send them higher still.
And finally, school’s out for a lot of U.S. colleges already this summer but could it be, to quote Alice Cooper, out forever? This week’s Reuters Econ World podcast looks at the economics of U.S. higher education and why so many small, private colleges are closing. Watch it here.
As always, I'd love to hear from you by hitting reply on this email or finding me on LinkedIn.
Carmel
