Alternative Investing Report - February 14, 2025

*as of 2/13; Sources: S&P, BTC, FTSE, DJRE, 30YM

There were two major IPOs for private equity-backed companies on Thursday, with space startup Karman and cybersecurity company Sailpoint both going public. Karman, backed by private equity firm Trive Capital, raised $506 million at a $3 billion valuation with shares opening at $22 each, above the expected range. The first day of trading saw the share price jump a whopping 36.6% to more than $30 per share. Sailpoint originally went public in 2017 before PE firm Thoma Bravo took it private in 2022 at a $6.9 billion valuation. In its second IPO go-around, the company raised $1.38 billion at a $12.6 billion valuation, though the share price fell by 4.4% in its first day of trading.

➨ TAKEAWAY: There are high hopes for IPOs in 2025, with a number of major private startups rumored to go public. Both space and cybersecurity have been hot sectors among pre-IPO companies, and Karman’s initial performance is promising for other space startups. Investors responded well to their increasing revenue and profits. On the other hand, Sailpoint lost $236 million in the last three quarters it reported, which was an improvement on the year before, but investors’ initial response to the offering was tepid. Both companies’ performance is worth monitoring going forward, as successful IPOs can lead to more companies going public.

Vincent founder Slava Rubin and Sacra co-founder Jan-Erik Asplund looked at Neuralink, the Elon Musk-founded neurotechnology company. They talked about the company’s future prospects and path to revenue, the ethical concerns behind the technology, and the demand for all Elon-related stock.

Asset manager Oaktree Capital Management raised $16 billion for its Opportunities Fund XII, the biggest ever distressed-debt fund, narrowly beating out its 2021 predecessor, which raised $15.9 billion. The fund lends money to companies that are on the verge of or in default and are in urgent need of capital. Oaktree has already invested $7 billion of the new capital and expects to lend to around 150 businesses in total.

➨ TAKEAWAY: Private credit funds had the best performance of any type of fund in the 1-year period through Q3 2024, returning an average of 9.5%. However, in Q3 alone, it lagged behind real estate, venture capital, and private equity funds. Within private credit, distressed funds had the lowest 1-year average return, as rates came down and opportunities became scarcer. Still, Oaktree’s success in fundraising shows that investor demand for the asset class is still strong, and private credit is one of the beneficiaries of a higher interest rate environment.

🤖 AI can’t do this job (yet): According to research by the BBC, four major AI chatbots (from OpenAI, Microsoft, Google, and Perplexity) are unable to summarize current events, with inaccurate answers and distortions. A whopping 19% of AI answers contained factual errors, and over half of the answers had “significant issues.”

🏈 Tom Brady buys CardVault: The football GOAT is bringing his star power to the collectibles world, acquiring a 50% stake in the sports card and memorabilia retailer CardVault, which will change its name to “CardVault by Tom Brady.”

🏡 Price cuts increasing: A record high 23% of listings on Zillow had a price cut in January, as newly pending sales fell 3.6% year over year, both good signs for buyers as sellers are starting to show more urgency to move their properties.

🪙 Crypto kidnapping: Six men have been charged with allegedly kidnapping four people and forcing them to transfer $15 million worth of crypto, but five of the six are believed to have fled to China. The lesson here is to keep your crypto balances a tightly guarded secret.

🚀 Olipop is now a unicorn: The “healthy” prebiotic soda brand Olipop raised a $50 million round at a $1.85 billion valuation, significantly above its latest public valuation of $200 million back in 2022. It became profitable in 2024, and sales doubled year-over-year to over $400 million.

🎨 Trump’s tariffs worry art world: While artwork has been exempted from the 17.5% tariff rate on goods from China, major galleries and art fairs are paying close attention, as implementation of tariffs would have a chilling effect on the art market.

Monday: 🎻 Stradivarius sale, 🤖 DeepSeek bans
Tuesday: 💰 Gold price all-time high, 🚀 Klarna IPO
Wednesday: 🤖 AI Action Summit, 📊 CFPB Status
Thursday: 📊 CPI Report, 🏡 Hottest markets

Have a great weekend!