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Omnivore Digest 5/28/2024

·2688 words·13 mins
  1. Inside The $200 Billion Billionaire Factory (243 words)
  2. Private Credit: For Barings Defectors, $1 Million a Year Was Not Enough - Bloomberg (201 words)
  3. Holiday Weekend Feature: Will Penn’s big wager on ESPNBet pay off? (208 words)
  4. Waste time with a masterpiece (249 words)
  5. 🍋 New Dawg Airline Just Dropped (215 words)
  6. How to enjoy doing the hard things 💪 (236 words)
  7. Which Will You Be? (202 words)
  8. 🩺 Obesity docs wanted (169 words)
  9. 🤖 Axios AM: AI’s shortage nightmare (198 words)
  10. 5 Things You Need to Know to Start Your Day: Americas (198 words)
  11. NTT Data Unit to Buy Majority Stake in Malaysia’s GHL Systems - Bloomberg (256 words)
  12. May 27, 2024 (256 words)
  13. Green Energy: Old Empires Could Be Key to a New Car Future - Bloomberg (238 words)

Inside The $200 Billion Billionaire Factory (243 words) #

Hank Tucker explains how Blue Owl, formed through a $12.5 billion SPAC merger in 2021, has greatly expanded by providing crucial financing for private equity firms. Marc Lipschultz, co-founder, emphasizes Blue Owl’s role as a “longer-term durable solution” during uncertain market conditions, such as the $1.15 billion acquisition of Checkmarx in April 2020. The company’s core private credit business has originated $100 billion in loans, boasting a 9.8% internal rate of return (IRR) since 2016.

Doug Ostrover, co-CEO, narrates his journey from high-yield credit at E.F. Hutton to founding GSO Capital Partners, which he later sold to Blackstone for $945 million. Blue Owl was built on the premise of direct lending, focusing on large loans for sectors like enterprise software, minimizing risk and maintaining low default rates.

Blue Owl has diversified into real estate and insurance assets, acquiring firms like Kuvare Asset Management and Oak Street Real Estate Capital. Since its formation, the firm has managed over $200 billion in assets as of early 2023, showcasing successful growth strategies and significant insider investments.

Tucker supports these claims with metrics such as Blue Owl’s stock performance and fund IRRs, illustrating the firm’s role in minting new billionaires in the private credit industry.

Private Credit: For Barings Defectors, $1 Million a Year Was Not Enough - Bloomberg (201 words) #

Silas Brown, Paula Seligson, and Esteban Duarte detail a surprising mass exodus from Barings LLC’s Global Private Finance (GPF) division to Corinthia Global Management Ltd., led by Paul Weightman. According to Weightman and insiders, the defectors were enticed by equity offerings at Corinthia, unlike at Barings, where even $1 million salaries fell short of the fortunes made by peers at boutique firms.

The authors describe tensions at GPF over inadequate support and unfavorable revenue-sharing as contributing to the departures. Edward James, a finance headhunter, notes the unprecedented scale of this move. The impact on Barings was significant, leading to investor distrust and a pending lawsuit alleging misuse of confidential information by Corinthia.

Weightman defended his approach, highlighting generous equity incentives to attract defectors. The article underscores the broader implications for the private credit industry, which heavily values trust and stability, as Barings’ reputation comes under scrutiny. The GPF team’s successful track record and Weightman’s aggressive tactics are seen as both a threat and a potential model for future market disruptions.

Holiday Weekend Feature: Will Penn’s big wager on ESPNBet pay off? (208 words) #

In the article “Holiday Weekend Feature: Will Penn’s big wager on ESPNBet pay off?”, author Eve Peyser explores Penn Entertainment’s strategic partnership with ESPN to rebrand their sports betting app, following the tepid success of their previous Barstool Sportsbook initiative. Peyser emphasizes the challenges ESPN Bet faces in competing with established giants like DraftKings and FanDuel, despite initial positive media coverage and strong download numbers.

Peyser supports her claims by analyzing financial data and customer feedback, highlighting ESPN Bet’s initial market capture and customer acquisition efforts. She notes that despite millions of users, Penn’s substantial investment in ESPN Bet hasn’t yet translated into sustained market share or profits, with Penn’s stock taking hits following earnings reports.

Peyser also cites qualitative data from user experiences and expert opinions, revealing significant customer service issues and skepticism about Penn’s long-term viability in the highly competitive sports betting market. Despite optimistic projections from Penn’s CEO Jay Snowden, the article concludes with a cautious outlook, questioning whether Penn has the resources and innovative capacity to challenge dominant players.

Waste time with a masterpiece (249 words) #

In the article “Waste time with a masterpiece” by The Daily Skimm, several key points are covered spanning international news, business, career trends, and the upcoming U.S. presidential election.

Regarding international news, the author highlights the global outrage following Israel’s airstrike on a Rafah camp, which killed at least 45 people. Jane Doe notes that this event has drawn condemnation from world leaders and could complicate cease-fire negotiations. Notably, the strike has intensified calls for Israel to protect Palestinian civilians.

In the business section, the article mentions Elon Musk’s startup xAI raising $6 billion, elevating its valuation to $24 billion. Doe explains this funding narrows the financial gap between xAI and its competitors like OpenAI, which Musk co-founded and left in 2018.

On career trends, Doe uses data from over 500,000 job postings to reveal a 95% decline in high-paying remote job opportunities, suggesting a managerial preference for in-person supervision and highlighting the growing friction between employees and employers regarding remote work.

Lastly, Doe discusses the “double haters” in the U.S. electorate—voters discontent with both Joe Biden and Donald Trump—and their potential impact on the election. This group might lean towards third-party candidates or abstain, making them a wildcard in predicting the election outcome.

🍋 New Dawg Airline Just Dropped (215 words) #

According to Short Squeez, Bark Air has introduced an exclusive travel option for dogs and their owners, where larger dogs typically relegated to the cargo hold can now travel in style aboard a private charter jet. The service, costing between $6,000 to $8,000 per ride, allows one human companion per pet with a round trip priced at $12,000 to $16,000. Each charter can accommodate up to 10 passengers and their pets, making it an appealing option for celebrities or families relocating.

Each dog onboard receives luxurious treatment that includes grooming, treats, and showers, along with pheromone-infused cushions to alleviate anxiety. The CEO of Bark Air, who launched their inaugural flight from New York to Los Angeles last week, reports having sold over 100 tickets and processed over 15,000 route requests, indicating high demand.

The article emphasizes the upscale experience Bark Air offers and points out that although the cost is high, it is significantly cheaper than individually chartering a flight. This surge in demand highlights the growing market in the pet industry, demonstrating that pet services are becoming increasingly significant in business.

How to enjoy doing the hard things 💪 (236 words) #

Ali Abdaal discusses different strategies for finding enjoyment in challenging activities. He shares personal anecdotes and insights from various sources to underline his points.

Abdaal mentions a personal victory of adulting as turning a mundane task, like taking out the trash, into something fulfilling by approaching it with a mature mindset. This set the tone for his reflections on feeling good about productivity (Abdaal, Section I).

Citing Jonathan Haidt’s “The Anxious Generation,” Abdaal underscores the severe impacts of social media on youth mental health, backed by compelling data and graphs. This revelation was more powerful for Abdaal when visualized through hard evidence (Abdaal, Section II).

Addressing a professional challenge, Abdaal explains how shifting his focus towards enjoying the process rather than sheer productivity led to a successful, unorthodox presentation at AdCon 2024. This decision to prioritize enjoyment over traditional preparation tactics resulted in a more engaging and effective talk (Abdaal, Section III).

Finally, Abdaal emphasizes the importance of joy in productivity again by explaining his relaxed approach to writing his email newsletter, which helped him enter a state of flow and produce enjoyable content (Abdaal, Section IV).

In essence, Abdaal suggests that prioritizing enjoyment in tasks can enhance both productivity and satisfaction.

Which Will You Be? (202 words) #

According to the Daily Stoic, the 19th-century translators of Stoicism, George Long and Thomas Wentworth Higginson, illustrate a stark moral contrast. Despite both valuing Stoic principles, Long, who married into a slave-owning family, continued to endorse slavery, even taking a slave to England. Conversely, Higginson vehemently opposed slavery, leaving Harvard to support abolition and later serving in the Union Army, eventually leading an all-Black regiment.

These differing paths illustrate a recurring dilemma highlighted by the Stoic philosophy itself, where some ancient Stoics endorsed slavery while others opposed it. The author argues that modern individuals face similar moral choices and stresses the importance of developing a personal moral compass. This enduring need for moral clarity is why Ryan Holiday wrote “Right Thing, Right Now: Good Values. Good Character. Good Deeds,” aiming to help readers cultivate their own values and character to navigate ethical decisions confidently.

Daily Stoic encourages readers to preorder the book for additional benefits, emphasizing that justice is about treating others well and contributing positively to society, not merely adhering to legal systems.

🩺 Obesity docs wanted (169 words) #

According to Maya Goldman and Tina Reed in Axios Vitals, there is a significant shortage of healthcare providers specializing in obesity care, which is increasingly problematic given the surge in the use of new weight-loss drugs like Ozempic and Wegovy. Sue Decotiis, an obesity medicine doctor, stresses the potential for error in prescribing these medications, a concern echoed by Rekha Kumar of Found, who adds that inadequate support from untrained clinicians could worsen patient health outcomes and affect insurance coverage for these expensive drugs. Ian Neeland, a cardiologist, highlights a “big gap” in translating scientific knowledge into clinical practice for obesity treatment. Data from multiple studies underscore the need for more trained specialists to manage the growing number of obesity patients effectively. The authors draw attention to the complex landscape of obesity care, where many physicians are prescribing these drugs, but specialized expertise is increasingly essential to ensure safe and effective treatment.

🤖 Axios AM: AI’s shortage nightmare (198 words) #

According to Mike Allen and Jim VandeHei, top AI executives warn that advancing AI is threatened by shortages in essential resources like electric power, computing power, chips, data, and engineering talent. They emphasize that large amounts of data and computing power, as well as significant human technological input, are needed to develop human-like AI. Allen and VandeHei elaborate that only massive tech firms can afford the resources to mitigate these bottlenecks, which paradoxically exacerbates scarcity for smaller AI startups.

Mike Allen further discusses the critical role of these large companies in funding extensive infrastructure projects, comparing their economic influence to that of virtual nation-states. By leveraging data from industry experts, such as Jack Clark of Anthropic, Allen highlights that the U.S. faces impending power limitations and talent shortages aggravated by restrictive immigration policies.

Allen advocates for proactive governmental policies to boost domestic production of key resources like chips and energy to maintain a competitive edge in AI. He concludes that without sufficient resources, AI firms risk stagnation and losing ground to international competitors, primarily China.

5 Things You Need to Know to Start Your Day: Americas (198 words) #

David Goodman argues that US stock futures are poised for a higher open, supported by a week of key data releases, including house price and confidence data, GDP reports, and the personal consumption expenditures price index, which is the Fed’s preferred inflation measure. Goodman states that the Federal Reserve has a busy week with various speakers and the Beige Book release, emphasizing Neel Kashkari’s caution regarding interest-rate cuts.

Goodman highlights the significance of the T+1 settlement rule, which aims to reduce financial risks by shortening the trade settlement cycle, though potential issues are anticipated with its implementation. He notes that Apple is experiencing a rebound in China, with iPhone shipments increasing by 52% in April, backed by retail discounts, leading to a 2.2% rise in pre-market trading.

Additionally, Goodman mentions Bitcoin’s decline due to activities by the failed Mt. Gox exchange, causing a drop of up to 3.1%. Using these points, Goodman identifies significant market movements and contextualizes their probable impacts on the overall economic landscape.

NTT Data Unit to Buy Majority Stake in Malaysia’s GHL Systems - Bloomberg (256 words) #

According to Elffie Chew, China has established the largest semiconductor investment fund in its history, with the National Integrated Circuit Industry Investment Fund’s third phase amassing 344 billion yuan (approximately $47.5 billion). This move, as reiterated by Chew, aims to bolster the domestic chip industry amidst escalating tensions with the United States, which has been ramping up restrictions on China’s access to advanced chips and equipment. The latest fund, known as Big Fund III, highlights the renewed commitment of Xi Jinping’s administration to achieve self-sufficiency in semiconductor production.

Chew notes that major Chinese chip stocks, such as Semiconductor Manufacturing International Corp. and Hua Hong Semiconductor Ltd., saw significant gains following the announcement. The Ministry of Finance is identified as the largest shareholder in this initiative, with additional contributions from investment firms owned by Shenzhen and Beijing local governments. These efforts are part of a broader strategy to counteract the impact of U.S. sanctions on key companies like Huawei Technologies Co.

Elffie Chew points out that, historically, China’s substantial investments in this sector have not always yielded expected results, citing leadership frustrations and corruption investigations linked to previous fund phases. Despite these setbacks, China is intensifying its focus on less-advanced, yet strategically vital, chipmaking capabilities, which may receive funding from the newly established Big Fund III.

May 27, 2024 (256 words) #

Heather Cox Richardson discusses President William Ruto’s state visit to the White House, marking a significant milestone in U.S.-Kenya relations. According to Richardson, the Biden administration is keen on strengthening ties with African nations, acknowledging the continent’s growing demographic significance and advocating for its representation in global forums like the G-20. Richardson uses demographic data, highlighting Africa’s young median age and projected population growth, to underscore the continent’s global importance.

Richardson notes the administration’s initiatives, totaling over $55 billion, aimed at aiding African nations in enhancing security, democratic institutions, and civil rights. Vice President Kamala Harris’s 2023 tour to Africa emphasized democracy and countered Russian influence, coinciding with U.S. investments in digital inclusion, such as the MADE alliance aiming to provide digital access to millions in Africa.

Richardson also juxtaposes these diplomatic efforts with setbacks, like the 2023 Niger coup, which led to increased Russian presence. She highlights Kenya’s tech innovations, President Ruto’s focus on economic development, and Kenya’s leading role in a UN-backed initiative in Haiti, despite internal opposition and logistical challenges. Ruto’s emphasis on African potential and technological advancement, supported by significant budget allocations, aligns with U.S. ambitions to revitalize the U.S.-Africa narrative.

Green Energy: Old Empires Could Be Key to a New Car Future - Bloomberg (238 words) #

Tim Culpan contends in his Bloomberg article that hydrogen fuel, particularly green hydrogen, holds significant promise for a sustainable future, but its broader adoption hinges heavily on the support of diversified business conglomerates, especially those in North Asia. Culpan illustrates that hydrogen can be stored similarly to gasoline and used in fuel cells to produce electricity and water, making it an appealing energy source for electric vehicles. He points out that the green hydrogen production process can be sustainable if powered by renewable energy sources.

Culpan emphasizes that significant infrastructure investments are needed for hydrogen to become mainstream, citing Tesla’s model as a rare example of an end-to-end solution. He argues that traditional oil suppliers and car manufacturers are unlikely to lead this transition due to current industry dynamics and low adoption rates of hydrogen vehicles.

He highlights Hyundai, Honda, and Toyota as potential leaders, thanks to their extensive industrial networks. These companies presented hydrogen-powered solutions at a recent expo, demonstrating their commitment and capability to develop a comprehensive hydrogen infrastructure. Culpan asserts that the success of hydrogen fuel depends on the efforts of these conglomerates to leverage their diverse resources and integrate every link in the supply chain, especially as the window of opportunity narrows with the growing popularity and decreasing costs of battery electric vehicles.