☕️ Hybrid pivot

Good morning.

APRA’s proposal to phase out $43b in bank hybrids by 2032, due to risks to retail investors during crises like Credit Suisse’s collapse last year, is raising concerns that local investors will shift to much riskier private credit or equity bets.

“It takes away a market for investors who will have to look elsewhere,” Yarra Capital’s Roy Keenan told the AFR.

Others, like Nicholas Chaplin from Seed Funds Management, called the move unnecessary. Not everyone agreed — Milford Asset Management portfolio manager Anthony Ip reckons it’s a positive, as it simplifies banks’ capital structures and removes the risk of mum and dad investors being bailed in during the next banking downturn.

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Market movers

Paladin Energy shareholders must be feeling somewhat enriched after the Fission Uranium deal got the green light from the Canadians.

Shares surged 8.5%, partly offsetting a 15% plunge over last month, after the 67.9% approval squeaked past the 66.66% threshold.

The quick sync

• Boman Group partner Vincent Lu says Australian VCs need to improve their communication with LPs (Capital Brief)

• Investors in hedge funds extract lower fees for subpar returns as ExodusPoint waives fees if funds underperform cash. (WSJ)

• Following backlash over a failed demerger and new leadership, investors are falling back in love with AGL. (Capital Brief)

• PE fights insurance for US$15 trillion ($22.53 trillion) retirement prize  (Bloomberg)

• Is it too late for a carbon price? The Climate Change Authority says yes — and experts agree. (Capital Brief)

Trading floor

M&A

• Viburnum Funds' takeover bid caused a 25% turnover in GTN’s register, driven by First Sentier's portfolio transitions. (AFR)

• ARN Media will now focus on growing its Hong Kong outdoor advertising business instead of pursuing a merger with Southern Cross, following previous rejection of its proposal. (The Australian)

• QIC and HMC Capital are leading contenders in the $400m iseek data center sale, as part of the broader trend in data center acquisitions. (AFR)

• Brookfield and its lenders are finalizing a refinancing deal for its $4.4bn Healthscope investment, keeping all private hospitals in one structure. (The Australian)

• Audeara is entering the Chinese market via a partnership with Hong Kong's Eastern Asia Technology. (BNA)

• Investors are questioning if REA is overpaying for UK’s $10bn Rightmove. (The Australian)

• BGH Capital, Blackstone, KKR, Pacific Equity Partners, and EQT are competing for Singapore Post’s $1bn Australian business, including Freight Management Holdings and CouriersPlease. (The Australian)

Capital Markets

• Midea Group is raising HK$26.97bn ($5.18bn) through Hong Kong's largest IPO in over three years. (Capital Brief)

• Square Peg is raising $560m for its sixth fund, leveraging its impressive Canva returns and promising future investment potential. (AFR)

• NextDC is raising $750m to expand into Asia, driven by AirTrunk’s $24bn sale to Blackstone. (AFR)

• Paladin Energy shares rose after Fission Uranium shareholders approved a takeover. (Capital Brief)

• Kinetic Group's owners, OPTrust and Foresight Group, are targeting a $4 billion exit and have raised their EBITDA forecast to over $500m for FY2025 to entice bidders. (AFR)

VC

• Number 8 Bio raised $7m to cut livestock methane emissions and explore profitability improvements in fermentation processes. (Capital Brief)

• Nick Hazell's new venture, Algenie, has raised $1.1m to develop algae-based alternatives to fossil fuels and plastics. (Startup Daily)

• Directo raised $2m to expand its B2B marketplace for the pharmacy sector, digitizing the Australian pharmacy supply chain. (Capital Brief)

People moves

• None

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The watercooler