A Middle Eastern sovereign wealth fund last month sued to stop a Houston-based private equity firm from selling a portfolio company to a continuation vehicle, with both sides yesterday agreeing to enter arbitration.

• The deal is on hold. For now.

Why it matters: This dispute gets at the fundamental conflict between LPs and GPs when it comes to CVs, which may have just peaked, if you boil away all goodwill and assumption of positive intent.

On the docket: Abu Dhabi Investment Council is a limited partner in PE funds raised in 2011 and 2014 by Energy & Minerals Group. They both hold stakes in Ascent Resources, a large natural gas company that also counts First Reserve among its investors.

• ADIC claims that EMG decided that it could maximize its value for Ascent via a CV strategy.
• It then alleges that EMG tried to force an LP vote on very short notice, provided different data to different investors, and refused to let the LPs confer in private. ADIC also casts doubt on EMG obtaining the requisite votes it claims to have obtained.
• Neither side responded to Axios' request for comment.

The big picture: General partners often claim that they form CVs for their best portfolio companies, the ones they just can't yet bear to part with. Almost as a favor to LPs desperate for liquidity ("We're not selling, but if you need to...").

• LPs, however, are often skeptical but feel boxed in. If they don't participate, might they be blackballed in the next fundraise?
• There certainly are amicable CV situations in which everyone expects to benefit, but there's just as many that create LP unease.

Zoom in: ADIC's complaint, filed in Delaware Chancery Court and recently unsealed, lays out a different narrative. It alleges that EMG told existing LPs that Ascent was in bad shape, unable to go public or be sold, while telling prospective CV investors the opposite.

• Moreover, ADIC claims that the CV would have reset management fees and carry on Ascent in a way that would have benefited the general partner, which is generally frowned upon.
• It's also not too surprising, given that EMG hasn't raised a new fund since 2019 (i.e., the fee stream is running dry).

Look ahead: An arbiter is expected to render a final decision by Feb. 27, 2026, before which EMG has pledged not to complete the CV transaction.

Netflix (Nasdaq: NFLX) today agreed to buy the studio and streaming assets of Warner Bros. Discovery (Nasdaq: WBD) at an enterprise value of nearly $83 billion, besting Paramount Skydance and Comcast.

Why it matters: Netflix gets the Hollywood studio it's never had, which is both a strategic and symbolic victory.

Zoom in: WBD will spin off CNN and its other cable networks in Q3 2026, after which Netflix will buy each WBD share for $23.25 in cash and $4.50 in Netflix stock.

• The deal still requires government approvals, which are no sure bet in either the U.S. or Europe.

The bottom line: I got it wrong yesterday in writing that Paramount raised its breakup fee as a sign of regulatory confidence. It was a sign of desperation, as further evidenced by a whiny letter to the WBD's board.

• DayOne Data Centers, a Singaporean data center operator backed by SoftBank, is in talks to raise more than $2b in Series C funding, per Bloomberg. Other existing investors include Coatue and GDS. axios.link/48CN37A

• Iceye, a Finnish satellite developer, raised €200m (including €50m secondary) at a €2.4b valuation led by General Catalyst. axios.link/4oFATkd

• Multifactor, an SF-based security platform for agentic AI, raised $15m in seed funding. Nexus Venture Partners led, joined by YC, Taurus Ventures, Honeystone Ventures, Flex Capital, Pioneer Fund, Ritual Capital, and Liquid2 Ventures. axios.link/4pPSk2A

• Yuv, a London-based hair color lab system, raised $12m in Series A funding. Nineyards Equity led, joined by VNV Global. axios.link/4pWKZyx

• Guide Labs, an SF-based developer of an interpretable LLM, raised $9m. Initialized Capital led, joined by Tectonic Ventures, YC, and Lombardstreet Ventures. axios.link/3YeEqex

• Ply, an NYC-based inventory and purchasing platform for contractors, raised $8.5m led by Ferguson Ventures and joined by Primary and SignalFire. axios.link/48xvLc2

• LizzyAI, an HR interviewing platform, raised $5m in seed funding. NEA led, joined by Speedinvest and Zero Prime Ventures. axios.link/445wDDp

🚑 Radical Health, an SF-based developer of an "AI cancer doctor," raised $5m in pre-seed funding. Khosla Ventures led, joined by Protagonist, Entrepreneurs First, Headwater VC, and Transpose Platform. axios.link/3Ks4T5i

• Govstream.ai, a Seattle–based developer of permitting tools for local governments, raised $3.6m in seed funding. 47th Street Partners led, joined by Nellore Capital and Ascend. axios.link/48RXo0L

• Hypercritical, a London-based industrial software development tool, raised £2m in pre-seed funding led by Join Capital. axios.link/3Kz4vBR

• WEVO, a Boston-based customer research platform, raised funding from Accenture Ventures. axios.link/3KdZjn7

• Canton, a network of onchain assets, raised funding from BNY, iCapital, Nasdaq, and S&P Global. axios.link/48BabmO

• 26North agreed to buy a 51% stake in Middleby's (Nasdaq: MIDD) residential kitchens business at an $885m enterprise value. axios.link/447TM8j

• Big Yellow Group (LSE: BYG), a U.K. self-storage group, ended takeover talks with Blackstone. axios.link/3XB8h0K

• Castik Capital shortlisted EQT, PAI Partners, and Stone Point for German insurance broker Global Group, which could fetch around €2b, per Bloomberg. axios.link/4oIdA9D

⚽ EQT held talks to buy a minority stake in German soccer club Bayern Munich, but negotiations collapsed after Bayern CFO Michael Diederich to joined Deutsche Bank, per the FT. axios.link/4oBUDpa

• Vanco, a Great Hill Partners portfolio company, acquired ACS Technologies, a Florence, S.C.-based provider of church management software and services. axios.link/44PK6iR

• WOW Carwash, a Garnett Station Partners portfolio company, acquired Las Vegas-based Blu Car Wash. axios.link/4pOpa3S

⚡EcoCeres, a Hong Kong-based sustainable fuel producer backed by Bain Capital and Kerogen Capital, may list in Hong Kong instead of in London, per Bloomberg. axios.link/4iFRLWU

⚡ Leapfrog Acquisition, a SPAC targeting non-U.S. energy and infrastructure, raised $125m in its IPO. axios.link/4m7ff7n

• Mayflower Acquisition, a SPAC formed by Noam Gottesman (Tom's Capital) and Jeremy Isaacs (ex-Lehman Bros.), raised around $500m in a Lond IPO. axios.link/4avvk4r

• Moore Threads, a GPU manufacturer referred to as "China's Nvidia," raised $1.1b in a Shanghai IPO and saw shares soar more than 400%. It previously raised over $1b in private funding from firms like 5Y Capital, Bohai, Bluetrum Technology, Zhonghe Capital, and Houxue Capital. axios.link/3KIEdxa

⚡EnergyHub, a Brooklyn, N.Y.-based grid services company, acquired demand response company Resideo Grid Services. axios.link/3MhSNMG

🚑 Lightbeam Health Solutions of Dallas acquired Syntax Health, an Atlanta-based SaaS platform for value-based contracting that had been seeded by Redesign Health. axios.link/4ptGRGf

• Lone Star Funds agreed to sell SPX Flow, a Charlotte, N.C.-based provider of industrial processing solutions, to ITT (NYSE: ITT) for $4.78b in cash and stock. axios.link/3XyJGJV

• Paribu, a Turkish digital assets platform, bought CoinMENA, a Bahrain-based crypto exchange backed by Oasis500, Klein Blue Capital, and Yolo Investments. axios.link/48G8Yel

• Barington Capital Group has taken around a $25m stake in Bill.com (NYSE: BILL) and is pushing for a sale, making it the third activist investor pressuring the fintech company, per Bloomberg. axios.link/4oD6nrg

• PepsiCo (Nasdaq: PEP) is nearing a settlement with Elliott Investment Management, which has called on the food giant to divest some brands, per the WSJ. axios.link/48H2NXl

• Vesant Media Group, the cable network group being spun out of Comcast (Nasdaq: CMSCA), agreed to acquire Free TV Networks, an Atlanta-based group whose channels include Outlaw and Busted. axios.link/48IkNke

• Crescendo Equity Partners, a South Korean PE firm, is targeting $1.25b for its fourth fund, per PEI. axios.link/4pUExYQ

• Nexus Venture Partners raised $700m for its latest fund, around half of which is allocated to Indian startups. axios.link/3KHtPpp

• Jonathan Coslet joined Hunter Point Capital as a partner. He previously was chief investment officer and vice chair of TPG. axios.link/4iI3zbh

• SemperVirens, an SF-based VC firm, promoted Raquel Scott to partner and Colin Tobias to general partner. sempervirensvc.com

2025 is shaping up to be the second-busiest year ever for dealmaking.

• LSEG reports $4.02 trillion in global M&A so far, behind only YTD 2021 at $5.2 trillion. 2025 remains behind the 2015 total of $4.23 trillion, but that gap won't last long.
• Same goes for M&A involving U.S. targets, which would surpass the $2 trillion mark with Netflix's deal for Warner Bros. Discovery. The 2021 YTD figure was $2.3 trillion.