When Jared Kushner formed Affinity Partners in 2021, and then raised most of his first fund from Middle Eastern sovereigns, he took great pains to say that the endeavor was conceived after he left the White House.

• He bristled at suggestions of quid pro quo, but also understood that the whiff was strong enough that it had to be addressed.
• Kushner also insisted that his government days were in the past, even if his father-in-law regained power. Full-time private equity guy in Miami, not a D.C. denizen hoping to boomerang.

But it hasn't quite worked out that way, ressurecting old questions as Affinity begins premarketing its second fund.

• Kushner has spent the vast majority of his time since last summer on geopolitics, as a volunteer at the behest of President Trump. First on Israel/Gaza. Then on Russia/Ukraine. And most recently a trio of meetings with Iran, prior to the war.

Affinity, meanwhile, has been operating as if it's business as usual.

• Its 30-person team now has committed around 80% of Fund 1, including in the pending $55 billion buyout of video game giant Electronic Arts that also includes Saudi Arabia's Public Investment Fund and Silver Lake.
• On that deal, Affinity basically acted as the buy-side banker for lead investor Saudi PIF, which also is Affinity's anchor limited partner.
• Affinity also was part of Paramount's original bid for Warner Bros. Discovery, but later backed out.

Which brings us to Fund 2.

• Affinity isn't formally in market yet, but has begun discussions with Saudi PIF because of contractual "first look" rights, as first reported by the New York Times and confirmed by Axios.
• Its internal performance data includes a 36% gross IRR and 25% net IRR, albeit almost all unrealized.

Those numbers matter more for Affinity than they would for other firms.

• Kushner was mocked by some as a PE neophyte who raised his fund on the back of political connections — accusations that were emboldened by reports that Saudi PIF's investment staff recommended against the commitment but were overruled by Saudi Crown Prince Mohammed bin Salman.
• All of that may have been true, although now he can simply point and say: "Scoreboard."

Kushner is said to still brush aside the idea of conflicts between his side hustle and his day job — even if some of his biggest LPs are directly impacted by what's happening in Iran, and have ongoing reason to remain in Trump's good graces.

• And he may have a legitimate case. Again, scoreboard. Plus, there are plenty of other Wall Street and PE bigs who serve on various presidential councils and the like.

The complications, however, is that Kushner recognized at least the appearance of conflicts back in 2021, which is why he was so adamant about Affinity's founding story.

• One remedy would be to take a leave from Affinity. Another would be to eschew Middle Eastern sovereigns as LPs, save for its obligation to PIF.
• But neither sounds like it's going to happen. Instead, Affinity is left with a situation in which its headlines will get bigger as its fundraising progresses — Miami linked to D.C., regardless of the distance or design.

UniCredit of Italy launched an unsolicited bid to increase its stake in Germany's Commerzbank to over 30%.

Why it's the BFD: This would trigger a one-time takeover offer, per German securities law.

• It also may persuade Commerzbank and the German government to engage in talks after 18 months of resisting UniCredit's overtures.

By the numbers: UniCredit is offering to buy shares at €30.80 a piece, representing a 4% premium over Friday's closing price and implying a €35 billion enterprise value.

• It doesn't need many, as it currently holds a 26% direct stake and nearly another 4% via total return swaps.
• The German government holds a 12.5% position.

The bottom line: "The European Central Bank is pushing for more banking consolidation, especially cross-border, to counter the growing presence of U.S. banks in Europe. But that effort has met with widespread opposition from national governments, which want to retain influence over their banking sectors." — Reuters

🚑 Unnatural Products, a Santa Cruz, Calif., developer of macrocyclic peptide therapeutics raised $45m in Series B funding. The Venture Collective led, joined by Droia Ventures and insiders Merck Global Health Innovation Fund, Artis Ventures, and First Spark Ventures. axios.link/4skMW9C

⚡ Halcyon, an SF-based energy data startup, raised $21m in Series A funding, per Axios Pro. Energized Capital led, joined by Zero Infinity Partners, Congruent Ventures, Obvious Ventures, and Sabanci Climate Ventures. axios.link/4bkV4Rr

• Ironlight, developer of a regulated marketplace for tokenized securities, raised $21m in Series A funding from Sei Development Foundation and Laidlaw Private Equity, per Axios Pro. axios.link/40wKwbG

• Zero RFI, an SF-based consolidator of construction management firms, raised $14m in seed funding led by General Catalyst, per Axios Pro. axios.link/46XMci2

• Great Sky, developer of a brain-computer interface, raised $14m in seed funding. Bison Ventures led, joined by Matchstick Ventures and Range Ventures. axios.link/40zjCQf

🚑 Understood Care, an NYC-based patient advocacy startup, raised $8.4m, with plans to raise a $15m Series A round, per Axios Pro. Backers include Rethink Education, Zeal Capital Partners, 1984 Ventures, and YC. axios.link/3P8LmJ3

• Alomana, an Italian developer of an AI operating layer for enterprise workflows, raised €4m led by CDP Venture Capital. axios.link/4rETqPj

• WhiteBridge AI, a Vilnius-based people search and research startup, raised $3m in seed funding. FirstPick VC led, joined by First Degree, NGL.VC, Scalewolf.VC, BADideas.fund, Nectolabs, and Plug and Play. axios.link/3P7Zlio

• Bain Capital agreed to buy the wealth management unit of Australian investment manager Perpetual (ASX: PPT) for A$500m. axios.link/4smCmib

• Hale Capital acquired Apex Analytics, a provider of real estate data and valuation solutions. axios.link/4uuKmit

• Mechanix Wear, a Gryphon Investors portfolio company, acquired OTEX, a Rochester, N.Y.-based maker of personal protective equipment. axios.link/416mmot

• Norvestor agreed to launch a $226m takeover offer for Zalaris (Oslo: ZAL), a Norwegian BPO company. axios.link/4cL6z5C

• Oaktree, a unit of Brookfield, offered to buy South Carolina insurer Sentinel Atlantic Coast from Advantage Capital. axios.link/40zheZO

• Trimlite, a Wynnchurch Capital portfolio company, acquired Harris Door & Millwork, a Pendergrass, Ga.-based distributor of interior and exterior doors. axios.link/471V99W

No companies plan to go public this week on U.S. exchanges.

• PhonePe, an Indian payments and financial services firm, has paused plans to raise $1.05b at up to a $10.5b valuation in a domestic IPO, due to geopolitical tensions. Backers include Walmart, General Atlantic, Ribbit Capital, Temasek, TVS Capital, and Tiger Global. axios.link/4rJjQj6

• Voyager Acquisition II, a SPAC led by Adeel Rouf (ex-Cohen & Co.), filed for a $220m IPO. axios.link/4s5hkV8

• CPPIB will seek to sell around a $1.5b portfolio of Asia-focused PE fund stakes, per Bloomberg. Underlying managers would include Bain Capital, Hillhouse, and PAG. axios.link/3NjBPym

• Public Storage (NYSE: PSA) agreed to buy rival National Storage Affiliates (NYSE: NSA) for $10.5b in stock. The combined company would have around a $77b enterprise value. axios.link/4bLekr9

🚑 Amplifon (Milan: AMP) agreed to buy the hearing aid business of GN Store Nord (CSN: GN) for around $2.6b. axios.link/4skxCK8

• UpGrad, an Indian ed-tech valued at $2.25b in 2024, agreed to acquire rival Unacademy, an Indian ed-tech whose valuation had dropped from $3.4b in 2021 to less than $500m. No pricing terms of the all-stock deal were disclosed. UpGrad backers include Temasek, while Unacademy investors include General Atlantic, Nexus Venture Partners, and SoftBank. axios.link/418stbQ

• Celero Capital raised a CV for Reledo Holding, an acquisition platform for soft facilities management companies. axios.link/3NkuTB6

• Triton Partners raised €5.5b for its sixth flagship midmarket PE fund. axios.link/3Nhvh3h

• Dillard Watt joined Quad-C Management as director of biz dev. He previously was with Harris Williams. axios.link/4bwLPwf

The S&P 500 has fallen just 3% for the year, but that masks some big-time volatility, Axios' Emily Peck writes.