Conventional wisdom entering 2024 was that private equity dealmaking would surge on a series of interest rate cuts by the U.S. Federal Reserve.

Fast forward: The prediction was right, but for the wrong reasons.

By the numbers: U.S. private equity activity is up 54% year-over-year, with nearly $132 billion of deal value, according to LSEG.

• This is slightly lower than the overall U.S. M&A increase of 59%, but easily outpacing global M&A (35%) and global private equity (25%).

The big picture: Rates haven't budged and optimism for multiple cuts has been fading as the year has progressed. Nonetheless, U.S. private equity activity has accelerated.

• One month ago there were 77% odds of at least one cut by July, but now that's down to 32%.
• Domestic private equity was up 34% through the end of March. Again, the figure is 54% through last Thursday.

Behind the scenes: There are several reasons why the market is defying the macro.

• The simplest is that private equity is still sitting on record amounts of dry powder, and the industry has never shown an appetite for curbing fund sizes.
• And those inflows are expected to continue, with State Street this morning releasing survey data showing that "the rotation from public to private assets within portfolio allocations will grow further in the coming years."
• Moreover, the confluence of high equity values and interest rates have inspired many companies to sell. This includes companies owned by private equity, as so much dealflow now is sponsor-to-sponsor hot potato.

What to watch: How investors react if the Fed doesn't cut rates at all before Labor Day. Based on recent experience, it might not amount to more than disappointed shrugs.

The FDIC seized Republic Bank, a small Philadelphia lender, and sold most of its assets and liabilities to Lancaster, Pa.-based Fulton Financial (Nasdaq: FULT).

Why it's the BFD: Because of how unusual this is, despite post-SVB concerns about regional bank failure contagion. In fact, Republic Bank is the year's first U.S. bank failure.

The bottom line: "Republic is small enough to fail, and none of its depositors are going to lose money, not even the ones with more than $250,000 in the bank. But its failure shows that the Fed's rate hikes continue to hurt bank asset values." — Felix Salmon, Axios

🚑 Amae Health, an SF-based provider of care for severe mental health illnesses, raised $15m in Series A funding. Quiet Capital led, and was joined by Healthier Capital, Baszucki Group, Mike Volpi, and insiders Bling Capital, 8VC, Virtue, and Able Partners. axios.link/4bbNUvS

• Edia, a New York-based online math learning platform, raised $9.4m led by Felicis. axios.link/3QmhCpW

• X Shore, a Swedish electric boat maker, raised €8.5m in new funding. axios.link/3JC6W2q

🚑 Klineo, a French platform for cancer clinical trials, raised €2m led by BPI France. axios.link/49RNYzK

🚑 Prescriby, an Icelandic-Canadian treatment management platform for addictive medication, raised €2m led by Crowberry Capital. axios.link/4bib6s3

🌎 Kubik, a Kenyan plastics upcycler, raised $1.9m in seed extension funding from African Renaissance Partners, Endgame Capital, and King Philanthropies. axios.link/3Wkx5ud

• Glaut, an Italian conversational survey startup, raised €1.4m led by Italian Founders Fund. axios.link/4dfuUyd

• Apollo, KKR and Stonepeak are weighing billions of dollars of investment into a joint venture to fund Intel's (Nasdaq: INTC) chip fab in Ireland, per Bloomberg. axios.link/4aRkhA7

🎵 Blackstone once again topped a rival takeover bid for Hipgnosis Songs Fund (LSE: SONG) from Concord, the music rights investment firm backed by Apollo, with Blackstone's latest offer valuing Hipgnosis at nearly $1.6b and gaining the support of the firm's board. axios.link/4dlxkv9

• Bruin Capital agreed to buy PlayGreen, a Dutch provider of turf management solutions, for around $120m. axios.link/4bfl6T7

🐔 Carlyle is in talks to buy a 35% stake in the operator of Kentucky Fried Chicken stores in Japan from Mitsubishi Corp., and then plans to take the firm private, per Nikkei. axios.link/49Xs8KY

⚡ Catalyze, a Houston-based portfolio company of EnCap Investments and Actis, bought 12 community solar projects in New York from BW Solar. axios.link/4bfbMhX

🚑 Council Capital invested in OccMD, a Dallas-based occupational injury medical management company. occmd.com

• FountainVest Partners and Unison Capital are in advanced talks to buy Japanese jeweler Tasaki & Co. from MBK Partners for more than $600m, per Bloomberg. axios.link/3xR8Cm6

• I Squared Capital and TDR Capital beat out Apollo for Applus+ (Madrid: APPS), a Spanish provider of testing, inspection and certification services, with a €1.65b bid. axios.link/49WYENp

🚑 Manipal Hospitals of India agreed to buy a 87% stake in rival hospital chain Medica Synergie for around $168m. Manipal backers include Temasek, TPG, CalPERS, Mubadala, and Novo Holdings. axios.link/4dk1GOQ

• Niobara Capital and Prysm Capital invested $175m for a control stake in Polar Semiconductor, a Bloomington, Minn.-based foundry, from Allegro MicroSystems (Nasdaq: ALGM) and Sanken Electric (Tokyo: 6707). Both Allegro and Sanken retain minority positions. polarsemi.com

⚡ Pine Gate Renewables, an Asheville, N.C.-based clean energy project owner and operator, raised $650m from Generate Capital, Healthcare of Ontario Pension Plan, and HESTA. pgrenewables.com

• RedBird IMI will formally withdraw its bid for U.K. newspaper publisher Telegraph and Spectator, Axios confirmed. axios.link/4dk01Ja

• Valtech, a London-based portfolio company of BC Partners and Verlinvest, completed its £239m purchase of listed British consultancy Kin + Carta. kinandcarta.com

• Super Hi International (HK: 9658), a Hong Kong-based operator of hot pot restaurants under the Haidilao brand, filed for a $100m float on the Nasdaq (HDL). axios.link/4aTLSAz

• Viking Holdings, a cruise operator backed by TPG, increased its number of IPO shares to 53m from 44m, while keeping the same price range of $21-$25. It would have a $10.2b fully diluted valuation, were it to price in the middle, and plans to list this week on the NYSE (VIK). https://axios.link/3Qn1dSb

• Carlyle is weighing a sale of Tamko Building Products, a Galena, Kan.-based roof shingles maker that could fetch more than $3.5b, per Bloomberg. axios.link/4bezbQJ

• Aon (NYSE: AON) completed its $13.4b purchase of New York-based insurance broker NFP from Madison Dearborn Partners and HPS Investment Partners. axios.link/3tpgXM8

• General Mills (NYSE: GIS) hired JPMorgan to find a buyer for its North American yogurt unit, including the Yoplait brand, per Reuters. A deal could be worth more than $2b. axios.link/44qHZ3S

⚡ Hess (NYS: HES) set May 28 for a shareholder vote on its $53b takeover by Chevron (NYSE: CVX).

• India's National Stock Exchangeagreed to sell its digital tech services unit to Investcorp for $120m. axios.link/3UEjxHR

• Lawrence Stroll is seeking to sell another minority stake in his Aston Martin Formula One team, at a higher valuation than the £1b he got last year from Arctos Partners, per Bloomberg.

🚑 ONO Pharmaceutical (Tokyo: 4528) agreed to buy Waltham, Mass.-based cancer drugmaker Deciphera Pharmaceuticals (Nasdaq: DCPH) for $2.4b in cash, or $25.60 per share (75% premium to Friday's closing price). axios.link/3UzXpzg

• UMB Financial (Nasdaq: UMBF) of Kansas City is in talks to buy Denver's Heartland Financial USA (Nasdaq: HTLF), per Bloomberg. axios.link/3UBJecZ

⚡ WEC Energy Group (NYSE: WEC) agreed to buy a 90% stake in a 300-megawatt solar project near Dallas for $459m. axios.link/3UlZ9e3

• General Catalyst is nearing a $6b close on its latest VC funds, per the FT. axios.link/3wewIqA

• Platform Fund, a VC effort co-led by Christopher Golda (Rogue Capital, BackType) and Nemanja Kostic (BBQ Capital, Catapult), is raising up to $500m for its debut fund, per an SEC filing.

🚑 Amanda DiTrolio and Jessica Radford joined Flare Capital Partners as director of marketing/platform and director of IR, respectively. DiTrolio previously was with Health Tech Nerds, while Radford was at OpenStore. axios.link/49WYwNV

• Heartwood Partners promoted Demetrios Dounis, James Sidwa, and Ed Tanto managing partners. heartwoodpartners.com