When interest rates began rising in early 2022, private equity investors talked a lot about how they were going to hunker down and focus on portfolio company fundamentals.

• It appears they walked the walk, according to a new study from investment bank Lincoln International and University of Chicago professor Steve Kaplan.

Why it matters: Private equity could be well positioned to harvest returns in 2025, rather than needing to first dig itself out of a hole. Thus lending more credence to the animal spirits.

Catch up quick: Lincoln and Kaplan several years ago began studying fair values of U.S. private equity portfolio companies, creating a quarterly index.

• The most recent sample includes 5,750 companies backed by more than 175 financial sponsors.

By the numbers: The cohort saw 2.2% enterprise value growth in Q2, driven more by fundamentals than multiple expansion, with the index hitting a new high.

• Most importantly, this is in line with all other quarters since early 2022.
• Energy companies experienced the biggest boost at 6.5%, although health care takes the year-to-date and LTM prize at 7% and 7.1%, respectively.
• In general, larger companies outperformed smaller ones.

Zoom out: One dark mark in the data is that the S&P 500 eclipsed the index's enterprise value growth for the first time in nearly three years.

• The bear argument is that private equity should be crushing a passive stock index, given its high fees and illiquidity.
• The bull argument is that private equity has provided investors with much less volatility, and that leverage can enable returns above and beyond enterprise values. Plus, the private market index easily topped the S&P 500 once the Magnificent Seven were excluded.

The bottom line: Private equity needs distributions like the Northeast needs rain. It did its job through the drought, and the only question now is if it will finish seeding the clouds.

Tokamak Energy, a British fusion energy developer, raised $125 million co-led by East X Ventures and Lingotto Investment Management.

Why it's the BFD: The AI revolution needs more power, and one of its second-order impacts is driving venture investment into nuclear fusion, which remains the holy grail for energy.

• Tokamak was spun out of the U.K. Atomic Energy Authority in 2009, and is developing an egg-shaped reactor rather than the doughnut shape being pursued by many others.

Other investors include Furukawa Electric, BW Group, Sabanci Climate Ventures, and British Patient Capital.

The bottom line: Tokamak believes its pilot power plant is still a decade away, and says it will generate interim revenue by launching a division focused on high-temp, superconducting magnets. Some other nuclear fusion startups are filling the commercial void by producing medical radioisotopes and other cancer treatments.

• Odoo, a Belgian provider of SME productivity software, secured a €500m secondary investment at a €5b valuation from firms like CapitalG and Sequoia Capital. axios.link/3ZekPwl

• Lighthouse, a London-based commercial intelligence platform hoteliers, raised $370 million in Series C funding from KKR at a valuation north of $1 billion. axios.link/4eHNLSf

• League One Volleyball, a youth volleyball brand that's launching a pro league, raised $100m led by Atwater Capital, with insiders Ares Management and Left Lane Capital participating.

• Nivoda, a London-based online jewelry marketplace, raised $51m, per Axios Pro. Northzone led, and was joined by Avenir Growth, Headline, Abstract Ventures, and Canaan Partners. axios.link/3Zhnohm

• Lightning AI, a New York-based provider of AI dev tools, raised $50m from Cisco Investments, JPMorgan, K5 Global, and Nvidia. lightning.ai

• Federato, an SF-based insurance underwriting platform, raised $40m in Series C funding. StepStone Group led, and was joined by Emergence Capital, Caffeinated Capital, and Pear VC. axios.link/3Oiiri1

🚑 TailorMed, an Israeli startup connecting patients with financial aid for medical costs, raised $40m in Series B funding, per Axios Pro. Windham Capital Partners led, and was joined by Citi Impact Fund, Samsung NEXT, BrightEdge, Providence Ventures, OSF Healthcare, Inception Health, Ballad Ventures, UH Ventures, and UnityPoint Health Ventures. axios.link/3AUPghZ

🐵 Monkey Tilt, a Las Vegas-based online gaming platform, raised $30m in Series A funding. Pantera Capital led, and was joined by Polychain Capital, PokerGo, Hack VC, Dream Ventures, Accomplice, Mirana, and Josh Hannah. axios.link/3OkDVea

⚡ Ample, an SF-based EV battery swapping startup, raised $25m from Mitsubishi. axios.link/3CFwdsv

🌏 EarthOptics, an Arlington, Va., developer of soil data software for agriculture, raised $24m co-led by Conti Ventures and The Production Board. axios.link/40W2KV5

🚑 New Lantern, an AI radiology startup, raised $19m in Series A funding led by Benchmark. newlantern.ai

• Prompt Security, a cybersecurity startup focused on genAI, raised $18m in Series A funding. Jump Capital led, and was joined by Hetz Ventures, Ridge Ventures, Okta, and F5. axios.link/3CzPqeZ

• Wyden, a digital asset trading infrastructure company, raised $16.9m in Series B funding. Truffle Capital led, and was joined by PostFinance and SBI-Sygnum-Azimut Digital Asset Opportunity Fund. axios.link/3CDJEJo

🚑 OneCell Diagnostics, a Cupertino, Calif., precision oncology startup, raised $16m in Series A funding. Celesta Capital led, and was joined by Tenacity Ventures, Cedars Sinai, Eragon, and Singularity Ventures. onecelldx.com

• Faircraft, a French developer of lab-grown leather, raised €15m from Kindred Ventures, Cap Horn, Entrepreneur First, Alliance for Impact, BPI, and Heirloom. faircraft.bio

• Aira Technologies, a Saratoga, Calif., cellular network infrastructure startup, raised $14.5m in Series B funding. NeoTribe and Acrew co-led, and were joined by AT&T Ventures, Intel Capital, IQT, Juniper, and JTM. axios.link/3YUDFHL

• Arcade, a visual storytelling platform, raised $14m. Kleiner Perkins led, and was joined by insiders Upfront Ventures and Foundation Capital. arcade.software

🚑 Aizen Therapeutics, a San Diego based developer of a mirror peptide platform, raised $13m in seed funding led by Madrona with participation from Wilson Hill and Cercano. aizentx.com

• Solvento, a Mexico-based payments company focused on trucking, raised $12.5m in Series A funding, per Axios Pro. Cometa led, and was joined by Quona Capital, Ironspring Ventures, Dynamo Ventures, Proeza Ventures, Zenda Capital, and Endeavor Fwd Fund. axios.link/4fBkiur

🌏 Epic Cleantec, a maker of water recycling systems for large buildings, resorts, and campuses, raised $12m in Series B funding, per Axios Pro. The family office of Kathy Fields and Garry Rayant led, and was joined by insiders J-Ventures and Echo River Capital. axios.link/493qV63

• Four Growers, a developer of harvesting robots, raised $9m in Series A funding. Basset Capital led, and was joined by Ospraie Ag Science and YC. axios.link/3Zgoav2

• Distru, an ERP platform for cannabis, raised $6m in Series A funding led by Global Founders Capital. axios.link/3CCKJRQ

🚑 CalmWave, a Seattle developer of patient alarms for ICUs, raised $5.25m. Third Prime led, and was joined by Catalyst by Wellstar, SilverCircle, Rebellion, Impulsum, Bonfire Ventures, Tau Ventures, and Hike Ventures. calmwave.ai

🌏 BiocSol, a Belgian developer of microbial pesticides, raised €5.2m in seed funding co-led by Agri Investment Fund and Vivies IUF. axios.link/4eCqiBH  

• EdfaPay, a Saudi payments startup, raised $5m. OmanTel Innovation Labs led, and was joined by Aljabr MENA and Waad Investment. axios.link/4fWW5P2

• Marimo, an open-source Python notebook, raised $5m led by AIX Ventures. marimo.io

• Toku, a Singaporean provider of enterprise cloud and experience solutions, raised $5m in Series A extension funding led by Betatron Venture Group. toku.co

🚑 FertilAI, an Israeli fertility startup, raised $4.5m in seed funding co-led by Longevity Venture Partners and Redseed. axios.link/4eEZ9hD

• Hopae, a South Korean digital identity startup, raised $4.3m in seed funding. SV Investment led, and was joined by Z Venture Capital and Bon Angels Venture Partners. It also secured $2.2m in debt. hopae.com

• Ubitium, developer of a universal RISC-V microprocessor, raised $3.7m in seed funding from Runa Capital, Inflection, and KBC Focus Fund. ubitum.com

• Eden AI, a French AI integration platform, raised €3m led by Galion.exe. axios.link/40X4g9N

⚡ Alchemyca, an SF-based startup using enzymes to convert waste into renewable natural gas, raised $2.5m from venture studio Ferment. ferment.co

🏀 Unrivaled, a new 3-on-3 pro women's basketball league, raised funding from Giannis Antetokounmpo's Build Your Legacy Ventures. axios.link/4hZiDQH

• Cinven agreed to buy a majority stake in accountancy Grant Thornton UK. axios.link/3OnLCjy

🚑 Ersel Asset Management agreed to buy Deenova, an Italian provider of drug and medical device traceability solutions, from H.I.G. Capital. deenova.com

• Kinematics, a Phoenix-based portfolio company of Angeleno Group, agreed to acquire P4Q, a Spanish provider of electronics for applications like solar tracker control and industrial automation. gokinematics.com

• Pinnacle Investment Management of Australia made a minority investment in private equity firm VSS Capital Partners. vss.com

🚑 TigerConnect, a clinical collaboration software company owned by Vista Equity, acquired Twiage, a pre-hospital care coordination company. tigerconnect.com

🚑 Verisma, an Alpharetta, Ga., portfolio company of NewSpring Capital, acquired Olah, a Columbus, Ohio-based hospital patient data management company. verisma.com

⚡ Dynamix Corp, an energy SPAC led by Andrea Bernatova (Goodnight Midstream), raised $150m in its IPO. axios.link/3XY65BE

• FG Merger III, a SPAC targeting the North American financial services sector, withdrew its $150m IPO filing. axios.link/492oxN4

• Groupe Dynamite, a Canadian fast-fashion retailer, raised C$300m in its IPO at a C$2.3b valuation, after pricing in the middle of its range. It will trade in Toronto under ticker "GRGD." axios.link/4g06Xvx

• APi Group (NYSE: APG) bought Endeavor Fire Protection, a Boston-based provider of fire and life safety services, from Building Industry Partners. endeavorfireprotection.com

🚑 EQT, ADIA, and Auba Investment are offering 14.3m shares in Swiss skin care company Galderma (SWX: GALD), which could raise around $1.4b. axios.link/3CAxscq

⚡ PAG agreed to sell a majority stake industrial gas unit of portfolio company AirPower Technologies for $6.8b to a Chinese consortium, while retaining a 25% position plus other AirPower assets. axios.link/4eI05BZ

🏈 Egon Durban, co-CEO of Silver Lake, and Discovery Land Co. founder Michael Meldman each agreed to buy 7.5% stakes in the NFL's Las Vegas Raiders from majority owner Mark Davis, per the NY Times. axios.link/3Zg8UOL

☕ Starbucks (Nasdaq: SBUX) is weighing the sale of a stake in its Chinese unit, per Bloomberg. axios.link/3CN8E0M

• Teton Ridge, a Western sports and entertainment company led by Thomas Tull and Mark Walter, acquired The Cowboy Channel, Cowgirl Channel and The Cowboy Channel+ from Rural Media Group. axios.link/3CFFRLJ   

• Accolade Partners of Washington, D.C., raised $202m for its third blockchain-focused fund-of-funds. accoladepartners.com

🌏 Blue Bear Capital raised $160m for its third early-stage climate fund. axios.link/3Zhnohm

🚑 Frazier Healthcare Partners raised $2.3b for its 11th growth buyout fund. frazierhealthcare.com

🚑 NaviMed Capital, a Washington, D.C.-based PE firm focused on health care, raised $450m for its third fund. navimed.com

⚡ Neos Partners, a San Diego-based PE firm focused on the energy transition and infrastructure sectors, raised $1.37b for its second fund (plus a $350m co-investment fund). neospartners.com

• Dana Goldstein joined Transom Capital Group as head of marketing and IR. She previously was with Anthos Capital. axios.link/40W7vyf

• Vivian Sam is leaving Standard Chartered, where she led leveraged finance, acquisition finance, and private credit for Greater China and North Asia, per Bloomberg. axios.link/3UYnYy3

The EY-Parthenon Deal Barometer, which uses EY's U.S. economic outlook to predict deal trends, is forecasting a solid but not spectacular increase to private equity activity in 2025.