Hey! Thanks for being here for Edition #12. You're one of 230+ subscribers, and I genuinely appreciate every single one of you.
I'm writing this from the Philippines. I'm here for two weeks visiting my partner's family, which means the days are slower than usual and the coffee is better than usual.
It's a good reminder that this business runs fine from anywhere as long as the reading and the conversations keep happening. So the newsletter is a bit lighter this week - no video, and a shorter run of stories - but the two that made it in are worth your time.
Let's get into it.
The Bathla Group went into administration last week owing around A$3.2 billion, and almost all of it came from private credit funds. Roughly 40 funds had exposure, with individual loans ranging from A$1.5M to A$340M. PAG Asia Capital was the largest lender at A$730M, with CVS Lane Capital Partners reportedly second at A$250M. The group had around 220 projects, 45 of them in active construction. The story itself is ordinary - Bathla grew fast on borrowed money, sales slowed, build costs rose, lenders lost confidence. What matters is what happened next.
Once Bathla went under, investors in those funds wanted out. Within days, three managers had restricted access to their money: Centuria Bass Credit paused withdrawals, MA Financial Group capped a A$2.3B fund, and CVS Lane suspended both applications and redemptions. 360 Capital went into a trading halt. ASIC has called this the first significant cracks in Australian private credit, and pointed out the part most people miss - private credit sits at roughly A$200 billion in Australia, and most Australians hold some of it through their super without ever choosing to. This is the same pattern I covered when HSBC pulled back from back-leverage lending: the loss doesn't stay with the borrower, it travels up through the fund structure to whoever gave the fund its money. Do you know what your super is lending to?
Also this week:
StepStone Group closed its first infrastructure secondaries fund in August, raising $1.7 billion across the vehicle and related separate accounts. The fund buys LP interests in existing infrastructure funds and commits into GP-led continuation vehicles - renewables, telecom, power, utilities and transport, North America heavy with UK, EU and Australian exposure. The part worth noticing is the timing: they'd already closed 26 deals and deployed roughly half the money before the fund itself closed. Most debut funds wait until the dry powder is actually in hand. StepStone deploys around $13B a year across primaries, secondaries and co-investments, and uses that flow to see deals before they hit the open market. Infrastructure assets tend to outlive the funds that own them, and that mismatch is exactly why secondaries stopped being a niche exit ramp and became a market of its own.
What's crossing my desk and my conversations this week:
43 family offices in 12 months, and not one came through a warm intro. I found every name on LinkedIn. The hard part was never finding them - it was working out how to reach the right person and actually get a reply. Most people assume this market runs on introductions. In my experience, it runs on being specific enough that someone decides you're worth ten minutes.
I've written the whole process up and made it free. It's a Notion playbook covering the prompt I use to build the list, my six-email sequence, nine cold call openers, and 23 objection replies. If you're raising and you don't have a warm network to lean on, this is the exact workflow. Grab it here: https://lnkd.in/gKSqKXny
A $10M office-to-residential conversion in Colorado.
The sponsor bought at $66/SF - about a third of replacement cost, which sits at $120-150/SF. The plan is 48 units, underwritten at 50% long-term rental at $1,500-$1,700 a month, targeting a $14.8M stabilised value. That's roughly $5.4M of equity created on day one, before a single tenant moves in.
On stage of risk, this is further along than most things I see at this size. Capital is locked, debt is pre-approved, demolition is already underway, and construction starts immediately once permits land in Q4 2026. The sponsor has over $1M committed, holds 50%+ of the equity, and has given a personal guarantee.
Location is doing real work here. There are zero competing studios in the submarket, with Colorado Academy, Swedish Medical and CU Denver all in reach. Red Rocks is 7.5 miles out and Front Range skiing is a 30-minute drive, which supports the short-term rental half of the model, while the US-285 commuter base stabilises long-term rental demand. The dual LTR/STR structure is what lets the deal capture professional tenants and tourism demand at the same time, and it's also positioned for medical tourism.
Downside protection comes from the basis more than anything else - at $66/SF there's a lot of room before this gets uncomfortable. On top of that: sponsor majority equity plus the PG, a $500K contingency reserve above all project costs, and a conservative 4.75-5% exit cap assumption. On the exit, construction and stabilisation are in-house, investors get board seats and a veto on any CapEx variance above 15%, and the hold window is 48-60 months with the flexibility to refinance or sell.
My only real concern is supply. Denver has absorbed a lot of multifamily. If supply catches up faster than demand, rents soften and the value creation stalls.
A domain costs about $12 a year and takes ten minutes to set up.
So when someone messages me about their access to family offices and private lenders, and I look at their profile and see 20+ years in the game and deep relationships - and then they send everything from a Gmail address - I start asking questions.
Is this a business or a side hustle? What else are they cutting corners on? Are they sending the same email to the family office? How many deals have they actually closed?
On its own, Gmail means nothing. Plenty of good operators run lean, and some principals genuinely do email from personal accounts. What bothers me is the combination: big claims about access, no specifics, no domain, and they want a call before they'll tell you anything.
Here's why I'm strict about it. I don't care who you say you know - I care whether you're real. If I introduce you to someone in my network, that's my name on it. There are too many shady people in this business for me to take that on trust, so I have to check you first. A business email is the easiest place to start.
If you're on the other side of this and you're raising: the cheap signals are the ones people actually read. Fix those before you spend money on anything else.
A snapshot of what's currently moving through Capital Arbitrage:
Note: For the best reading experience, open this on a desktop.
Deal | Asset Type | Geography | Structure | Size |
|---|---|---|---|---|
Miami Luxury Residential | Greenfield | USA | Equity | $40M |
South Carolina Multifamily | Greenfield | USA | Debt/Equity | $93M |
London Tunnels | Tourism | UK | Debt/Equity | £700M |
Pharmaceutical Cannabis | Life Sciences | UK | Debt | £20M+ |
This isn't the full pipeline - just a flavour of what's active. If you're an investor or lender active in any of these asset classes or geographies, reply to this email.
That's all for this week. See you next Friday.
— Jordon
P.S. I get 500,000+ monthly impressions on LinkedIn and a growing list of private capital readers right here. If you'd like to get your company, fund, or raise in front of this audience, just reply to this email.