Hey! Thanks for being here for Edition #7. You're one of 180+ subscribers, and I genuinely appreciate every single one of you.
Earlier this week I wrote about my dad - a man who left school early, went bankrupt the year I was born, and built it all back into an 8-figure catering business in Australia with no degree and no safety net. Watching him showed me resilience before I had a word for it.
My mum taught me something different. At 18 she told me to do what I love and the money would come. I ignored her for 10 years and built a marketing agency instead, because it paid well. It did. I hated it. Then I shut it down, started from nothing, and stumbled into something I actually love. She was right.
Welcome to the Capital Arbitrage Newsletter.
Let's get into it.
HSBC - Europe's biggest bank by assets - has told some clients in the last few weeks it won't renew certain loans or "back leverage," the financing banks provide to private credit funds so those funds can lend bigger amounts themselves. It's not a full exit - HSBC says it'll still support its most important clients and is keeping a broader private markets business running - but it's a clear pullback from the riskiest end of a $3.5 trillion market.
The trigger is a string of blowups: Tricolor Holdings and First Brands Group both collapsed in late 2025 with double-pledged collateral, and UK short-term property lender Market Financial Solutions went into administration in February 2026 with a loan book shortfall of up to £1.3 billion - largely because it had pledged the same real estate as collateral on more than one loan at a time. HSBC took a $400M charge tied to that collapse (through an indirect lending chain via Apollo-owned Atlas SP Partners), and Barclays booked a related £228M charge.
The practical effect: it's getting more expensive for private credit funds to borrow against their own loan books, due diligence is taking longer, and deployment is likely to slow - especially for smaller managers who relied on cheap bank leverage to compete.
Watch the breakdown: HSBC Pulls Back From The Private Credit Market
Also this week:
Brookfield launched a $100B AI infrastructure fund, anchored by NVIDIA (technology and chip access) and the Kuwait Investment Authority (anchor capital) - $10B equity target, $5B already committed. Brookfield already owns $100B+ in AI infrastructure and is targeting contracted, long-duration cash flows rather than venture-style technology risk. Its estimate for the total AI infrastructure opportunity: $7 trillion over the next decade, split roughly $2T factories, $4T compute, $0.5T power and transmission.
Blackstone, Brookfield, and KKR took a combined 49% stake in Kuwait's crude oil pipeline network - 13 pipelines, 320km - for $16B, with $7.85B paid upfront. Kuwait keeps 51% and full operational control; the proceeds fund its push toward 4 million barrels/day by 2035. Same playbook Saudi Aramco and ADNOC have already run: monetise the infrastructure, keep control, redeploy the capital. Notable that all three firms committed anyway amid reported regional tensions, including Iranian attacks on Kuwait.
What's crossing my desk and my conversations this week:
The private credit lender list is live. Top 35 Data Centre Lenders & Finance Specialists - 12 months of conversations with active lenders, from $840B AUM institutions to the specialist equipment financiers and private credit platforms that never show up in a normal search. Every profile covers active mandates, ticket sizes, deal structures, and the actual person to call - not just a name on a website. If you're trying to work out who to approach for a data centre or digital infrastructure raise, check it out.
The director of Vietnam's national innovation centre introduced me to something I didn't expect: six active, government-linked investment funds deploying nationally, currently prioritising fintech and IT, with AI, healthcare, real assets, and blockchain/RWA tokenisation in scope. The tax incentives back it up - a 5-year corporate income tax exemption for startups, capital gains relief, and a 150% R&D deduction for investors.
A PE firm buying data centres told me they barely underwrite the building at all. What they actually care about: power already secured with room to grow, sites on a clear path to more power, wiring and cooling built for denser loads, and fast connectivity. "When there's a clear path to power, and a clear path to upgrade it." Same theme running through Brookfield's fund above - power, not capital, is the bottleneck right now.
Two deals I underwrote this week:
A $35M build-to-rent duplex community in Florence, South Carolina. 184 units (92 Class A duplexes) shipped pre-built and assembled on-site, targeting $1,625 rent on 900 sq ft units. Senior debt of $31.3M at 87.5% LTC, raising $4.25M in LP equity with the GP co-investing $224K. Entitlements are approved and civil drawings done, targeting a 27.8% IRR and 3.33x equity multiple over a 5-year hold. The local case is real - the city says it's short roughly 3,500 rental units, two nearby BTR comps run 95%+ occupancy, and a $1.6B battery plant is adding local jobs. The risk sits in execution: one overseas factory needs to deliver 8 modules a month, and there's no finished comparable project yet to point to. My verdict: weak fit for private credit and institutions, strong fit for family offices.
A $52M refinance of two operating hydro plants in Brazil. Zero construction risk here - both plants are built, running, and selling power under 20-year contracts already in place, with $30.9M in projected 5-year EBITDA and a 29% loan-to-value. The owner wants to swap expensive Brazilian bank debt for cheaper, longer-term capital. Downside protection includes the plants themselves, assigned contracted revenue, and pledged shares - though the $180M valuation is unconfirmed and there's no disclosed FX hedge, which matters given revenue is 100% reais against dollar-denominated debt over a 20-year term. My verdict: strong fit for private credit and family offices, medium fit for institutions.
I spent 12 months talking to 35+ data centre lenders, trying to work out what actually gets a deal funded versus what stalls at term sheet. Every sponsor thinks their site is unique. Most lenders disagree until five specific boxes are ticked:
Power secured - not "in progress"
100MW+, ideally scalable
Fibre and water confirmed on paper
Offtakers, LOIs, or signed tenants in hand
A shovel-ready timeline under 18 months
A sponsor who's built before, not just bought land
One lender summed it up better than I could: "We don't fund land. We fund certainty." That's the actual gap in this market - it was never about capital availability; it's about sites that can prove all five before the first call even happens.
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.