Pari Passu Newsletter

What bucket are you in? If you read Pari Passu, you are automatically in the third one :)

My second year as a Private Equity Associate in Large-Cap Private Equity - A Long Thread We talk about PE all the time, but how does it look like from the inside? Today, I will cover the following topics: 1) Where I was right last year 2) Where I was wrong last year 3) Why Private Equity is such a good model 4) Key Trends I am seeing (Retail, Returns, AI) 5) Is the grind in PE still worth it? 6) Figuring things out, what I am doing next The beautiful thing about being anonymous is that I can be 100% honest. Be aware, this is as real as it gets! Let’s get into it __ If you read the entire piece, I would love to hear your thoughts!

FREE WEBINAR | "Getting Started with Search Funds and ETA (Entrepreneurship through Acquisition)" Tomorrow at 6PM ET This is going to be one of the most interesting events of the month: It will cover: - Search fund models and which fits your situation - Basic search fund economics and deal structures - Practical first steps to launch your search - Core search strategy and planning fundamentals - Q&A ETA is a massive trend (for many great reasons) so I really think this event will benefit a lot of people and I will be attending myself If you would like to register, click below. https://lnkd.in/eVUkMaqg

PREVIEW | Bed Bath & Bankrupt Bed Bath & Beyond was once the ultimate “category killer” in American retail, racking up over $12 billion in annual sales at its peak, blanketing suburban malls with superstores, and filling mailboxes with its iconic 20% off blue coupons. For decades, it seemed untouchable. And yet, by 2023, the company collapsed into Chapter 11, shuttered hundreds of stores, and liquidated its most valuable brands. Our latest deep dive traces the full arc of Bed Bath & Beyond’s rise and fall, how two entrepreneurs with $50,000 each created a retail empire, how strategic acquisitions like buybuy BABY fueled its expansion, and how missteps in e-commerce, inventory, and private-label launches pushed it into crisis. We unpack the crucial turning points: the proxy fight that ousted long-time leadership, the ill-timed $1 billion buyback program, failed debt exchanges, meme-stock volatility, and ultimately the emergency financings that weren’t enough to stave off liquidation. But the story doesn’t end there. We also cover the company’s surprising comeback under new ownership and its latest plans to re-enter physical retail in 2025. Subscribe to read the full analysis, this is more than a retail postmortem, it’s a case study in corporate strategy, capital structure, and the razor-thin line between dominance and distress. Article go behind paywall after publication, subscribe now: https://lnkd.in/eUiB-NaE

PUBLISHED | ABL Deep Dive Asset-based lending (ABL) is one of the most widely used but least understood forms of financing in today’s credit markets. At its best, it gives companies in asset-heavy, margin-volatile industries a flexible source of capital. At its worst, it can accelerate distress and force an early Chapter 11. In this week’s Pari Passu newsletter, we dig deep into how ABL works, why it’s become so popular since the 1980s, and what makes it fundamentally different from traditional cash-flow lending. We break down key terms like advance rates, borrowing bases, and reserves, then walk through a detailed example of how a retailer can unlock liquidity through ABL facilities. But we also highlight the risks. A reserve, imposed at the wrong time, can cut off access to liquidity and trigger a downward spiral. Party City’s recent bankruptcy shows exactly how that played out in the real world—where lenders, acting to protect themselves, ultimately shut off the company’s runway. If you want to understand how ABL shapes restructurings, credit recoveries, and distressed investing opportunities, this is a must-read. Check it out now in the 146th edition of the Pari Passu newsletter. https://lnkd.in/emgnrqHk Thanks to today's sponsor, Cognitive Credit, claim your free credit model now: https://lnkd.in/e-3BcEjB

Some recent thoughts Would love to hear your opinion!

POST PREVIEW | This Friday, we’re breaking down one of the most misunderstood financing tools in restructuring: asset-based lending (ABL). ABL can be a lifeline for retailers, manufacturers, and distributors whose margins swing with the seasons. By lending against receivables and inventory instead of EBITDA, ABL provides liquidity when traditional financing dries up. For some businesses, that flexibility is the difference between survival and collapse. But here’s the catch—ABL lenders protect themselves ruthlessly. Borrowing base reserves, advance rates, and collateral appraisals can flip overnight. In the right hands, ABL fuels growth. In the wrong conditions, it can accelerate distress and shut down a company faster than you think. Case in point: Party City. After its borrowing base was slashed, the company’s liquidity evaporated almost immediately, leading to a rushed Chapter 11 and painful losses for creditors and equity alike. Our Friday write-up goes deep: how ABL works, who benefits, how it can spiral into disaster, and the blow-by-blow of Party City’s downfall. Don’t miss it. Subscribe now to catch the full piece when it drops. https://lnkd.in/eTpr5JCc

Students!! I want to launch a Pari Passu Campus Ambassador program If you are interested and want to register your early interest and suggestions on what to do, fill the firm below. So excited to bring our unique content to every business student Everyone should read and understand restructuring stories https://lnkd.in/ez-V7yVw

Hey guys, have a cool event to share! Exa AI is hosting an interesting "AI in Finance Happy Hour" on Thursday 5:30-7:30pm in Midtown East. For context, Exa (Lightspeed, Nvidia, and YC backed) provides a web search API that lets finance professionals instantly find, enrich, and structure real-time web data. If you work in HF/PE/IB and want to learn more (or just meet other cool folks at the intersection of finance and AI) you should show up! If you are interested, register now: https://lu.ma/6bhdlyrf

In 2008, Yahoo turned down Microsoft’s buyout offer worth $44.6bn Less than fifteen years later, Apollo bought the brand as part of a deal worth $5bn Here is the story of an internet pioneer’s fall from grace and Apollo’s plan to turn it around: 1) Background 2) Apollo’s Acquisition 3) Operational Improvements 4) Expanding Core Businesses 5) Strategic M&A 6) Yahoo Today