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Here’s what you need to know today

• Microsoft’s on-premises SharePoint server software was reportedly compromised, with the hack affecting about 100 different organisations including the US and German government, universities, telecommunications companies and energy companies. Microsoft reports it has patched the vulnerability that led to the attack. (Reuters)
  
  

• Australia’s share market was flat with mixed fortunes for our two largest sectors. The Big 4 Banks all fell, with Commonwealth Bank leading the way, down 3%. Meanwhile, the major miners all gained, with Rio Tinto up 3% and Fortescue and BHP up 2%, as China’s mega-dam project pushed iron ore prices higher. (Capital Brief)
  
  

• Earnings season continues in the US. So far about 12% of the S&P 500 companies have reported with 83% beating both revenue and profit expectations - well above historical averages. Year-on-year, the companies that have reported so far have reported an average of 6% revenue growth and 9% profit growth. (CNBC)
  
  

• Trump Media & Technology Group, the company behind Truth Social, reported a $2 billion stake in Bitcoin as part of its new Bitcoin treasury strategy. TMTG is the latest company to follow Michael Saylor’s Strategy, which now owns more than 3% of all Bitcoin ever minted. (Bloomberg)
  
  

• US Treasury Secretary Scott Bessent called for an inquiry into “the entire Federal Reserve institution” while Republican Congresswoman Anna Paulina Luna referred Jerome Powell, the Chair of the Federal Reserve, to the Department of Justice for criminal prosecution for allegedly lying under oath. The attacks on the Fed come as Powell refuses to cut interest rates as President Trump wants. (Financial Times)
  
  

• Israel rejected a statement from 25 countries, including Australia, Britain, France, Canada and Japan, that called for an immediate ceasefire in Gaza and criticised the Israeli government’s system of delivering aid. The statement specifically called out the recent “horrifying” deaths of more than 800 Palestinians who were seeking aid. (AFR)
  
  

• Ukrainian drone attacks continue disrupting Moscow’s main airports. Russia announced it had shot down 117 drones overnight. Meanwhile Russian missile strikes on Ukraine killed 2 people and wounded 15 more. (CNN)

What the…?

Nick Adams, the former Deputy Mayor of Ashfield, in Sydney’s inner west, has found himself a surprising new job - the US Ambassador to Malaysia.

Adams landed on President Trump’s radar as a big Twitter(X) user, describing himself as an “Alpha Male”. Trump first tweeted approvingly of Adams’ books in 2017. Now, just 8 years later, Adams will be America’s diplomatic representative to Malaysia.

And who better to represent America’s interests than the man that grew up in Sydney, studying at Trinity Grammar and Sydney University, and only became an American citizen in 2021. (AFR)

Investing is a lifelong journey

Here’s what you can learn today.

Why has private equity outperformed public markets?

This is an excerpt from our interview with Cameron Blanks, Managing Director of Pacific Equity Partners, on Equity Mates Investing (Apple | Spotify | YouTube)

Question: Private equity outperformance. Let's start with the numbers. How has it outperformed public markets?

Cameron: Over a very long period of time, it's outperformed somewhere between five and 10% on average. Obviously there's some sectors within the industry that have even done better than that, but just as a general rule, public equities over the long term have delivered something like 7 to 8% returns to invest. Volatility is in those numbers and private equity is typically about 5 to 10% above that and with less volatility as well.

In the area we focus most on - late stage buyouts - there are three different things that differentiate and enable that outperformance.

1. Alignment. So this is getting alignment all the way from shareholders, through the board and into the management teams around incentives and strategy and execution.

2. It’s really about active management. And what that means is spending time with the management teams as a private equity firm to make sure that they're executing the strategy and then helping them to execute that strategy. So that may be some analysis that helps with M&A or bringing in other specialists for other areas of the business.

3. We can take a long-term approach in private equity. We'd like to sell our businesses after three to five years, but if we need to, we can hold on for longer than that depending on market conditions or where we are on the business execution. So we have that flexibility, that long-term flexibility that doesn't really exist in the public markets. There's always a six month or quarterly reporting that needs to be done and it drives short-termism.

So we'd put those three aspects down as the reason why particularly late stage buyout outperforms the public markets by a considerable margin.

Prefer to watch this conversation? Every Equity Mates episode is posted in-full on the Equity Mates YouTube. Check it out:

A message from Scouting Australia Podcast 

Mythbusting #4: Rent Money is Dead Money

Join Sam Gordon, Equity Mates’ regular property expert, and the APS Team as they unpack the age-old debate — is rent really dead money?

It's a phrase we hear all the time. Often by parents urging their kids to buy a home instead of rent, but the team instead discuss exploring more investing strategies. In today’s ever-evolving property market, does this traditional mindset still hold up?

Want more Equity Mates?