If looser regulations are what led Swedish buy-now-pay-later firm Klarna to choose the US over the UK to host its IPO, its decision is looking even smarter today.

Klarna, like the rest of the BNPL industry, has been bedeviled by regulators on both sides of the Atlantic. But on Wednesday, the day the BNPL giant filed paperwork with the US Securities and Exchange Commission to go public, news broke that incoming President Donald Trump has wrangled Elon Musk and Vivek Ramaswamy to set up a new “Department of Government Efficiency,” which Musk has promised would feature a “bonfire of nonsense regulations.”

Buy Now, Regulate Later

Klarna is slightly late to the party in the USA, where rivals like Affirm and Sezzle are already publicly traded companies. Both companies’ share prices have been beneficiaries of the Trump trade, buoyed by promises of relaxed regulatory scrutiny. Questions have been mounting about whether BNPL companies in both the US and the UK should be bound by the same laws that restrict how banks and other financial services companies loan money to consumers. In the UK, the government is planning to place BNPL companies under its financial services regulator.

In the US, the go-to BNPL hawk has been Rohit Chopra, head of the Consumer Financial Protection Bureau, but Chopra’s future, and that of the agency he runs, is now looking extremely fragile:

• A 2020 Supreme Court ruling means that the president can remove the head of the CFPB at will. Trump is widely expected to fire Chopra as soon as he can, Bloomberg reported, unless Chopra steps down first.
• In Trump’s first term, he installed an interim CFPB director, Mick Mulvaney, who openly despised the agency and cut back both its budget and enforcement.

In other words: It’s a fairly good bet that the CFPB’s in the gutting line.

To the Moon: Musk and Ramaswamy’s department has been meme-ifically named the DOGE, a nod to a cryptocurrency called dogecoin for which Musk is prone to public displays of affection. But the whole “Elon Goes to Washington” thing is starting to make Wall Street sweat just a bit. Bloomberg reported that even Tesla bulls are finding it hard to believe the scale of Tesla’s stock rally post-election. “There has been a renewed memefication of Tesla stock playing into the political momentum, and it makes no sense,” David Wagner, portfolio manager at Aptus Capital Advisors, told Bloomberg.

As per usual, Berlin is a city divided. East versus West. Collectivism versus individualism. Hard-style techno versus groovy, melodic house. And now: the private equity haves versus the private equity have-nots.

This week, PE movers and shakers are gathering in the historic German capital for their annual SuperReturn conference at a time when the once-thriving industry is suddenly and decisively splintering between winners and losers. Among the big winners? Thoma Bravo. According to a report in The Wall Street Journal on Tuesday, the software-focused private equity giant bucked an industry slump to close three separate funds totaling a massive $34.4 billion.

Bravo, Thoma Bravo

Private equity is trapped in stasis. Buyout firms are still sitting on some $1.2 trillion of dry powder waiting to be deployed, about a quarter of which has been available for at least four years, according to Bain & Co.’s mid-year industry outlook. PE now also controls a record 29,000 companies worth some $3.6 trillion, as of Bain’s first-quarter industry report in March; half of those have been owned for five years or more. And that’s part of the problem: Ownership of said companies dates back to the era of lower interest rates and higher valuations, making them harder to move today, as both global M&A and IPO markets have ground to a halt. Translation: PE’s exit ramps are quickly closing.

With fewer and fewer exits, investors are seeing fewer and fewer returns. Which means PE is having a harder and harder time finding backers for new funding rounds — especially with the rise of private credit and other alternative investment vehicles competing for the same cash. All of which is why Thoma Bravo’s big raise makes it such an industry standout:

• Global PE fundraising has declined for five straight quarters, according to Bain, though the firm says there is a chance the trend could be narrowly reversed in Q2. The first three months of 2025 also marked the first quarter in a decade in which no PE firm closed a fund worth at least $5 billion. According to Pitchbook data seen by Bloomberg, global PE fundraising in Q1 reached just $116 billion, down about 33% year-over-year.
• Thoma Bravo’s massive raise spans three different funds. The biggest, a $24.3 billion raise for its main buyout fund, matches its raise from 2022 and bests the $21 billion fund closed by Blackstone in March as well as EQT’s $23.7 billion raise two Februarys ago to be the largest since the start of 2024.

Return Policy: So, just how dismal have PE returns been? According to Bain, contributions from investors have equaled or outweighed fund distributions in five of the past six years. Even more alarming for the industry, according to a recent McKinsey report: Private equity overall has underperformed the S&P 500 over the past year, the past three years, and the past five years — marking a major reversal of the sector through the century so far.

If we had to guess, this year has been pretty rough for your investment portfolio. Unless you were way, way, way overweight on one of Uncle Sam’s new favorite companies.

So far this year, artificial intelligence-powered data analytics firm Palantir has proven the best of the so-called “Trump Trade” companies. Its share price has soared some 77% year-to-date, on the backs of key federal government contracts, to hit a record valuation on Monday of around $314 billion. So, just how high can Palantir fly?

Move Aside, Musk

Following the November election, Wall Street traders poured into a basket of Trump Trade companies — a.k.a. those that seemed likely to benefit from new White House policies (and, to put it frankly, personal and personnel connections). Those include Trump Media, bitcoin and crypto-related stocks; Tesla, of course; and Palantir — co-founded by Peter Thiel, a prominent Trump backer and former employer-slash-mentor of the vice president.

While political ties (among other problems) ultimately dragged Tesla through the mud, Palantir has continued its ascent; its share price has climbed roughly 675% since the start of 2024. That’s because the tech firm — which specializes in using AI to sort through, detect patterns in, organize, and visualize data — has become a favorite of the federal government, especially in the defense sector:

• The US government remains Palantir’s single-largest client. In its first-quarter earnings report, the company said that “US government revenue” accounted for $375 million of its total $884 million in sales; those figures mark 45% and 39% year-over-year jumps, respectively.
• Last week, The New York Times reported that one of Palantir’s signature products, a platform called Foundry, is being used in at least four government agencies, including the Department of Homeland Security and the Health and Human Services Department; the company is also in talks for a permanent contract to provide the platform to the Internal Revenue Service.

“The relationships that Palantir’s founders … have with senior members of the Trump administration are helpful for business,” D.A. Davidson analyst Gil Luria recently told Reuters.

The Sky(net) is the Limit: That’s just for starters. Two weeks ago, the Pentagon announced the addition of nearly $800 million to an already $480 million contract for Palantir’s AI-driven military targeting software, called the Maven Smart System. The company also looks poised to score contracts to help build the administration’s planned nationwide “Golden Dome” missile defense system, which some experts say could cost upwards of hundreds of billions of dollars. In March, the White House issued an executive order to eliminate “information silos” and promote data-sharing across government departments — a process the NYT reports Palantir has been intimately involved with.