Private Markets Sector
Private markets saw a major consolidation as T. Rowe Price acquired F/m Investments to expand its fixed income ETF business, while regulatory scrutiny intensified across multiple fronts—the SEC subpoenaed banks over Situational Awareness's AI hedge fund collapse, TWG Global brought in Goldman's top lawyer amid a $20 billion affiliate loan probe, and Colorado enacted new AI lending disclosure rules. Consumer finance also faced pressure as Unlock settled with Minnesota over predatory home equity agreements, though Circle received a bullish analyst call on its stablecoin momentum.
T. Rowe Price agreed to acquire F/m Investments, a $19 billion fixed income asset manager, in a deal expected to close in early 2027. F/m, founded in 2019 and headquartered in Washington, D.C., operates 20 ETFs spanning Treasuries, TIPS, corporate bonds, and municipal securities, plus separately managed accounts and customized liquidity solutions. The purchase will increase T. Rowe Price's fixed income assets under management by nearly 9% and more than double its fixed income ETF assets under management. T. Rowe Price currently manages $33 billion across 34 ETFs; F/m's suite adds 20 funds, with its flagship U.S. Treasury 3-Month Bill ETF (TBIL) holding $7.2 billion in net assets—nearly 70% of F/m's total ETF assets of $10.2 billion. F/m will retain its brand, leadership, and operating model as "F/m Investments, a T. Rowe Price Company," with CEO Alexander Morris reporting to Arif Husain, T. Rowe Price's head of global fixed income. The company said the acquisition reflects disciplined expansion into areas with "durable client demand" and will extend F/m's ETF capabilities—including its first dual-share class ETF and pending SEC application for tokenized ETF shares—across T. Rowe Price's intermediary, institutional, retirement, and wealth platforms. Financial terms were not disclosed. Dechert LLP served as legal counsel to T. Rowe Price; Oppenheimer & Co. acted as exclusive financial advisor to F/m Investments, with Fried, Frank, Harris, Shriver & Jacobson LLP as F/m's legal counsel.
The Securities and Exchange Commission is subpoenaing banks that worked with Situational Awareness, the AI-focused hedge fund led by OpenAI alum Leopold Aschenbrenner, according to TechCrunch. The subpoenas target banks that supervised the fund's trading and channeled funding to it. The SEC has instructed the banks to preserve information related to the hedge fund, though it has not accused Situational Awareness of wrongdoing. The probe arrives after a July downturn in AI stocks erased billions of dollars in value at the firm, which had bet heavily on AI investments and enjoyed rapid growth before the losses. Situational Awareness told the Times it would cooperate fully with regulators and characterized the scrutiny as routine for high-profile funds. The timing underscores the volatility of concentrated AI bets and the speed at which Wall Street enthusiasm can reverse.
The SEC has subpoenaed major Wall Street banks over trading activity at Situational Awareness, the hedge fund that liquidated positions last month after margin calls during a sharp decline in AI stocks, according to fortune.com. The regulator is seeking information on how the fund's positions unwound and which banks facilitated the trades. Situational Awareness faced a cascade of margin calls as its concentrated AI bets lost value; Ken Griffin's Citadel acquired the bulk of its public equity holdings during the fire sale. An SEC inquiry does not mean a firm is under investigation or that enforcement will follow. Situational Awareness said in a statement it is "a highly-regulated business" and will cooperate fully with the SEC's request. The subpoenas are a routine regulatory response to a high-profile fund's dramatic drawdown and forced liquidation.