⚖️ Situational awareness: The Justice Department officially asked a judge to break up Google, namely by divesting its Chrome browser, as we discussed earlier this week.

When interest rates began rising in early 2022, private equity investors talked a lot about how they were going to hunker down and focus on portfolio company fundamentals.

• It appears they walked the walk, according to a new study from investment bank Lincoln International and University of Chicago professor Steve Kaplan.

Why it matters: Private equity could be well positioned to harvest returns in 2025, rather than needing to first dig itself out of a hole. Thus lending more credence to the animal spirits.

Catch up quick: Lincoln and Kaplan several years ago began studying fair values of U.S. private equity portfolio companies, creating a quarterly index.

• The most recent sample includes 5,750 companies backed by more than 175 financial sponsors.

By the numbers: The cohort saw 2.2% enterprise value growth in Q2, driven more by fundamentals than multiple expansion, with the index hitting a new high.

• Most importantly, this is in line with all other quarters since early 2022.
• Energy companies experienced the biggest boost at 6.5%, although health care takes the year-to-date and LTM prize at 7% and 7.1%, respectively.
• In general, larger companies outperformed smaller ones.

Zoom out: One dark mark in the data is that the S&P 500 eclipsed the index's enterprise value growth for the first time in nearly three years.

• The bear argument is that private equity should be crushing a passive stock index, given its high fees and illiquidity.
• The bull argument is that private equity has provided investors with much less volatility, and that leverage can enable returns above and beyond enterprise values. Plus, the private market index easily topped the S&P 500 once the Magnificent Seven were excluded.

The bottom line: Private equity needs distributions like the Northeast needs rain. It did its job through the drought, and the only question now is if it will finish seeding the clouds.

Tokamak Energy, a British fusion energy developer, raised $125 million co-led by East X Ventures and Lingotto Investment Management.

Why it's the BFD: The AI revolution needs more power, and one of its second-order impacts is driving venture investment into nuclear fusion, which remains the holy grail for energy.

• Tokamak was spun out of the U.K. Atomic Energy Authority in 2009, and is developing an egg-shaped reactor rather than the doughnut shape being pursued by many others.

Other investors include Furukawa Electric, BW Group, Sabanci Climate Ventures, and British Patient Capital.

The bottom line: Tokamak believes its pilot power plant is still a decade away, and says it will generate interim revenue by launching a division focused on high-temp, superconducting magnets. Some other nuclear fusion startups are filling the commercial void by producing medical radioisotopes and other cancer treatments.

• Odoo, a Belgian provider of SME productivity software, secured a €500m secondary investment at a €5b valuation from firms like CapitalG and Sequoia Capital. axios.link/3ZekPwl

• Lighthouse, a London-based commercial intelligence platform hoteliers, raised $370 million in Series C funding from KKR at a valuation north of $1 billion. axios.link/4eHNLSf

• League One Volleyball, a youth volleyball brand that's launching a pro league, raised $100m led by Atwater Capital, with insiders Ares Management and Left Lane Capital participating.

• Nivoda, a London-based online jewelry marketplace, raised $51m, per Axios Pro. Northzone led, and was joined by Avenir Growth, Headline, Abstract Ventures, and Canaan Partners. axios.link/3Zhnohm

• Lightning AI, a New York-based provider of AI dev tools, raised $50m from Cisco Investments, JPMorgan, K5 Global, and Nvidia. lightning.ai

• Federato, an SF-based insurance underwriting platform, raised $40m in Series C funding. StepStone Group led, and was joined by Emergence Capital, Caffeinated Capital, and Pear VC. axios.link/3Oiiri1