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Alkegen, a global specialty materials manufacturer, specializes in highly engineered insulation, filtration, and fire protection products for industrial and advanced manufacturing applications. Recently, PJT Partners' Restructuring & Special Situations Group advised Alkegen's lenders on a restructuring designed to eliminate about $3.1 billion in debt. The transaction also included $315 million in new-money debtor-in-possession (DIP) financing to support operations, with ownership of the reorganized company shifting to institutional investors.⁴

Taking a step back, Alkegen reached the point of necessary restructuring because of excessive leverage, weaker industrial demand, and competitive pressures. The company's growing debt exposure can be traced in part to 2021, when Unifrax acquired Lydall to expand into filtration technologies and advanced materials to fuel further growth.¹ The combined company was renamed Alkegen in January 2022. The acquisition was supported by about $1.2 billion in committed debt financing, along with additional cash and equity commitments from investors.² Alkegen also expanded further in 2022, including acquiring a controlling stake in Luyang, a Chinese specialty materials manufacturer.

These acquisitions increased Alkegen's debt exposure while expanding its presence in new markets. The company relied on future operating improvements to meet its obligations, so weaker performance could become much more concerning. It also increased its exposure to cyclical industrial markets, as both businesses served customers whose spending depended heavily on manufacturing activity. This created a vulnerability, as Alkegen's financial obligations were relatively fixed, but the cash flows supporting them were not.

Unfortunately, industrial demand weakened, with higher interest rates and competitive pressures affecting markets such as steel, construction, and automotive manufacturing. These markets were important to Alkegen, and weaker demand made it increasingly difficult to service its debt. Competition from Chinese manufacturers also pressured pricing, while certain growth initiatives did not develop as quickly as management had anticipated.

This brings us to Alkegen's first major attempt to address its debt problem without entering Chapter 11. In September 2024, the company completed a liability management exercise that refinanced substantial portions of its debt and extended key maturities from 2025 to 2029. The transaction also reorganized creditor priorities, including a new first-out revolving credit facility, while providing additional liquidity.³ It allowed certain interest payments to be made through payment-in-kind (PIK) interest, adding unpaid interest to outstanding principal rather than requiring an immediate cash payment. This helped preserve liquidity while management worked to improve operating performance.

On paper, Alkegen was in a better position if all went well. The company had more time before its debt matured, additional liquidity, and an opportunity to improve its operations. However, this attempt did not meaningfully reduce its overall debt burden. Alkegen had addressed an immediate liquidity and maturity problem, but its longer-term financial position still depended on operating improvements that had yet to materialize.

By early 2026, the limitations of the earlier refinancing were becoming increasingly clear. Operating performance remained under pressure, the company continued to carry a substantial debt burden, and its ability to defer certain interest payments was approaching expiration in September. Without improving cash flow or meaningfully reducing debt, Alkegen faced increasingly difficult financial obligations. The 2024 refinancing bought time, but it did not solve the underlying leverage problem.

This was the turning point for Alkegen. Rather than pursuing another temporary solution, the company began negotiating a more comprehensive restructuring with its lenders. PJT Partners' RSSG team advised an ad hoc group of first-lien and second-lien creditors alongside Davis Polk & Wardwell, representing their interests throughout the restructuring process.⁴⁵

In July 2026, Alkegen announced a restructuring support agreement and subsequently entered a prepackaged Chapter 11 process. The plan aimed to reduce total debt from about $3.5 billion to $400 million while allowing the company to keep operating.⁴ Under the reorganization, existing first-lien creditors were positioned to receive substantially all of the new equity, shifting ownership away from existing shareholders.⁵ The bankruptcy court confirmed the plan in September 2026.⁶

Rather than liquidating its assets under Chapter 7, Alkegen pursued a restructuring that preserved the value of its operating business. This gave creditors an opportunity to participate in the reorganized company while allowing Alkegen to move forward with significantly less debt. To me, this is an important distinction: the underlying business could continue operating, but the capital structure supporting it needed to change.

As a student at Emory becoming more familiar with capital structure solutions, Chapter 11 processes, and out-of-court alternatives, my biggest takeaway is the difference between fixing liquidity and fixing solvency. The 2024 refinancing bought Alkegen time and improved its short-term flexibility, but it did little to permanently reduce its debt burden. When operating improvements did not materialize as expected, the company needed a more comprehensive solution.

What I find especially interesting about PJT's involvement is the creditor-side perspective. The restructuring wasn't simply about eliminating debt; it also involved negotiating how value would be distributed among creditors and other stakeholders while preserving the underlying business. As I continue learning more about restructuring, this combination of financial analysis, negotiation, and creative capital structure solutions is what makes the field so interesting to me.

In the most prestigious roles in finance for young adults, workers often look far ahead, even after just arriving at the firm. In investment banking, it is very common for analysts to arrive at the firm and, after a short couple of years, bounce out of there to accept an offer at another firm. As this move becomes more common among junior bankers, banks are becoming increasingly upset.

Why the Banks Are Frustrated

If we take a step back and look at what the banks tend to offer young analysts, a lot of it is very justified. They are taking a chance on a young student, before they are even out of undergrad, to spend a 10-week portion of their summer before senior year getting acclimated to the intense environment of investment banking. They put capital, time, and energy into structuring these programs for students, who are all hoping to get a return offer. So when many of them take that offer and use it as a stepping stone to a megafund private equity firm, it is obvious why those banks become upset.

Headhunters are always sourcing options for the private equity funds searching for increasingly young talent, and some students accept offers at banks knowing they want to go into private equity before stepping foot on the floor.

Citi Speeds Up the Clock

Now you are probably thinking: if these banks really are the most powerful forces on Wall Street, how are they going to deal with this? It might not be how you think.

Recently, news broke that Citigroup has shortened its analyst program and taken on an approach that speeds up the process for junior bankers. The program has moved from three years to two, improving junior bankers' chances of promotion at the bank. Also, banks including Citi, Goldman Sachs, and Morgan Stanley have introduced restrictions where junior bankers are required to disclose if they have accepted jobs elsewhere.

Citi specifically believes that accelerating the opportunity for promotion in junior bankers' minds will decrease the temptation of moving to the buy side early on. The higher pay and path to more responsibility will hopefully deter these analysts when offered a spot at a megafund shortly after landing their new investment banking job. David Friedland, Citi's co-head of North America investment banking, who spent 27 years at Goldman Sachs before joining Citi, said, "The reality that private equity is interviewing so early in a banker's career is very unfortunate and to some extent disappointing." The quote exhibits the sentiment that many Wall Street seniors have on the trends for junior bankers in top firms.

JPMorgan Drew the Line First

The retention of analysts was already a discussion last year, when bank executives pushed back at private equity firms for bringing forward these hiring cycles. At JPMorgan, some bankers found out that recruits had skipped mandatory onboarding to interview at private equity firms for their next jobs, and this was just days into their first job. JPMorgan put out a clause saying it would fire any analyst who accepted an outside offer within 18 months of joining. Similar to Citi, the bank trimmed its promotion timeline down to two and a half years, promising the opportunity for larger compensation and responsibility to combat the poaching of its best talent.

Other bank leaders reportedly feel disappointed because, with the constant introduction of new AI advancements, junior bankers have more opportunity than ever to spend time with clients while AI handles the grunt work.

The Bottom Line

At the end of the day, banks will never be able to fully stop talent from interviewing at other firms, specifically on the buy side. They're constantly finding ways to make the roles at their firms more appealing to young professionals, and that is all they can do. Their success depends on people who want to be there and are driven to keep stepping into the opportunity they're given.

This past Tuesday, July 28, FIFA's President, Gianni Infantino, had news leaked about his plans to sell stakes in FIFA to private investors. They had a potential subsidiary of FIFA valued by JPMorgan, and it was set at $20 billion. When breaking it down, their plan was to spin off commercial rights, which include broadcasts, sponsorships, ticketing, and event operations, into a wholly owned subsidiary called FIFA Forward Enterprise, or FFE. And they would sell up to 21% of FFE at a $20 billion valuation, which could result in about $4.2 billion in upfront cash, all while FIFA kept full control of the sport's governance. This $20 billion was based on the implied revenue multiple, as FFE does not have a standalone track record that could be easily used to calculate a valuation, which also raises concern.

Another thing to note is that the return on this move depends heavily on whether the company's value appreciates, because FIFA would not pay ordinary dividends, which would be a less risky way to guarantee return.

Next, JPMorgan's involvement in this plan is quite interesting to unpack. Five years ago, the same bank backed a breakaway idea called the European Super League with roughly $4 billion in financing, which ended up collapsing in under 48 hours after extensive backlash. The bank later apologized because they understood why fans did not like the idea of introducing the new league because of the way it was structured. The no-relegation model completely reworked the design of the sport, and rivaled UEFA, while keeping the clubs who participate safe inside the league to capture economic profit. This was clearly not how football fans envisioned it going.

With that said, JPMorgan was now involved in a new plan, which they thought would be different, and in some ways it was. FIFA selling a private minority stake in the form of 21% of FFE keeps FIFA and does not create a new rivaling league, but the idea still faced extreme backlash. Why? It could be argued that this was just corporate financing, redesigning the structure of a company in a clean way. However, fans and federations saw it as a governance problem dressed as a valuation of the subsidiary, but it was effectively just to gain cash and give private investors a new way to invest in football, stealing the heart of the sport that so many people love.

Something that becomes clear is JPMorgan is not intentionally trying to steal football, or put pain into the heart of the fans, but they get paid either way. They are structured for advisory and structuring fees and placement activity whether the deal does or does not close. Governance fights that face backlash and are forced to renegotiate tend to increase fee activity. The bank is somewhat indifferent to whether the stakeholders actually want it, and does not face loss if the fans reject the new idea. They just extract the value from the potential business idea of selling private shares of FFE, and profit in the short term, regardless of whether Gianni Infantino's plan was scrapped within days of leaking.

Technological advancement has driven the American economy forward for as long as anyone can remember. But every invention eventually hits the same wall: at some point it has to give way to infrastructure investment to keep moving. Railroads needed far more steel once traffic outgrew their initial financing. The internet needed fiber optics laid in the ground to keep the momentum going. And now, with the rise of AI, the need for a tremendous amount of capital to support it has become clear. New data centers, cooling systems, and power generation are all necessary, and raising the money for them is the real constraint.

That constraint is exactly what BlackRock is stepping into. The firm is raising more than $12 billion in bonds to help finance a Meta data center campus in El Paso, Texas. The debt is being issued by a holding company tied to BlackRock's 80% stake in the project, known as Project Sopaipilla Holdings, with Meta owning the other 20%. BlackRock has been pouring capital into data centers all year, including a $40 billion, BlackRock-led consortium deal to acquire Aligned Data Centers, the largest data-center acquisition on record. Meta has separately agreed to lease a large project under development in Shippingport, Pennsylvania, that Aligned is backing.

JPMorgan and Morgan Stanley are running the bond offering, lining up fixed-income investors ahead of pricing that was expected early the following week. These banks are not buying the data centers themselves. They are packaging the debt and finding the institutions willing to fund it, which is its own quiet business built on top of the buildout.

It is worth pausing on how the 80/20 structure works, because it is the whole point. BlackRock's stake runs through two businesses it spent the last year acquiring: Global Infrastructure Partners and HPS Investment Partners. By holding the majority of the venture separately, Meta gets the campus it needs while keeping the associated debt off its own balance sheet, the same template it used with Blue Owl in Louisiana. Meta funds the buildout without carrying the leverage; BlackRock owns the asset and collects on the financing.

Rather than focusing too heavily on the numbers inside these transactions, the more interesting idea is how inventions eventually turn into a capital-allocation problem. Early innovation rewards the inventors behind the new technology. But as time passes, the people who can build that technology at a lower cost, and produce enough capital and infrastructure to support it, are the ones who take the wheel. BlackRock's move into these projects may mark AI's transition into a second stage, where it shifts from a battle of innovation into a battle over the efficient use of capital.

BlackRock is building the toll roads rather than inventing the cars. It is dominating the financing of the right infrastructure for AI companies to use, and making a great deal of money while it does. That is arguably a more stable position than betting on which application of capital will drive the actual AI breakthroughs forward. You simply take a cut from everyone driving the technology, no matter who ends up winning the race.

Every data center itself creates demand for construction, engineering, utility production, and industrial equipment, all blended with skilled labor. AI infrastructure may be becoming an industrial phenomenon, not just a tech investment that depends on people writing the next best model.

In the past, and as we can see today, advances in technology start the push into new realms of business, but the companies that master capital allocation and infrastructure tend to dominate over the long run. BlackRock is showing us how to make real money by charging each competitor to use its roads, all while sitting comfortably in the toll booths.

StepStone Private Venture and Growth Fund, also known as Spring, achieved a 43% return for the year ending in March. Almost all the gains came from marking up illiquid assets, including stakes in private investment funds, using these unrealized gains to blow the company's growth out of the water. In a private fund, marking up an asset means the manager updates its estimated value on paper, not because it sold something, but because they have decided it's now worth more than they purchased it for. The new higher value becomes the fund's Net Asset Value, or NAV. Most PE funds charge an annual management fee as a percentage of NAV, which often runs 1-2%. So if a manager marks up an illiquid stake from $100M to $150M, the fund's NAV just grew by $50M on paper, and the manager's fee along with it. No buyer paid any higher price, but the increase in "value" gave the manager real fee income. For this year, net unrealized gains were $1.87 billion, while realized gains were only $3 million. The only other income from investments was $16.7 million in dividends and interest. When looking at a structure like this, we see how their profits came from recognizing the potential of their investments. They buy fund stakes at a discount to stated NAV, and then immediately write them up, trying to capture real gains. And in doing so, they can charge a hefty fee just for blowing it up on their balance sheet. This mechanism matters because, in contrast to closed-end PE, where the manager only earns fees after they have actually sold something and returned cash to investors, the hurdle for the investor's return on investment is not as large. The open-ended PE firms effectively judge their own work and get paid based on whatever number they set.

This is the same reason you would flag a Discounted Cash Flow Terminal value as the dominant sensitivity: whoever controls the assumptions controls the output and therefore the valuation. However, in this open-ended structure, the manager controls both, and makes a pretty flexible profit based on how he is feeling that day. Zooming out, semiliquid fund assets hit a record $530 billion at the end of 2025, which was up 26% from a year earlier. This is exactly the trend that we are seeing firms like Spring pour their money into, as they can self-market it. This also creates a liquidity problem when considering potential exits for these firms. By May 2026, private equity firms were sitting on nearly 33,000 unsold portfolio companies worth more than $3 trillion that they could not profitably sell. This marked a fourth straight year of distributions totaling less than 15% of the value of investors' private equity holdings. If you pair that with performance, the fifteen largest retail-facing funds produced a median 2025 return of 11.97%, well below the S&P 500's 17.43%, while expense ratios generally ran 3-5%. This is the killer: we are seeing high fees and underperformance, and we can't judge anything by real profitability or exit because nothing is actually being sold. In summary, from a valuation perspective, a mark is only as good as the next similar transaction that confirms or denies this mark-up. However, the problem is that there are no transactions in this area to stress-test any managers' markups.

Drafted #1 overall by Cleveland in 2017, Garrett has played 134 career games and recorded 125.5 career sacks, the most among active players and the Browns' all-time franchise record. He also set the NFL single-season sack record in 2025 with 23 sacks, which earned him his second consecutive Defensive Player of the Year award. On June 1, 2026, the Rams acquired him by sending two-time Pro Bowl edge rusher Jared Verse, a 2027 first-round pick, a 2028 second-round pick, and a 2029 third-round pick.

AJ Brown, a three-time Pro Bowler, posted 1,003 yards and seven touchdowns on 78 catches in 2025, his lowest output since 2021. The Patriots gave up a 2028 first-round pick and a 2027 fifth-round pick to pick up the Wide Receiver, and Brown is signed for four more years at $113 million remaining.

Both trades were announced on June 1, 2026, marking a big day in the NFL as two stars embark on new journeys for the upcoming season.

The Reframe

When evaluating these trades, I think we can directly compare them to a business transaction in which one company pays a price today for an asset it believes will generate revenue in the future. Mergers and acquisitions in a corporate setting have many parallels with sports. First, the assets being acquired are AJ Brown for New England and Myles Garrett for the Rams. The player is the one the teams believe will generate strong outcomes for them in the foreseeable future and is worth giving up picks to acquire. The consideration in these trades was the picks, players, and cap space. Synergies in this case are what the acquiring team expects the player to do for them and the projected positive impact on wins, playoff runs, and ticket sales. Lastly, the due diligence was supposed to be done by the front office to stress-test the deal before pulling the trigger, and, for NFL players, it was about how prone they are to injury and other potential negative outcomes that could arise from the trade itself. It is also worth mentioning that the concept of goodwill is usually honored in sports transactions. Just like an acquiring company books goodwill to account for any premium paid above an asset's fair value, NFL teams routinely overpay for intangible aspects of players, such as leadership, experience, consistent seasons, and other attributes not quantified on paper in their market value.

Deal One: Myles Garrett to the Los Angeles Rams

The Browns sent Myles Garrett for edge rusher Jared Verse, a 2027 first-round pick, a 2028 second-round pick, and a 2029 third-round pick. Garrett is signed through 2030 at $40M AAV, which is the sixth highest paid defender in the league. He is carrying a $23.47M cap hit in 2026. He notably set the NFL single-season sack record in 2025 with 23 sacks, earning him his second consecutive Defensive Player of the Year award.

As we value this strong resume, Garrett being only the sixth-highest-paid defender, but also the best pass rusher in football, may suggest the sports market is undervaluing him relative to his on-field output. This is rare in financial M&A: an asset trading below its fair value.

It is worth noting the leverage problem as well, as the Rams take on Garrett's $23.5M cap hit, which immediately reduces their $27.4M in remaining cap space to almost nothing. This is a very highly leveraged acquisition of the former Browns player, and it leaves the Rams with little to no flexibility after the deal closes. It is fair to say that the Rams made an aggressive move in targeting Garrett, even if his price is technically lower than his output relative to similar players. The Rams' risk lies in giving up three picks and Jared Verse, who is a young, cheap rusher in his own right. That makes for a risky move, given their cap space is reduced to almost nothing, regardless of Garrett being the sixth-highest-paid player.

The leverage problem was less relevant for the Browns because they split his $41.09M dead cap hit across two seasons, with $15.53M in 2026 and $25.56M in 2027, rather than absorbing the cost at once. That is efficient liability management, especially in contrast to the Rams' upcoming debt issues after leaving no cushion in their cap space. Cleveland will now own two first-round picks in 2027, plus good selections in 2028 and 2029. Additionally, they take on Verse's far more manageable $4.1M cap hit in 2026.

Choosing a winner for this trade is quite difficult. The Rams won the present and upcoming seasons, with Myles Garrett on their roster and at a below-market contract price. Even with their debt issues, acquiring the league's leading pass rusher is a strong move and will give Los Angeles confidence heading into the fall. However, the Browns clearly won the future. Cleveland wisely sold Garrett when his stock was likely at its highest, which gives them financial flexibility for years to come and draft capital for the coming years. Verse also offers a strong option, and the organization should prioritize his development for the season after losing Garrett. In finance language, they monetized a depreciating asset, not because it lost value, but because it will, and got the maximum price in the process.

Deal Two: AJ Brown to the New England Patriots

Philadelphia reportedly targeted first and second round picks for Brown, but the eventual deal pushed that first round compensation all the way to 2028. That is a discounted price, and the Eagles got less than the market ask, partly because Brown's relationship with the organization had begun to break down.

The Patriots are likely to send a pick that lands earlier in the first round than their 31st selection in 2026, which means New England is potentially giving up a top-15 pick for a 29-year-old receiver. However, Drake Maye is on his rookie deal, which makes him just under $10M over the next two seasons and helps the Patriots justify the acquisition of Brown and their ability to afford him. That is a decent allocation of their resources as they are purchasing the expensive asset while their other assets, like Drake Maye, remain lower.

It is also worth noting the money problem for Philly. Between his two contracts, the Eagles paid Brown roughly $87M over four seasons but only counted about $44M against their cap, leaving $43.5M in dead money after the trade. This is a classic sunk cost issue for them. With that said, most may take this and assume the Eagles lost this trade, but from a financial perspective, we may conclude otherwise. Philly entered the offseason reportedly seeking first and second round picks for Brown, but the deal was pushed all the way to 2028 for first-round compensation. That is not what they sought, but the Eagles had already planned for Brown's departure, as they traded up to select USC receiver Makai Lemon, traded for Dontayvion Wicks, and signaled interest in additional receivers. We can say they hedged their position before the sale closed, similar to the preparation a company may undertake in M&A. The timing on June 1 also split up Brown's $43.5M dead cap charge across two seasons: $16.3M in 2026 and $27.1M in 2027. Similar to the Browns', they managed their debt well, and it might pay off.

So, the Eagles are still in a good spot and prepared for this financially. Still, New England also showed financial responsibility, and here's why: Drake Maye being on his rookie contract gave them plenty of room to purchase AJ Brown on his current contract before Maye's extension kicks in. Also, while the Eagles were expecting Brown's departure, this may give us insight into the Eagles as a motivated seller, possibly lowering their price for the receiver, making it a solid choice for the Patriots.

In M&A, when a seller needs to exit a position due to a bad relationship, capital pressure, or dysfunction, the buyer gains pricing power. Brown's relationship had been on the decline, allowing the Patriots to swoop in with the right price and the right fit for AJ. We could compare this to buying at a distressed valuation, as the price of the asset may be reflecting circumstances within the company, or, in this case, within the relationship between AJ Brown and the Eagles. The Patriots acquired Brown for a 2028 first-round pick and a throwaway fifth-round pick, which represents a significant discount from the asking price.

The best acquisitions are not always when you outspend everyone else, but rather when you use the seller's circumstances to leverage a deal.