—— California Passes $311B Budget Bill; UBS to Cut Over Half Credit Suisse Staff; Citadel Interns Paid Nearly $20K/Month; Manhattan Rent-Control Loft for Sale; Brookfield Bids for AEL; Postmates Early Investor Raises $400M; Jefferies Investment Banking Revenue Falls
1. California Passes $311B Budget Bill
On Monday night, California Governor Gavin Newsom and state lawmakers signed a $311 billion budget bill effective from July.
The new bill reserves $38 billion in savings, the largest amount in state history.
Since taking office in 2019, Governor Newsom has overseen consecutive budget surpluses, with the current fiscal year’s surplus reaching a record $100 billion.
However, due to a slowdown in the tech sector and stock market volatility, California’s revenues have begun to decline. Given the state’s reliance on income taxes from wealthy residents, market swings heavily impact budget forecasts. To prepare for uncertainty, the governor decided to significantly expand savings.
Lawmakers stated that due to the new year’s revenue shortfall, they were forced to cut public transportation funding.
The $38 billion budget reserve is the largest in US history.
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2. UBS to Cut Over Half of Credit Suisse Staff
Sources revealed that UBS Group will start laying off more than half of Credit Suisse Group’s employees from July.
Credit Suisse’s investment banking units in London, New York, and parts of Asia will bear the brunt, impacting bankers, traders, and support staff.
Credit Suisse had previously informed employees that at least three rounds of layoffs were expected this year, with the first round in July and two more tentatively scheduled for September and October.
Three months after UBS’s emergency takeover of Credit Suisse, the scale of layoffs has now been finalized. Following the merger, UBS had 120,000 employees but plans to cut costs by $6 billion in the coming years.
UBS plans to cut 35,000 jobs, close to analysts’ forecasts of 30,000.
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3. Citadel Interns Paid Nearly $20K/Month
According to new research from Levels.fyi, median intern pay at the top 16 US financial firms rose 19% this year.
At Citadel and Citadel Securities, median intern hourly pay surged 25% to $120, equivalent to a monthly pre-tax salary of $19,200.
Due to the attractive pay, Citadel received 69,000 internship applications this year, a 65% year-over-year increase.
Despite bonus cuts at major banks, Wall Street still has abundant funding to attract top talent.
Wall Street’s demand for top talent is reflected in surging intern salaries.
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4. Manhattan Rent-Control Loft for Sale
A loft in Manhattan’s Greenwich Village is now listed for $4 million. Compared to similar units, this price is considered very low—but there’s a catch.
The 5,800-square-foot unit houses a rent-stabilized tenant paying only $2,346.21 per month, with minimal allowed annual increases. The tenant retains rent protections even if ownership changes.
Because the rent doesn’t even cover monthly maintenance fees, the unit cannot be owner-occupied and would continue losing money.
According to brokerage Compass, the unit at 12 E. 12th Street is only suitable for “investor” buyers hoping the tenant eventually vacates.
Two other units in the building recently sold for $9 million and $10 million, highlighting the economic impact of the long-term tenant.
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5. Brookfield Bids for AEL
Private equity giant Brookfield has offered to acquire American Equity Investment Life (AEL), a retirement annuity and life insurer, for $4.3 billion.
AEL’s board could sign the deal as early as this week.
Founded in Iowa, AEL is one of the few independent annuity providers remaining in the US, managing over $70 billion in assets.
Under the proposal, Brookfield Reinsurance will acquire AEL at $55 per share, a 35% premium over last Friday’s closing price.
The deal would include cash and shares of Brookfield Asset Management’s listed entity.
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6. Postmates Early Investor Raises $400M
Uncork Capital, an early investor in Postmates, has raised $400 million across two new venture funds.
One of the $200 million funds will focus on seed-stage investments and support follow-on growth rounds.
While growth-stage VC firms have struggled to raise capital recently, top seed-stage investors like Uncork remain less affected.
Managing Partner Andy McLoughlin said early-stage valuations have normalized, calling it a healthy correction rather than a collapse.
Uncork plans to invest only in companies with potential “monopoly-level” IP advantages, avoiding hype-driven bets.
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7. Jefferies Investment Banking Revenue Falls
Jefferies Financial Group reported a 26% decline in investment banking revenue for its fiscal second quarter, dragging down net profit and causing shares to fall about 5%.
For the quarter ending May 31, investment banking revenue fell to $510 million, missing the $663 million consensus forecast. However, the firm said the decline was in line with broader market trends.
CEO Richard Handler said the second quarter results reflect cyclical weakness and harsh market conditions.
Jefferies’ trading division performed well, adapting better to current market dynamics.
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This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.