Orlando Bravo, managing accomplice of Thoma Bravo, speaks throughout “Squawk on the Avenue” on the World Financial Discussion board in Davos, Switzerland, on Jan. 21, 2026.
Oscar Molina | CNBC
Orlando Bravo, founder and managing accomplice of Thoma Bravo, pushed again on mounting criticism of personal markets, saying deep sector experience is separating winners from losers as synthetic intelligence creates disruption throughout the software program trade.
“We now have been dwelling within the particulars of the house for a really, very very long time, not on a excessive stage, not investing in shares, [but] investing in firms, buyer contracts, realizing the small print. So, sure, as a sector specialist in personal fairness, our firms are very, very completely different,” Bravo stated Tuesday in an interview with CNBC’s Leslie Picker. “We’re so snug with our personal credit score ebook, given the alternatives we have made as a specialist.”
His feedback come as buyers step up scrutiny of private-market valuations and liquidity after a wave of markdowns and redemption strain throughout personal credit score and fairness funds.
Morgan Stanley not too long ago stated it expects direct-lending default charges to achieve about 8%, nearing Covid-era peaks. In the meantime, John Zito of Apollo World Administration instructed UBS purchasers final month that non-public fairness companies are broadly misstating the worth of their software program holdings, saying “all of the marks are mistaken.”
Bravo stated Thoma Bravo’s investor base, which incorporates main U.S. pension funds and international sovereign wealth funds, has remained assured because of the agency’s lengthy observe file and transparency.
“They’ve seen our marks, they’ve seen our exits, they’ve seen our development,” he stated. “Everyone’s extraordinarily snug.”
Addressing one of many agency’s extra seen missteps, Bravo acknowledged overpaying for buyer expertise software program firm Medallia. Apollo’s Zito pointed to this $6.4 billion take-private deal in 2021 particularly, saying it is going to be “worse than individuals count on,” in line with the Wall Avenue Journal.
“After we purchased it, we method overestimated or extrapolated the very excessive price of progress of that firm into the longer term. We made a mistake. And that price us to pay an excessive amount of. Now, the fairness from our standpoint has been impaired for a very long time,” Bravo stated. “Our buyers, this group that holds the capital on the earth, has recognized that for years. So there is no such thing as a new information.”
Nonetheless, he stated the broader portfolio is performing strongly.
“The opposite 77 firms that we’ve got, for essentially the most half — and it is so related for AI — they’re completely crushing it,” Bravo stated.
Bravo drew a pointy distinction between personal equity-owned firms and plenty of publicly traded software program companies, saying the latter face accelerating disruption. He famous that current valuation declines in some names are “very warranted.”
“Within the public markets, in the event you have a look at it, there are a lot of, many software program firms within the public markets that shall be disrupted from AI. These firms have been going to be disrupted anyway. AI will create a disruption so much sooner,” Bravo stated.
