Orlando Bravo pushes back on private markets criticism: 'Everybody's extremely comfortable'

<p>Orlando Bravo, founder and managing partner of Thoma Bravo, pushed back on mounting criticism of private markets, saying deep sector expertise is separating winners from losers as artificial intelligence creates disruption across the software industry.</p>
<p>"We have been living in the details of the space for a very, very long time, not on a high level, not investing in stocks, [but] investing in companies, customer contracts, knowing the details. So, yes, as a sector specialist in private equity, our companies are very, very different," Bravo said Tuesday in an interview with CNBC's <a href="https://www.cnbc.com/leslie-picker/">Leslie Picker</a>. "We are so comfortable with our private credit book, given the choices we've made us a specialist."</p>
<p>His comments come as investors step up scrutiny of private-market valuations and liquidity after a wave of markdowns and redemption pressure across private credit and equity funds.</p>
<p>Morgan Stanley recently said it expects direct-lending default rates to reach about 8%, nearing Covid-era peaks. Meanwhile, John Zito of Apollo Global Management told UBS clients last month that private equity firms are broadly misstating the value of their software holdings, saying <a href="https://www.cnbc.com/2026/03/16/apollo-john-zito-private-equity-software-valuations.html">"all the marks are wrong."</a></p>
<p>Bravo said Thoma Bravo's investor base, which includes major U.S. pension funds and global sovereign wealth funds, has remained confident due to the firm's long track record and transparency.</p>
<p>"They've seen our marks, they've seen our exits, they've seen our progression," he said. "Everybody's extremely comfortable."</p>
<p>Addressing one of the firm's more visible missteps, Bravo acknowledged overpaying for customer experience software company Medallia. Apollo's Zito pointed to this $6.4 billion take-private deal in 2021 specifically, saying it will be "worse than people expect," according to <a href="https://www.wsj.com/finance/investing/top-apollo-executive-sounds-off-on-arrogance-in-private-markets-4f09b5cb?gaa_at=eafs&amp;amp;gaa_n=AWEtsqdUZyuX49mAkNThhFvVImLp-62lTxI569dGnR2CJfUObLmhatUalfPmVysCdEE%3D&amp;amp;gaa_ts=69b98fc3&amp;amp;gaa_sig=4g_qJRqPOwXIZICa8d3kXvjbOJev__KOFEhWvnh6svhES4vwPGFC6IYwgjX6VmOOxLBHY5Cr9Hxyb7mUdxILqg%3D%3D">the Wall Street Journal.</a></p>
<p>"When we bought it, we way overestimated or extrapolated the very high rate of growth of that company into the future. We made a mistake. And that cost us to pay too much. Now, the equity from our standpoint has been impaired for a long time," he said. "Our investors, this group that holds the capital in the world, has known that for years. So there is no new news."</p>
<p>Still, he said the broader portfolio is performing strongly.</p>
<p>"The other 77 companies that we have, for the most part — and it's so relevant for AI — they're absolutely crushing it," Bravo said.</p>
<p>Bravo drew a sharp distinction between private equity-owned companies and many publicly traded software firms, saying the latter face accelerating disruption. He noted that recent valuation declines in some names are "very warranted."</p>
<p>"In the public markets, if you look at it, there are many, many software companies in the public markets that will be disrupted from AI. Those companies were going to be disrupted anyway. AI will create a disruption a lot faster," Bravo said.</p>