Key Takeaways
- • Francisco Partners co-founder and CEO Dipanjan "DJ" Deb says the firm, which has over $75 billion in capital raised to date and $64 billion in assets under management as of Sept. 30, is deliberately pursuing overlooked opportunities, including software companies the broader market has shunned.
- • Deb views AI as potentially bigger than the internet, but says the private markets are in a bubble, with venture valuations he likens to 1999-2000, while public tech multiples are less stretched.
- • Francisco Partners is underwriting software deals to a seven-to-eight times EBITDA range on the "left-hand side of the barbell" and mid-teens to high-teens multiples on higher-quality assets, versus rich valuations the industry underwrote a couple of years ago.
- • Deb acknowledges AI disruption risk within the existing portfolio, saying some companies are being reinvented through new products and add-on acquisitions, and that the firm will not claim the portfolio is immune.
- • Deb says the firm has changed its governance since its early losses, citing vintage, concentration, and end-market risk lessons, including a 10% single-deal cap and monthly portfolio company reviews.
Summary
Dipanjan "DJ" Deb, co-founder and CEO of Francisco Partners, described the firm's origins and strategy in a Pensions & Investments interview published November 11, 2026. Deb, an Indian immigrant who studied electrical engineering and computer science at the University of California, Berkeley, moved into investment banking after deciding against engineering. He joined Robertson Stephens and later led its hardware banking business. In the late 1990s he joined TPG to build a technology practice alongside Dave Stanton, and the two left in August 1999 to found what is now Francisco Partners. The original thesis was that large-scale private equity had not yet been applied to technology, which Deb said was a novel idea at the time.
The firm's early record was difficult. According to Deb, Fund I lost money on two of its first three deals and was run by Stanton. Deb cited three lessons from that period: vintage risk from overinvesting in one year, concentration risk (two companies held 17% to 18% of the fund, whereas the firm now caps single deals at 10%), and end-market risk, where software, communications, and semiconductor companies selling to the same auto industry share hidden exposure. He said the firm had confused strong returns in a late-1990s bull market with skill. After Fund I struggled, Sequoia Capital's Mike Moritz reportedly lobbied LPs to back a second fund, and Deb took over the firm in 2006. Deb said the firm now runs with formal discipline, including three investment committee approvals per deal, monthly portfolio reviews, and two deal leads per investment.
On AI, Deb said the technology is comparable only to the internet and possibly larger, though he cautioned about recency bias. He said he believes there is a bubble, particularly in private markets, and that venture valuations resemble 1999-2000. Of roughly 85 CEOs he consulted over eight weeks, he estimated about 75% believed "this time it's different," while he sided with the 25% who did not. He said he could not predict when a correction would occur, and guessed around 18 months out.
On software, Deb expects the sector to bifurcate. Some companies may see slowing growth and compressed terminal multiples, creating difficult holdings that require add-on acquisitions to improve returns. Others in protected niches may re-rate. Francisco Partners is underwriting the first group at seven to eight times EBITDA and the second at mid-teens to high-teens multiples, rejecting a return to the 2021-2022 valuation levels. Deb acknowledged that parts of the existing portfolio face AI-related dislocation risk and said the firm is attempting to reinvent those businesses.
The firm's early record was difficult. According to Deb, Fund I lost money on two of its first three deals and was run by Stanton. Deb cited three lessons from that period: vintage risk from overinvesting in one year, concentration risk (two companies held 17% to 18% of the fund, whereas the firm now caps single deals at 10%), and end-market risk, where software, communications, and semiconductor companies selling to the same auto industry share hidden exposure. He said the firm had confused strong returns in a late-1990s bull market with skill. After Fund I struggled, Sequoia Capital's Mike Moritz reportedly lobbied LPs to back a second fund, and Deb took over the firm in 2006. Deb said the firm now runs with formal discipline, including three investment committee approvals per deal, monthly portfolio reviews, and two deal leads per investment.
On AI, Deb said the technology is comparable only to the internet and possibly larger, though he cautioned about recency bias. He said he believes there is a bubble, particularly in private markets, and that venture valuations resemble 1999-2000. Of roughly 85 CEOs he consulted over eight weeks, he estimated about 75% believed "this time it's different," while he sided with the 25% who did not. He said he could not predict when a correction would occur, and guessed around 18 months out.
On software, Deb expects the sector to bifurcate. Some companies may see slowing growth and compressed terminal multiples, creating difficult holdings that require add-on acquisitions to improve returns. Others in protected niches may re-rate. Francisco Partners is underwriting the first group at seven to eight times EBITDA and the second at mid-teens to high-teens multiples, rejecting a return to the 2021-2022 valuation levels. Deb acknowledged that parts of the existing portfolio face AI-related dislocation risk and said the firm is attempting to reinvent those businesses.
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