Key Takeaways
- • Apollo Global Management co-head of private equity David Sambur says buyout firms are on the brink of a software reckoning, having failed to recognize how artificial intelligence could upend one of private equity's favored sectors.
- • Sambur describes an expected "multi-car pileup" in software investing, arguing the warning signs were visible as early as 2022.
- • The comments point to a prolonged period of pain for private equity software holdings, according to Bloomberg's reporting of the interview.
Summary
Buyout firms face a software reckoning after failing to anticipate how artificial intelligence would disrupt one of private equity's most favored sectors, according to David Sambur, co-head of private equity at Apollo Global Management Inc. Speaking in an interview with Bloomberg, Sambur said the industry is only now focusing on the risks that have built up in software investing.
Sambur characterized the coming period as a "multi-car pileup" on the software investing highway, signaling that losses across software holdings are likely to emerge rather than be contained. He added that the signals were available well before the current focus, saying "It was all there if you were willing to see it in 2022."
The remarks frame AI as a structural threat to software business models that private equity firms have historically backed heavily through leveraged buyouts. For allocators with exposure to buyout funds, the implication is that software portfolio companies may face prolonged valuation and operating pressure, with write-downs potentially extending across multiple vintages.
The source article is a Bloomberg report based on the interview and does not provide detailed portfolio figures, fund-level exposures, or specific company names in the excerpt available for this summary.
Sambur characterized the coming period as a "multi-car pileup" on the software investing highway, signaling that losses across software holdings are likely to emerge rather than be contained. He added that the signals were available well before the current focus, saying "It was all there if you were willing to see it in 2022."
The remarks frame AI as a structural threat to software business models that private equity firms have historically backed heavily through leveraged buyouts. For allocators with exposure to buyout funds, the implication is that software portfolio companies may face prolonged valuation and operating pressure, with write-downs potentially extending across multiple vintages.
The source article is a Bloomberg report based on the interview and does not provide detailed portfolio figures, fund-level exposures, or specific company names in the excerpt available for this summary.
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