Key Takeaways
- • Orlando Bravo defends private markets amid heightened scrutiny: Thoma Bravo's founder and managing partner pushed back against mounting criticism of private-market valuations and liquidity, asserting investor confidence remains strong due to the firm's transparency, long track record, and sector expertise.
- • Sector specialization cited as competitive moat: Bravo emphasized that deep operational knowledge of software companies—including customer contracts and financial details—differentiates Thoma Bravo from broader competitors, particularly as AI disruption reshapes the software industry.
- • Investor base confidence remains intact despite headwinds: Major U.S. pension funds and global sovereign wealth funds backing Thoma Bravo have maintained confidence based on visibility into the firm's markings, exits, and historical progression, according to Bravo.
- • Private credit markdowns and default concerns escalate industry-wide: Morgan Stanley projects direct-lending default rates near 8% (approaching Covid-era peaks), while Apollo Global Management's John Zito flagged potential broad mispricing of software holdings across private equity firms.
- • Thoma Bravo acknowledges past investment misstep: Bravo acknowledged overpaying for Medallia, a customer experience software company that Apollo cited as an example of inflated private equity valuations.
Summary
Orlando Bravo, founder and managing partner of Thoma Bravo, mounted a public defense of private markets on March 17, 2026, during an interview with CNBC's Leslie Picker at the World Economic Forum in Davos. His comments directly addressed intensifying investor concerns about valuations, liquidity, and potential markdowns across private credit and equity funds.
Bravo attributed Thoma Bravo's resilience to specialized sector expertise rather than broad market exposure. He stressed that the firm operates as a deep-sector specialist in software, investing in individual companies and their customer contracts rather than making generalized stock-like bets. "We have been living in the details of the space for a very, very long time," Bravo said, noting that this granular approach differentiates the firm's portfolio companies significantly from competitors and provides confidence in the firm's private credit holdings.
The comments arrive amid a broader reckoning in private markets. Morgan Stanley recently projected that direct-lending default rates could reach approximately 8%, approaching levels last seen during the Covid-era downturn. More pointedly, John Zito of Apollo Global Management told UBS clients that private equity firms broadly are misstating the value of their software holdings, with Zito asserting that "all the marks are wrong." This critique carries weight given Apollo's prominence in the private credit space.
Bravo maintained that Thoma Bravo's investor base—which includes major U.S. pension funds and global sovereign wealth funds—has remained "extremely comfortable" with the firm's performance due to demonstrated transparency. "They've seen our marks, they've seen our exits, they've seen our progression," Bravo stated, suggesting that historical accountability has preserved LP confidence even as industry-wide scrutiny intensifies.
The managing partner acknowledged at least one significant misstep: the firm's overpayment for Medallia, a customer experience software company. This acquisition has become emblematic of the private equity industry's software valuation challenges, with Apollo's Zito specifically citing it as an example of inflated marks during this period of AI-driven market disruption.
Bravo attributed Thoma Bravo's resilience to specialized sector expertise rather than broad market exposure. He stressed that the firm operates as a deep-sector specialist in software, investing in individual companies and their customer contracts rather than making generalized stock-like bets. "We have been living in the details of the space for a very, very long time," Bravo said, noting that this granular approach differentiates the firm's portfolio companies significantly from competitors and provides confidence in the firm's private credit holdings.
The comments arrive amid a broader reckoning in private markets. Morgan Stanley recently projected that direct-lending default rates could reach approximately 8%, approaching levels last seen during the Covid-era downturn. More pointedly, John Zito of Apollo Global Management told UBS clients that private equity firms broadly are misstating the value of their software holdings, with Zito asserting that "all the marks are wrong." This critique carries weight given Apollo's prominence in the private credit space.
Bravo maintained that Thoma Bravo's investor base—which includes major U.S. pension funds and global sovereign wealth funds—has remained "extremely comfortable" with the firm's performance due to demonstrated transparency. "They've seen our marks, they've seen our exits, they've seen our progression," Bravo stated, suggesting that historical accountability has preserved LP confidence even as industry-wide scrutiny intensifies.
The managing partner acknowledged at least one significant misstep: the firm's overpayment for Medallia, a customer experience software company. This acquisition has become emblematic of the private equity industry's software valuation challenges, with Apollo's Zito specifically citing it as an example of inflated marks during this period of AI-driven market disruption.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.