Key Takeaways
- • Orlando Bravo, founder and managing partner of Thoma Bravo, defended the firm's private markets positioning against mounting valuations and liquidity scrutiny, asserting deep sector expertise in software as a competitive advantage in an AI-disrupted landscape.
- • Thoma Bravo maintains confidence in its private credit portfolio and investor base—including major U.S. pension funds and global sovereign wealth funds—citing transparent mark-to-market practices and a consistent exit track record.
- • Industry-wide pressure on private market valuations has intensified, with Morgan Stanley projecting direct-lending default rates near 8% (approaching Covid-era peaks) and Apollo's John Zito alleging broad software valuation misstatements across private equity firms.
- • Bravo acknowledged a significant investment misstep in customer experience software company Medallia, signaling selective transparency on portfolio underperformance while emphasizing the firm's ability to navigate sector-specific challenges.
- • Thoma Bravo's $34.4 billion recent fundraise reflects sustained investor confidence despite industry headwinds, positioning the firm as a sector specialist capable of distinguishing winners from losers as AI disruption reshapes software valuations.
Summary
Orlando Bravo, founder and managing partner of Thoma Bravo, directly confronted escalating criticism of private market valuations and liquidity constraints in remarks to CNBC on January 21, 2026, during the World Economic Forum in Davos. His defense centered on sector expertise and differentiation: Thoma Bravo's competitive advantage, Bravo argued, stems from "living in the details of the space for a very, very long time," investing in individual companies and customer contracts rather than pursuing broad exposure through equity strategies. This specialist approach, he contended, positions the firm's portfolio companies distinctly from broader private equity holdings now facing valuation pressure.
The backdrop for Bravo's comments reflects genuine market stress. Morgan Stanley recently projected direct-lending default rates approaching 8%, nearing pandemic peaks, while Apollo Global Management's John Zito advised UBS clients that private equity firms are broadly mismarking software portfolio valuations. These warnings have fueled investor scrutiny of both mark-to-market practices and redemption capacity across private credit and equity vehicles. Bravo directly addressed this concern by highlighting transparency with Thoma Bravo's investor base—major U.S. pension funds and global sovereign wealth funds—noting they have observed the firm's marks, exits, and portfolio progression over time. "Everybody's extremely comfortable," Bravo stated, framing ongoing investor support as evidence of earned credibility.
Bravo acknowledged a notable portfolio misstep when addressing Medallia, a customer experience software acquisition, though the primary source indicates this discussion was truncated in the available text. This selective transparency—admitting specific mistakes while emphasizing overall portfolio strength—reflects a calculated messaging approach designed to manage investor concerns without undermining confidence in the firm's broader strategy. The Medallia reference also signals awareness of the sector-specific vulnerabilities that have drawn criticism from figures like Apollo's Zito, positioning Bravo's comments as a direct rebuttal to allegations of systematic valuation errors across the private equity software space.
The backdrop for Bravo's comments reflects genuine market stress. Morgan Stanley recently projected direct-lending default rates approaching 8%, nearing pandemic peaks, while Apollo Global Management's John Zito advised UBS clients that private equity firms are broadly mismarking software portfolio valuations. These warnings have fueled investor scrutiny of both mark-to-market practices and redemption capacity across private credit and equity vehicles. Bravo directly addressed this concern by highlighting transparency with Thoma Bravo's investor base—major U.S. pension funds and global sovereign wealth funds—noting they have observed the firm's marks, exits, and portfolio progression over time. "Everybody's extremely comfortable," Bravo stated, framing ongoing investor support as evidence of earned credibility.
Bravo acknowledged a notable portfolio misstep when addressing Medallia, a customer experience software acquisition, though the primary source indicates this discussion was truncated in the available text. This selective transparency—admitting specific mistakes while emphasizing overall portfolio strength—reflects a calculated messaging approach designed to manage investor concerns without undermining confidence in the firm's broader strategy. The Medallia reference also signals awareness of the sector-specific vulnerabilities that have drawn criticism from figures like Apollo's Zito, positioning Bravo's comments as a direct rebuttal to allegations of systematic valuation errors across the private equity software space.
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