Andreessen Horowitz asks whether private equity is cooked as tech buyouts shrink

Private equity's share of global tech buyout deals has fallen from 34% in 2023 to 11% in early 2026, roughly two-thirds of its footprint in about three years. The figure comes from Jen Kha, a partner at Andreessen Horowitz, in a newsletter dated November 4, 2026 titled "Is Private Equity Cooked?" Because the author works for a venture firm, the analysis carries an obvious bias, though the data points cited are specific and checkable.

Kha argues that limited partners continue to re-up with buyout managers even as tech buyouts lose ground, with habit cited as a main reason. Performance data cited in the report favors venture. In the first half of 2026, venture funds marked up their tech holdings by 16%, while buyout funds marked theirs down 4%. Over the past decade, US buyout funds returned 14.5% annually and trailed the Russell 3000, while US venture funds returned 17.6% a year.

The report also highlights leverage as a pressure point. PE-backed middle-market companies from the 2019 through 2025 vintages carry net debt of 4.7x to 6.0x adjusted EBITDA, against roughly 2x for the median S&P 500 company. Buyout fundraising fell 16% in 2025 to $395 billion and, according to the report, stayed weak through mid-2026. The report frames the current AI-driven technology wave as favoring venture's investing style over private equity's preference for stable, cash-generative businesses that can service debt.

The report includes a caveat that venture's 16% markup reflects valuations rather than cash returned, and that private marks are only proven when companies are sold or go public. For buyout firms, the report's leverage figures and the 4% markdown may signal near-term valuation pressure if growth slows or AI pricing pressure emerges.