Orlando Bravo pushes back on private markets criticism: ‘Everybody’s extremely comfortable’

Orlando Bravo, the founder and managing partner of Thoma Bravo, recently addressed the criticism surrounding private markets in the face of increasing disruption caused by artificial intelligence in the software industry. Bravo emphasized the importance of deep sector expertise in distinguishing successful companies from those that struggle to adapt to changing landscapes.

In an interview with CNBC’s Leslie Picker, Bravo highlighted Thoma Bravo’s focus on investing in companies with a detailed understanding of their operations, customer contracts, and market dynamics. He emphasized the firm’s specialization in private equity, which sets their portfolio apart from more general investments in public markets.

As scrutiny mounts over private-market valuations and liquidity, Bravo reassured investors that Thoma Bravo’s long track record and transparency have instilled confidence in their investor base, which includes major U.S. pension funds and global sovereign wealth funds. Despite challenges like overpaying for Medallia, a customer experience software company, Bravo acknowledged mistakes but maintained that the firm’s overall performance remains strong.

Bravo also drew a clear distinction between privately owned companies and publicly traded software firms, noting that the latter face increasing disruption from AI. He suggested that recent valuation declines in some public software companies are justified, as AI accelerates the pace of industry transformation.

Overall, Bravo expressed confidence in Thoma Bravo’s ability to navigate the evolving software landscape, citing the firm’s expertise and focus on sector-specific investments. With a portfolio of 77 companies that are excelling in the AI era, Bravo remains optimistic about the future of private equity in the face of technological disruption.

By leveraging its deep understanding of the software industry and commitment to transparency, Thoma Bravo continues to navigate challenges and capitalize on opportunities in the private markets. Investors can look to the firm’s specialized approach and track record of success as indicators of resilience in an increasingly complex market environment.