Orlando Bravo Defends Private Equity’s Deep-Dive Approach Amid Criticism
Orlando Bravo, founder and managing partner of Thoma Bravo, pushed back on mounting criticism of private markets during an interview at the World Economic Forum in Davos, Switzerland, on Jan. 21, 2026. Speaking with CNBC’s Leslie Picker, Bravo argued that deep, sector-specific expertise is what separates successful private equity firms from others, particularly as artificial intelligence drives disruption across the software industry.
“We have been living in the details of the space for a very, very long time, not on a high level, not investing in stocks, [but] investing in companies, customer contracts, knowing the details,” Bravo stated. “So, yes, as a sector specialist in private equity, our companies are very, very different.” He expressed strong confidence in the firm’s private credit strategy, noting, “We are so comfortable with our private credit book, given the choices we’ve made as a specialist.”
Bravo’s comments arrive as investors increasingly scrutinize private-market valuations and liquidity. This follows a period marked by significant markdowns and redemption pressure across both private credit and equity funds. Morgan Stanley recently projected that direct-lending default rates could reach approximately 8%, nearing the peaks seen during the COVID-19 pandemic. Separately, John Zito of Apollo Global Management told UBS clients that private equity firms are broadly misstating the value of their software holdings, claiming “all the marks are wrong.”
Despite this broader sector headwind, Bravo emphasized that Thoma Bravo’s investor base—which includes major U.S. pension funds and global sovereign wealth funds—has remained confident. He attributed this stability to the firm’s long track record and transparency, saying, “They’ve seen our marks, they’ve seen our exits, they’ve seen our progression. Everybody’s extremely comfortable.”
Acknowledging Mistakes: The Medallia Lesson
Bravo directly addressed one of the firm’s more visible setbacks: the $6.4 billion take-private acquisition of customer experience software company Medallia in 2021. Apollo’s Zito specifically highlighted this deal as an example of overvaluation, telling the Wall Street Journal it will be “worse than people expect.”
“When we bought it, we way overestimated or extrapolated the very high rate of growth of that company into the future. We made a mistake. And that cost us to pay too much. Now, the equity from our standpoint has been impaired for a long time,” Bravo conceded. He noted that the firm’s investors have been aware of this impairment for years, framing it as an acknowledged learning moment rather than new information. “Our investors, this group that holds the capital in the world, has known that for years. So there is no new news.”
AI Disruption: Private vs. Public Software Companies
Why Private Equity-Owned Companies May Be Better Positioned
Bravo drew a sharp distinction between companies in Thoma Bravo’s portfolio and many publicly traded software firms, arguing that the latter face more immediate and severe disruption from AI. He contended that the hands-on, operational approach of private equity—characterized by deep sector knowledge and active ownership—better positions portfolio companies to navigate technological shifts.
“The other 77 companies that we have, for the most part—and it’s so relevant for AI—they’re absolutely crushing it,” Bravo said, referencing Thoma Bravo’s broader portfolio beyond Medallia. His implication is that private equity’s model of intensive involvement in customer contracts, product roadmaps, and operational details allows for faster adaptation compared to the often more diffuse governance of public companies.
