Thoma Bravo Founder Says Private Equity Has Lost Its Way

Private equity has lost its way in the last three years with its leaders becoming too concerned about macroeconomics instead of looking at the fundamentals of companies, according to Orlando Bravo, co-founder and managing partner of buyout giant Thoma Bravo.

Firms are holding onto assets for longer as exits have become more challenging with a muted initial public offering market. Private equity firms are increasingly dependent on financial engineering such as continuation vehicles, where firms dispose of stakes in their companies to new funds they’ve created — effectively selling to themselves.

“I want to talk to all the ...