An a16z partner calls tech buyouts cooked; more than $15 billion moved into AI buyout funds anyway
Venture funds marked their tech holdings up 16 percent in the first half of 2026 while buyout funds marked theirs down 4 percent, and about $140 billion of PE-backed debt comes due in 2028. Accelevation, the AI-infrastructure stock a buyout fund took public at $18 in September, has traded as much as 46 percent below that offer.
Vincent Jiang · 3 min read
On November 4, Andreessen Horowitz partner Jen Kha published a scorecard for the buyout side of the AI trade under the title *Is Private Equity Cooked?* 1 In the first half of 2026, venture funds marked their tech holdings up 16 percent while buyout funds marked theirs down 4 percent, on data from MSCI−2.73% — MSCI, down 2.73 percent as of its last quote, the index and analytics firm 1. A venture firm grading the asset class it sells against invites skepticism, and the 16 percent markup is a valuation, not cash returned 2.
More than $15 billion moved in anyway
On October 27, the venture firm Lightspeed told New Mexico's State Investment Council it had raised more than $750 million for an AI Renaissance Fund that will buy established service businesses and rebuild them with artificial intelligence 34.
The council, which runs a $75.8 billion sovereign wealth fund financed by oil and gas revenue, committed $120 million despite activist objections to Lightspeed's stakes in Elon Musk's xAI$200B — xAI, private, latest valuation $200B and Neuralink; State Investment Officer Jon Clark said the new fund is separate from those earlier vehicles 4. Clearlake closed $14.8 billion on the same thesis this year, and Aldaron launched with about $885 million for AI-driven mid-market turnarounds 3.
Buyout portfolios carry triple the market's debt
Kha's core exhibit is leverage. Companies bought by private equity between 2019 and 2025 carry net debt of 4.7 to 6.0 times EBITDA, a rough proxy for a company's operating cash earnings, against about 2 times for the median S&P 500 company 1.
Over ten years, US buyout funds returned 14.5 percent a year and trailed the Russell 3000, the broad index covering most of the US stock market, while venture returned 17.6 percent without borrowed money 1. PE-backed tech exit value is down 77 percent year on year, and buyout fundraising fell 16 percent in 2025, to $395 billion 1.
Absent outside buyers, sponsors sell to continuation funds they also manage: 14 percent of exit value in the first half of 2026, against 5 percent in 2020 1.
PE-backed debt due two years out has more than doubled
Loan maturities two years out have jumped to more than double the recent norm
Data
| Value | |
|---|---|
| 2023 to 2025 avg, due two years out | $60B |
| Due in 2028 | $140B |
| Due in 2029 | $160B |
The one price an outsider set
Accelevation−13.76% — Accelevation, down 13.76 percent as of its last quote, the trade's first public test, traded as low as $9.75 on November 5, 46 percent below its $18 offer, a break The Inference tracked as it happened 5.
Olympus Partners, a private equity firm, had taken the Miamisburg, Ohio maker of power and structural systems for AI data centers public at $18 on September 30 in a $540 million offering, with 20 million of the 30 million shares sold coming from Olympus stockholders 67. Revenue rose from under $3 million in 2021 to $447.8 million in 2025 7.
The stock touched $11.24 on November 4 8. Two directors bought at $18 on October 1; the consensus analyst target is $19.43 8. The choice: buy the markdown at the directors' price, or read such listings as continuation vehicles waiting for a lender to set the value.
The bull case rests on rate cuts
Optimists expect cheaper debt to carry the deals, and Kha concedes smaller buyouts outside levered software can still do fine 1. Her lending data argues otherwise: Golub Capital, one of the biggest lenders to PE-backed companies, watched its software borrowers slow from 9 percent revenue growth to under 3 percent in two years, and a deal that needed 5 percent annual EBITDA growth in 2015 now needs 10 to 12 1.
Watch the 2028 maturities, Lightspeed's first acquisitions, and who buys Accelevation next. When an outside buyer pays, the market sets a price anyone can check; a sale into a fund the sponsor itself manages leaves the value to whoever lends against it next.
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