--- title: "An a16z partner calls tech buyouts cooked; more than $15 billion moved into AI buyout funds anyway" description: "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." publisher: "The Inference" section: "Economy" published: 2026-11-05T19:10:48.273Z modified: 2026-11-05T19:10:48.273Z canonical: https://theinference.org/article/an-a16z-partner-calls-tech-buyouts-cooked-more-than-15-billion-moved-into-ai-buyout-funds-anyway language: en keywords: "Private Equity, Venture Capital, IPOs, AI Infrastructure, Debt" --- # 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. 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?](https://www.a16z.news/p/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](https://theinference.org/markets/companies/msci), 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](https://theinference.org/markets/companies/lightspeed) told New Mexico's State Investment Council it had [raised more than $750 million](https://mecklenburgtribune.com/article/new-mexico-fund-backs-lightspeed-ai/) for an AI Renaissance Fund that will buy established service businesses and rebuild them with artificial intelligence [3][4]. 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](https://theinference.org/markets/people/elon-musk)'s [xAI](https://theinference.org/markets/companies/xai) 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](https://dealroom.co/news/167785-lightspeed-tops-750m-target-for-ai-buyout-fund/) 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]. *Chart: **PE-backed debt due two years out has more than doubled** Bar chart of risky loans owed by US PE-backed companies due two years out: about $60 billion average in 2023 to 2025, rising to $140 billion due in 2028 and $160 billion due in 2029.* *Risky loans owed by US PE-backed companies maturing two years out: the 2023 to 2025 average versus scheduled 2028 and 2029 maturities, billions of dollars. Source: a16z, Is Private Equity Cooked?, November 4, 2026, citing the Wall Street Journal and PitchBook. [1]* ## The one price an outsider set [Accelevation](https://theinference.org/markets/companies/accelevation), 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](https://theinference.org/markets/companies/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](https://finance.yahoo.com/markets/stocks/articles/accelevation-set-list-wednesday-raising-055552219.html), with 20 million of the 30 million shares sold coming from Olympus stockholders [6][7]. Revenue rose from under $3 million in 2021 to $447.8 million in 2025 [7]. The stock [touched $11.24 on November 4](https://www.marketbeat.com/instant-alerts/price-accelevation-nasdaq-accv-sets-new-52-week-low-time-to-sell-2026-11-04/) [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. ## Takeaway An a16z partner argues tech buyouts are overleveraged and underperforming, yet more than $15 billion has moved into AI buyout funds this year; the trade's first public test, Accelevation, is trading 46 percent below its IPO price, and the 2028 debt maturities will show who was right. ## Sources 1. [a16z (a16z.news), Is Private Equity Cooked?, 4 November 2026](https://www.a16z.news/p/is-private-equity-cooked) 2. [Crypto Briefing, Andreessen Horowitz asks whether private equity is cooked as tech buyouts shrink, 4 November 2026](https://cryptobriefing.com/a16z-private-equity-tech-buyouts-decline/) 3. [Dealroom News, Lightspeed tops $750M target for AI buyout fund, 29 October 2026](https://dealroom.co/news/167785-lightspeed-tops-750m-target-for-ai-buyout-fund/) 4. [Mecklenburg Tribune, New Mexico fund backs Lightspeed AI, 30 October 2026](https://mecklenburgtribune.com/article/new-mexico-fund-backs-lightspeed-ai/) 5. [The Inference, Accelevation's IPO stock traded as low as $9.75, 46% below its $18 offer, as sponsor Olympus sells, 5 November 2026](/article/accelevation-s-ipo-stock-traded-as-low-as-9-75-46-below-its-18-offer-as-sponsor-olympus-sells) 6. [Accelevation press release via The National Law Review, Accelevation Announces Pricing of Initial Public Offering, 29 September 2026](https://natlawreview.com/press-releases/accelevation-announces-pricing-initial-public-offering) 7. [Benzinga via Yahoo Finance, Accelevation Set to List Wednesday After Raising $540 Million in IPO Fueled By AI Data Center Demand, 30 September 2026](https://finance.yahoo.com/markets/stocks/articles/accelevation-set-list-wednesday-raising-055552219.html) 8. [MarketBeat, Accelevation (NASDAQ:ACCV) Sets New 52-Week Low - Time to Sell?, 4 November 2026](https://www.marketbeat.com/instant-alerts/price-accelevation-nasdaq-accv-sets-new-52-week-low-time-to-sell-2026-11-04/) --- An a16z partner calls tech buyouts cooked; more than $15 billion moved into AI buyout funds anyway — The Inference. Canonical: https://theinference.org/article/an-a16z-partner-calls-tech-buyouts-cooked-more-than-15-billion-moved-into-ai-buyout-funds-anyway