IS PRIVATE EQUITY COOKED?

Summary from the TLDR Founders newsletter

Private equity firms could borrow to buy mature software companies because lenders could count on their customers renewing. AI is making those renewals harder to bank on, just as higher rates make the next buyout harder to finance. It is estimated that a typical buyout now needs 10% to 12% annual EBITDA growth to match what a 2015 deal could earn with about 5%. That's a higher bar for the next buyer at a time when revenue growth at Golub Capital's software borrowers has slowed from 9% to under 3% in two years.