Thoma Bravo’s $34B Win Leaves PE Rivals Choking on Exhaust Fumes

As per usual, Berlin is a city divided. East versus West. Collectivism versus individualism. Hard-style techno versus groovy, melodic house. And now: the private equity haves versus the private equity have-nots.

This week, PE movers and shakers are gathering in the historic German capital for their annual SuperReturn conference at a time when the once-thriving industry is suddenly and decisively splintering between winners and losers. Among the big winners? Thoma Bravo. According to a report in The Wall Street Journal on Tuesday, the software-focused private equity giant bucked an industry slump to close three separate funds totaling a massive $34.4 billion.

Bravo, Thoma Bravo

Private equity is trapped in stasis. Buyout firms are still sitting on some $1.2 trillion of dry powder waiting to be deployed, about a quarter of which has been available for at least four years, according to Bain & Co.’s mid-year industry outlook. PE now also controls a record 29,000 companies worth some $3.6 trillion, as of Bain’s first-quarter industry report in March; half of those have been owned for five years or more. And that’s part of the problem: Ownership of said companies dates back to the era of lower interest rates and higher valuations, making them harder to move today, as both global M&A and IPO markets have ground to a halt. Translation: PE’s exit ramps are quickly closing.

With fewer and fewer exits, investors are seeing fewer and fewer returns. Which means PE is having a harder and harder time finding backers for new funding rounds — especially with the rise of private credit and other alternative investment vehicles competing for the same cash. All of which is why Thoma Bravo’s big raise makes it such an industry standout:

• Global PE fundraising has declined for five straight quarters, according to Bain, though the firm says there is a chance the trend could be narrowly reversed in Q2. The first three months of 2025 also marked the first quarter in a decade in which no PE firm closed a fund worth at least $5 billion. According to Pitchbook data seen by Bloomberg, global PE fundraising in Q1 reached just $116 billion, down about 33% year-over-year.
• Thoma Bravo’s massive raise spans three different funds. The biggest, a $24.3 billion raise for its main buyout fund, matches its raise from 2022 and bests the $21 billion fund closed by Blackstone in March as well as EQT’s $23.7 billion raise two Februarys ago to be the largest since the start of 2024.

Return Policy: So, just how dismal have PE returns been? According to Bain, contributions from investors have equaled or outweighed fund distributions in five of the past six years. Even more alarming for the industry, according to a recent McKinsey report: Private equity overall has underperformed the S&P 500 over the past year, the past three years, and the past five years — marking a major reversal of the sector through the century so far.