E434: Warren Gibbon on How AI is Changing the Private Markets

Private equity's historical outperformance rested on falling rates and cheap multiples that have reversed, demanding fresh, company-by-company underwriting.

• Re-underwrite private markets: Gibbon says the 20-40 year outperformance data used to justify heavy PE allocations was driven by declining rates and cheap entry multiples that no longer apply; middle-market buyout multiples rose from ~8x to ~12x EBITDA.
• AI capex concentration: Hyperscaler capex is ~70% of total US corporate CapEx this year and rising, funded by free cash flow; Gibbon is a 'believer' on hyperscalers but wary of chip/memory beneficiaries given efficiency gains.

Themes, sentiment and reasons are AI-written paraphrases, checked so they never quote an episode. They may contain errors. Not investment advice. Episodes remain the property of their creators.