Andreessen Horowitz is warning that the conditions behind private equity’s booming 2010s are unlikely to return, as higher borrowing costs, slower exits and technological disruption reshape the industry’s traditional buyout business.
The firm, colloquially known as “a16z,” published commentary on Nov. 4 arguing that the current challenges facing buyout firms reflect a structural shift rather than a temporary market downturn.
“The 2010s aren’t coming back anytime soon,” managing partner Jen Kha wrote, citing the end of cheap debt, fewer acquisition opportunities and a slowdown in sponsor-to-sponsor deals.
Private Equity’s Golden Era Is Fading
Low interest rates and rising acquisition multiples fueled private equity’s boom during the 2010s. Bain & Company estimates that expanding multiples powered more than 50% of buyout returns during the period. Global buyout assets under management climbed from $1.6 trillion in 2015 to $3.9 trillion in 2021.
But Kha says that firms have increasingly exhausted traditional turnaround opportunities, leaving many to acquire companies from other sponsors or take public businesses private.
“PE has chewed through the ‘fixer uppers,'” she wrote.
About half of U.S. private equity exits by deal count in 2025 involved sales to another sponsor, according to PitchBook data cited in the commentary.
The industry’s returns have also struggled to keep pace with public markets. U.S. buyouts generated annualized returns of 14.5% over the past decade, underperforming the Russell 3000. U.S. venture capital returned 17.6%, according to figures cited by Kha.
Why Venture Capital Could Win
Kha took the opportunity to tout that venture capital (VC) is better positioned to benefit from the next technological wave. VC firms invest before business models become predictable, she explained.
“Tech buyout is a late-cycle asset class,” she wrote. Buyout firms typically benefit once technology companies have established business models lenders can underwrite. “When a new technology wave drops, all bets are off.”
In contrast, Kha argued that “venture thrives in uncertainty,” with investors accepting that some companies will fail in pursuit of outsized returns.
Andreessen Horowitz is one of the largest and most powerful VC firms in the world, with over $100 billion in assets under management.
Is PE Done?
Kha stopped short of declaring private equity finished, acknowledging that smaller buyouts outside highly leveraged software could still perform well. However, she warned that shifting allocations into private credit or secondaries may not eliminate exposure to struggling buyout companies.
She urges limited partners to scrutinize their 2021 and 2022 buyout vintages, assess how much interest loans are accruing through PIK arrangements and explore exit options.
“We believe we’re at the beginning of a massive technological wave and the white space to build and innovate is boundless,” Kha wrote.
In the first half of 2026, venture funds marked their technology holdings up 16%, while buyout funds marked theirs down 4%, according to MSCI data cited in the commentary.
The gap was also pronounced among top-performing managers. For 2007–2016 vintages, the top 5% of U.S. venture funds generated a 5.3-times distributed-to-paid-in capital ratio (DPI), compared with 3.5 times for the top 5% of buyout funds.
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