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| The Daily Pitch |
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| Your edge on global private capital markets |
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| Public PE giants are saying goodbye to software, hello to AI |
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By Madeline Shi, Senior Private Equity Reporter
In Q1 earnings calls, publicly traded PE firms pushed back on headlines about the software selloff and defended their existing holdings.
Management teams published AI risk frameworks, commissioned third-party assessments on the AI vulnerability of their tech portfolios and provided supplementary disclosure slides, all in the name of drawing a "hard line between headline panic and portfolio reality," according to our latest US Public PE and GP Deal Roundup.
But where they directed their capital in the first three months of the year revealed a more nuanced stance.
The largest listed PE players have been quietly writing down or exiting their investments in the software sector and pivoting toward the physical infrastructure that underpins AI, energy and other asset-heavy sectors.
The moves point to a consistent shift across the industry's largest firms. They are building their next cycle around the physical layer beneath AI, or defending themselves with investments insulated from its disruption. |
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• In an effort to control both data centers and their power, DigitalBridge agreed yesterday to buy ArcLight, a PE firm focused on energy investments. Our recent research shows highly specialized managers are winning big, accounting for 74% of all fundraising in 2025. Revisit it here
• Valuation uncertainty drove more growth-stage companies to seek private credit financing in Q1, according to Hercules Capital. Find out more
• PE funding for the European aerospace and defense industry hit a record €5.9 billion ($6.9 billion) in Q1, as surging defense budgets drive a procurement wave. Meet the top investors |
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| TD Bank explores tie-up with private credit firms |
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| (Andrew Francis Wallace/Getty Images) |
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By Madeline Shi, Senior Private Equity Reporter
In recent years, banks and private credit funds have been forging closer ties, angling for a larger share of the corporate and sponsor-backed lending market.
Now TD Bank—the 10th-largest commercial bank in the US by assets—is looking to join them.
TD is actively seeking to forge partnerships similar to those adopted by its peers, which aim to marry its corporate client network and origination pipeline with the financing capabilities of a direct lender, PitchBook learned. No firm plans have been agreed upon.
Once competitors, banks and direct lenders are now increasingly pooling their relationships, capital and credit expertise. Partnerships between the two sets of lenders have proliferated, taking a variety of forms and drawing in lenders of different sizes.
Banks are less incentivized to hold certain types of debt on their balance sheets due to higher capital requirements, leaving a gap for private credit to fill with more flexible capital.
The tie-ups allow banks to reap fees from sourcing and structuring deals while retaining relationships with clients. For private credit firms, these ventures offer access to a broader base of borrowers.
Commercial banking giant JPMorgan has forged several partnerships with private credit firms—including Cliffwater, Future Standard and Shenkman Capital Management—under which the bank originates loans and co-invests alongside the lenders.
Other high-profile collaborations include Citigroup’s $25 billion direct lending partnership with Apollo Global Management and Wells Fargo’s $5 billion arrangement with Centerbridge Partners.
In the middle tier of the market, PNC and the TCW Group in May 2024 announced a partnership to make loans to middle-market companies, providing them with senior secured cash flow and asset-based loans.
Webster Bank and Marathon Asset Management, two months later, unveiled a comparable tie-up targeting sponsor-backed mid-market companies. |
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Smart reads that caught our eye.
• This nonprofit struggled to get human volunteers, so it uses robots instead. Meet the robots helping put together medically-tailored meals in San Francisco's Tenderloin district. [Wired]
• Self-driving cars are giving visually impaired people a first-time experience: being on the road alone. [New York Times]
• How rising energy costs are leading to exposed legs in the workplace. For the first time, Tokyo government workers are allowed, and even encouraged, to wear shorts to the office. [Bloomberg] |
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| Since yesterday, the PitchBook Platform added: |
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686
Deals
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2471
People
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1216
Companies
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40
Funds
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