Exits are dead and holds are stretching to a decade.

THE CARRY

1. Cross-Podcast Themes

Heavy industrials are beating software at the AI game

Brookfield is squeezing $300 million in recurring EBITDA out of physical assets rather than chasing tech multiples. On Dry Powder, Anuj Ranjan pointed out that the middle market is full of century-old companies lacking basic digital infrastructure. His team skips standard ERP migrations and goes straight to deploying machine learning for predictive maintenance and dynamic pricing on the factory floor. “You would be shocked how many times we buy a business that is a billion dollars of revenue, two hundred and fifty million dollars of EBITDA, and they're barely using Excel properly,”▶ 0:35 Ranjan said.

The advisory data backs up this rotation away from pure-play tech. On Karma School of Business, Sean Mooney tracked a 175% surge in third-party AI scoping projects last quarter, and industrial services accounted for the highest volume of that demand. Sponsors are realizing they do not need to buy software companies to get software margins. Industrial portfolio companies are skipping decade-long enterprise software migrations for point solutions that automate technician routing and inventory. Watch full episode

Exits are stalled out and holds are stretching to a decade

Sponsors hoping a reopening public market will clear their balance sheets are staring at the wrong math. On Private Equity Spotlight, Erik Hirsch noted that the vast majority of private equity inventory sits below the $1 billion enterprise value threshold required for a modern listing. “The notion that the IPO market is gonna be the saving grace for the private markets is simply untrue,”▶ 1:32 Hirsch said.

When assets get trapped in a portfolio for six to ten years, the original operating plan fractures. On Karma School of Business, Sean Mooney noted that private equity holds are stretching toward ten-year limits because sponsors lack the six months of clear forward visibility required to launch exit processes. This delay has triggered a sharp drop in traditional executive search as sponsors scramble to rent interim C-suite leaders for late-stage cleanups. “The other thing that's giving us a lot of insight into why their hold periods are perhaps being extended is we're seeing a lot of demand for interim executives across private equity,”▶ 1:52 Mooney observed.

Software is shifting from employee tools to autonomous labor

Enterprise software is moving past selling seats to human workers and straight into competing for corporate labor budgets. On How I Invest, David Breach argued that agentic software unlocks an entirely new multi-trillion-dollar professional services market for incumbent platforms. “We're now entering a phase where I'll refer to it as software as the worker,”▶ Play Breach noted.

That shift is already compressing the hiring funnel inside private equity firms. On Capital Allocators, Ben Harrison reported that massive alternative asset managers are trimming their incoming junior analyst classes as AI absorbs basic modeling work. "Knowing that it took me days and weeks to build models and decks, being able to do that now in hours or minutes, you still gotta digest it and iterate it, it's not perfect," Harrison said. Listen to the full episode

2. Best Of the Week

• Dry Powder: Anuj Ranjan argues that enterprise AI deployment stalls when left to portfolio IT departments; adoption requires direct executive authority and centralized talent from the sponsor. Read more
• How I Invest: Tim McCusker notes that LPs who aggressively rebalance into equities during deep drawdowns succeed through board alignment and air cover rather than superior analytical edge. Read more
• The Infrastructure Investor Podcast: Olivia Wassenaar warns that mandated subsector quotas at fund inception force deal teams to chase sub-par assets just to satisfy an arbitrary spreadsheet. Read more
• Private Equity Funcast: Jim Milbery considers it fireable malpractice for a CTO to retrofit open-weight AI models only after their frontier API token costs destroy gross margins. “The fact that they now say, 'Hey, we got to move this to open weight' means, yeah, you should have been fired as the CTO, the product guy.”▶ 39:52 Read more
• M&A Science: Meg Cavanaugh keeps M&A data room reviews in-house, observing that external law firms optimize primarily for closing rather than long-term integration. Read more
• Capital Allocators: Tracy Britt Cool built Kanbrick around a 15-year horizon because the traditional private equity auction playbook disrupts operations and forces a rewritten strategy onto a company every 36 months. Read more
• Private Equity Spotlight: Erik Hirsch debunks the myth of private markets mean reversion, pointing out that dispersion between top and bottom buyout sponsors remains just as wide today as it was two decades ago. Read more
• Karma School of Business: Sean Mooney points to Q3 data showing that value creation consumed 84 percent of private equity project scoping, leaving only 16 percent for due diligence. Read more

3. Most Quotable

"Venture capital is not an asset class. I think it's actually two asset classes. And that breaks at seed and the way you approach seed and early stage is just totally different, and then growth and later stage."

Erik Syvertsen on How I Invest · October 2026. The AngelList executive cuts through the myth that early-stage check writing and late-stage capital deployment require the same operational playbook.

"The secondary industry in and of itself doesn't create ultimate liquidity at the asset level. It simply allows pieces to be moved from one investor to another."

Erik Hirsch on Private Equity Spotlight · October 2026. A blunt reminder that continuation vehicles are a balance-sheet tool for sponsors, not an actual realization of enterprise value.

"Everyone gets paid on an annual comp cycle and that is just way too short of a time frame to evaluate investment performance."

Tim McCusker on How I Invest · October 2026. The NEPC president explains why institutions managing thirty-year liabilities still fail to make contrarian bets.

Bottom Line: Extending your hold period from three years to ten means you are no longer flipping paper, you are operating a real business.