A.J. Rohde: Living in the (Software) Limelight [Joys of Compounding, Ep. 38]

Our teacher today is A.J. Rohde, senior partner at Thoma Bravo, one of the largest software-focused private equity funds in the world. A.J. shares stories and lessons learned from his time investing in private equity - including why Thoma Bravo hires tennis players like him, and how playing in a band when he was younger helps make deals happen today. He talks through the fundamental disconnect between software company fundamentals and valuations in the market, and why he expects investors to reallocate toward SaaS when the AI trade cools off. Plus, why Thoma Bravo hires tennis players. Please enjoy class with A.J. Rohde. For the full show notes, transcript, and links to mentioned content, check out the episode page here. ----- Become a Colossus member to get our quarterly print magazine and private audio experience, including exclusive profiles and early access to select episodes. Subscribe at ⁠colossus.com/subscribe⁠. ----- This episode is brought to you by Portrait Analytics - your centralized resource for AI-powered idea generation, thesis monitoring, and personalized report building. Built by buy-side investors, for investment professionals. We work in the background, helping surface stock ideas and thesis signposts to help you monetize every insight. In short, we help you understand the story behind the stock chart, and get to "go, or no-go" 10x faster than before. Sign-up for a free trial today at https://www.portraitresearch.com ----- This episode is brought to you by Eight Sleep — the Pod is a smart mattress cover designed to improve sleep by automatically cooling or heating your bed throughout the night. Built on the science that your body needs to cool down to reach deep sleep, it tracks your sleep and adjusts in real time to help you get better rest, recovery, and overall sleep quality. No wearables required. Use the code JOYS at  for up to $350 off the Pod 5. ----- Joys of Compounding is a property of Pine Grove Studios in collaboration with Colossus, LLC. For more episodes of Joys of Compounding, visit⁠ colossus.com/episodes⁠.  Editing and post-production work for this episode was provided by The Podcast Consultant (⁠https://thepodcastconsultant.com⁠). Follow us on Twitter: ⁠@Buhrman_Rick⁠  | ⁠@PaulBuser⁠ | ⁠@colossusmag Timestamps (00:00:00) Welcome to Joys of Compounding (00:03:24) Why Thoma Bravo Recruits Tennis Players (00:13:45) A Detroit Kid Finding His Sport (00:18:01) Drumming as an Outlet (00:26:08) The Spirit of Philadelphia (00:31:26) Complimenting a Blind Spot (00:35:32) Buying Licenses for Air (00:45:04) Constants Across Five Decades of Software (00:51:00) Underwriting a Ten-Year Hold (00:59:24) The Death of Playbooks (01:05:34) Data That Survives Hype Cycles (01:13:50) Proof of Resilience (01:22:01) How Range Makes a Better Investor