Warburg Pincus CEO Jeffrey Perlman, whose private equity firm backs more than 200 portfolio companies, says investors see public markets as one concentrated, correlated bet. He argues that pushes capital toward private assets.

The pitch comes from a firm that calls the initial public offering (IPO) market structurally broken for buyout exits and has sold most recent holdings to corporate buyers.

Why Does the Warburg Pincus CEO Say Investors Want Private Assets?

Perlman spoke to CNBC after a bell-ringing ceremony at the New York Stock Exchange marking Warburg’s 60th anniversary.

Investors he meets worldwide, he said, increasingly describe public markets with one phrase.

“one large single correlated bet.”

Jeffrey Perlman, CEO of Warburg Pincus, via CNBC

Warburg’s clients, he said, want AI applied across traditional companies, not a bet on the next large language model (LLM). The firm’s largest single investment is AI implementation.

Perlman put the share of the S&P 500 held by 10 companies at about half. Yet JPMorgan data show the top 10 held about 38% in July 2026.

Citi strategist Scott Chronert, however, expects AI-driven earnings to support Citi’s 8,100 target for the S&P 500 by year-end.

Can Private Markets Offer Diversification Without Easy Exits?

Perlman said public companies are down 60% in a decade. In contrast, the number of US public firms has nearly halved since 1996, according to Harvard Law School’s corporate governance forum.

Markets expect IPO discounts of 30% to 40%, he said, and selling down stakes then takes three to four years. Most Warburg sales over the past four to five years went to strategics, meaning corporate buyers.

CNBC’s Leslie Picker asked about private markets’ software exposure. Still, Perlman said software belongs in investor portfolios, though probably not at 30% to 40%. He described Warburg’s approach as “diversification by design.”

Meanwhile, he said rates are structurally higher but not high by historical standards. He does not think higher debt costs make buyouts harder.

That leaves a structural question for investors leaving concentrated public trades. Can private markets absorb the capital if exits keep leaning on corporate buyers?

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