Software-focused financial sponsor Bridge Growth Partners sees a “phenomenal opportunity” over the next two to three years amid AI-driven disruption across the software sector, said cofounder and CEO Alok Singh.

With fewer buyers in the market and many private equity investors managing portfolio leverage issues, successful investing now requires deeper operational and strategic experience, Singh said.

Singh said he began planning for the current software dislocation years ago. In February 2022, he warned that technology valuations were lofty and not sustainable. Bridge Growth acted on that view. “We sold our portfolio,” he said. “We don’t want to pay those overly inflated prices. There’s a time to invest and a time to sell.”

The firm sold Salient CRGT to Welsh Carson Anderson & Stowe for a double digit valuation multiple in July 2021, according to a Mergermarket report at the time. Salient was also backed by Frontenac. Bridge Growth then exited Finalsite to Veritas Capital at the end of 2021. The New York-based sponsor continued monetizing investments during the following cycle. It sold Accedian Networks to Cisco at the end of 2023, and Syniti to Capgemini one year later.

At the end of 2025, Bridge Growth established a USD 790m single asset continuation vehicle for infrastructure technology company Solace. Apogem Capital, Golub Capital, HSBC and Schroders co-led the transaction. “We gave existing investors a chance to stay in or get additional liquidity. Now is a much better time from a valuation perspective,” he said.

Market dislocation creates talent opportunities

A benefit of the challenging environment is that corporate managers of PE-owned tech companies are more likely to look for new roles elsewhere. “Many limited partners and executives at PE-owned tech firms know their equity holdings are underwater,” he said. More limited partners want to have their GPs sell, as they understand that “realizations are much further away than what they signed up for.” What’s more, sponsors don’t want to keep putting fresh capital into aging positions dating back seven or eight years that are overleveraged, he added. Bridge hopes to benefit from executive migration by shoring up the management teams of its existing portfolio companies, he said.

Singh declined to comment on preferred platform sizes but said Bridge Growth remains focused on North America.

Sticking to ‘sticky’ segments

Significant segments of software are under transformation because of AI, including “less sticky” segments such as customer experience and customer relationship management, which are generally not system of record businesses, according to Singh.

By contrast, infrastructure and cybersecurity are not as challenged by AI. “AI is just another tool to improve their offerings for customers,” he said.  Infrastructure technology, often referred to as middleware, was the focus of the Solace continuation vehicle, which was announced on 5 May. Singh said the fund is one of the largest single asset infrastructure technology CVs raised in the last 12 months. The transaction attracted an investment from Bridge Growth Fund III, which had raised USD 101.5m, according to an SEC filing dated 22 May.

Bridge Growth recently hired former IBM and SAP executives to support its middleware investment strategy, Singh said.  “We are a corporate firm. We have a lot of corporate executives in the business,” he said. That approach also aids recruitment and portfolio development. “We’re building businesses strategics want to buy…If anyone knows the value of these investments, it’s the strategic buyers and they will pay good prices for assets that are important to them.”

Singh is a veteran of New Mountain Capital, where he was a managing director from 2002 to 2013. Bridge Growth Co-founder and Chairman Joe Tucci led EMC as chairman and CEO until its sale to Dell in 2016 for USD 67bn, and also served as chairman of VMWare and Wang Labs.

Beyond middleware software, Bridge also likes horizontal software in “sticky” segments such as supply chain, engineering and govtech applications. Technology for education and infrastructure for sports technology are also attractive, he said. In K-12 education, “tech can have a huge impact in how children learn,” he said. As for sports, he said there is so much money going into sports teams, there will be a lot of demand for administrative software. “Change is always a good thing. It gives you opportunities.”