How I Invest with David Weisburd Sep 25, 2026 1h 1m · 37m saved
With Warren Gibbon, CIO of BFA Family Offices, a multi-family office for entrepreneurs and the private-market investors who back them
A typical middle-market buyout now costs about 12 times EBITDA, against eight a few years ago, Warren Gibbon said.
Most investors still expect private markets to beat public ones, based on 20 to 40 years of data. Gibbon said that data was helped by falling interest rates, and that public technology companies are now growing earnings faster than the companies private equity buys.
"One of the beliefs I have in investing is large sums of capital coming in is antithetical to go-forward returns — it gets much harder to generate the returns you're hoping for."
Warren Gibbon, CIO of BFA Family Offices, on How I Invest with David Weisburd. BFA was founded in 2018 to serve people who built wealth in private markets and the entrepreneurs they back, and many of its client families come from general partners themselves. Gibbon, a CFA charterholder and former equity portfolio manager, joined the firm in early 2020, when it was called Boston Family Advisors.
The full interview is covered here so you can skip it. 61 minutes of audio, 24 minutes of reading.
Here are the 18 arguments that matter.
Key Takeaways
Private-market returns of the past 20 years were helped by falling rates, and he told investors to re-underwrite the case from first principles
Middle-market buyouts went from 8x to 12x EBITDA in a few years
Public tech companies are in an earnings boom that buyout companies are not sharing
S&P 500 second-quarter earnings rose 29%, and tech earnings 50%
Hyperscaler spending is about 70% of US corporate capex, and he would be careful underwriting chip and memory makers
Private equity now needs operators inside the companies, not board members making recommendations
Only the top 8–10% of venture outcomes drive returns, and the rest net to about 1x
He thinks over 60% of equity trading is now algorithmic, and index funds buy more of a stock as it rises
He does not invest with the big pod shops, because they bet on the next quarter
Liquidity for the next shock is his first concern, and he still likes secondaries
With $100M of new cash he would not invest it all on day one
He would favor opportunistic credit and strategies that profit from dislocations
A good investment idea needs no more than three sentences
1. Re-Underwrite Privates
The host said most investors still believe private markets will outperform public ones. Gibbon said the data behind that belief covers 20 to 40 years in which falling interest rates lifted returns, and many studies compare against 2000 to 2020, which started with an overvalued stock market.
Investors should test the thesis again
"I think investors today really need to take a hard look at that thesis." — Warren Gibbon
His first recommendation, and how BFA is approaching it, is to go back to first principles: which businesses will be owned, and why they will rise in value.
"Because if you're looking at the past and saying that's what I hope is going to happen, I think that's going to be a disappointing strategy." — Warren Gibbon
Too much capital has come in
He said the last five years brought many new firms and a very large amount of new money into private markets.
"One of the beliefs I have in investing is large sums of capital coming in is antithetical to go-forward returns — it gets much harder to generate the returns you're hoping for." — Warren Gibbon
He said the endowment model popularized by David Swensen worked because its users moved first. Private markets were inefficient, few buyers knew how to add value, and falling rates let owners add more debt to companies.
Buyout multiples went from 8x to 12x EBITDA
"And so now we've got a lot of capital in place, more firms chasing the same amount of deals, and you can see that most clearly in just multiples — we're looking at, let's say, 12 times EBITDA for a typical middle market buyout; a few years ago, that was eight." — Warren Gibbon
He said lower corporate tax rates justify some of that increase, but earning the same returns now takes aggressive assumptions.
"That's what we do challenge GPs on today — they're gonna be forced to really focus on the operational side, which a lot of them say they do, but I think we need to see more of that." — Warren Gibbon
