Franklin Templeton chief executive Jenny Johnson is telling investors that new AI models could kneecap the enterprise software sector’s long-term prospects.
Johnson told the Financial Times: “It is a legitimate concern [when] you look at the capabilities with coding with, say, a Claude and what Anthropic’s done… and you really have to question if enterprise software companies can thrive,” she said.
Johnson said she spent a weekend in February “trying to figure out” how to code with Anthropic’s latest Opus 4.6 model of Claude. She said software businesses still made “tons of money” and were likely “oversold in the short run”, but there was a “threat to their long-term business model”.
Johnson’s warning lands amid a sell-off across the private investment industry, with shares of buyout shops and private credit lenders sliding as they have loaded up on software. The public market wobble is cranking up the pressure on buyout firms that wanted to exit ageing portfolio companies this year.
Some are now weighing up delays to asset sales that were meant to unlock long-awaited performance fees. Private credit lenders that funded those deals are in the frame, with executives warning some borrowers could struggle to refinance in three or four years when debts mature.
Johnson pointed to continuation vehicles, where a firm sells a business it owns to another fund it manages, as a sign it is getting harder to return cash to investors.
“It will be interesting to see whether alternative asset managers can maintain the same growth that they’ve had historically,” Johnson said.
“You are not hearing the institutional clients, the sovereign wealth funds and the pension funds saying: ‘Oh, I’m going to dramatically increase my allocation of private markets,’” she added.
Franklin Templeton has moved into private markets as investors shift from legacy mutual funds to low-fee passive funds. Over the past seven years, it has bought Benefit Street Partners, Alcentra, and Apera in credit, Lexington Partners in secondaries, and the real estate group Clarion.
