Episode summary
AI Will Create a New Generation of Investment Firms
How I Invest With David Weisburd
· · Hosts: David Weisburd · Guests: Thomas Scriven
Summary
Thomas Scriven argues that AI will reshape investment firms less as a software upgrade than as an organizational redesign. He thinks the firms that win will be learning organizations, and that AI-native managers may have an edge where they can embed engineers directly into portfolio companies, change workflows, and create new forms of operational value creation rather than just cutting costs. He also says this advantage is likely to matter most in the middle market, where a differentiated playbook can still stand out.
He is bullish on concentrated portfolios and on frameworks over rigid rules. In his view, concentration forces discipline, reduces marginal deals, and lets allocators keep conviction in their best managers and best positions. He says the best investing decisions come from clear underwriting, explicit risk discussion, and enough thinking time to challenge assumptions rather than just defend past choices.
A large part of the conversation focuses on incentives and relationship quality between LPs and GPs. Thomas says legal documents matter less than alignment, GP commitment, and repeated interaction, and he spends heavily on references to understand how people behave under stress. He also argues that AI will likely create as well as destroy jobs, and that better productivity can help firms grow in a world of declining labor supply.
Key takeaways
- Thomas Scriven thinks AI-native private equity firms can win by embedding engineers into portfolio companies and changing workflows, not just layering on productivity tools.
- He says concentrated portfolios outperform because they force selectivity and reduce the chance that marginal deals slip in.
- Thomas argues that LPs should understand GP and LP incentives, including compensation and GP commitment, because legal documents only solve a small part of the partnership problem.
- He believes AI will create many jobs through business growth and productivity gains, even if some roles are displaced.
- Thomas says secondaries are now a powerful tool for building a more mature private portfolio faster and with less J-curve risk.
Notable quotes
“There's going to be a lot of organizational reworking that's needed. And I think investment firms that are learning organizations will do a lot better”
“We think their playbook looks very very different”
“I don't want any rules. I just want a very disciplined approach to what we underwrite”
“You should ask me this question in August. I'm having a conversation with every one of our active managers to actually go through what are they doing in AI”
“If you think about the 100redyear challenge for world, we're facing a declining population”
How the episode opens
So, how will AI affect investment firms?
There's going to be a lot of organizational reworking that's needed. And I think investment firms that are learning organizations will do a lot better. As I think about AI and the changes to investment strategies, we should back the operational value ad that private equity firms need to contribute.
A lot looks quite different. And we just backed a new firm and two very smart uh investment partners but a lot younger than we usually would back but they're teaming up with a team out of Palunteer three super experienced engineers that have between them over 30 years of sort of forward deployed engineering capabilities. We think their playbook looks very very different.
Do you think the next generation of investment firms will be new firms that are AI native or old firms that are integrating AI?
I think there's both. A lot of the old firms have some very very smart people and I think they're all very cognizant of the fact that the world is changing and the way you drive value in the future is going to look differently. Some are maybe adopting AI more reluctantly and others are really jumping in.
For me, the question is more is there a shift in where the most attractive opportunities are, right? You might do everything. You might be a larger buyout fund and you might have the best operational value ad playbook, but this might be table stakes because everyone else has it and the gains you get through productivity enhancement through AI, you're giving back either in price or in competition.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- ai investment firms
- private equity deals
- lp gp incentives
- concentrated portfolios
- vc fundraising frameworks
Companies and tickers mentioned
- AlphaSense
Watch the episode
Watch “AI Will Create a New Generation of Investment Firms” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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How I Invest With David Weisburd, this episode and its artwork belong to David Weisburd. Octagon is not affiliated with the show; this page is an independent summary.
